Most new cars will come with some form of limited warranty offered by either the auto dealer or the factory. These warranties usually last for five to seven years or 50,000 miles. Some factories will offer a ten-year/100,000-mile limited warranty. Once the warranty expires, you will be responsible for the cost of maintenance and repairs of the vehicle. Some people do not like the idea of having to pay hundreds of dollars on repairs and other maintenance costs. Those people will choose to purchase an extended warranty for their automobiles.

These warranties will generally last for another three to five years, depending on what you buy, and cover the cost of some body damage, engine problems, as well as other problems on the car due to normal use. For one flat fee, your car will be covered on repairs.

When buying an extended warranty, you should always compare plans. Many car dealerships offer plans that are comparable to other companies. Dealerships usually subcontract their extended warranty policies to other warranty companies and add on an extra fee. If you are considering a dealership plan, you should first compare it to other plans that you can get directly from a warranty company for potential costs and savings.

Reading over the warranty coverage is one of the things you should also do prior to purchasing. Many warranties will cover the replacement of parts that either break down or need to be replaced due to wear and tear. However, very few extended warranties will offer plans that cover absolutely everything on a vehicle. You should read the warranty contract first to find out exactly what is covered by the warranty. Doing the necessary research and comparison of different coverage is necessary to finding the right warranty to buy. You do not want to pay hundreds of dollars, and then find out that your warranty will not cover your necessary repairs.