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Automobile Extended Warranty: What is an Auto Warranty and Do You Need One?

BY: Alex Perrone


Many of you have heard the term: automobile extended warranty. But do any of you know what it means? Some might call it “insurance for car repairs”. Others might define it as a protection plan from the manufacturer in case something goes wrong. And some might just now know what it is altogether. Like many terms in the automotive industry, an automobile extended warranty can have many (confusing) definitions. But in this article, we intend to express to you what an automobile extended warranty is, how it works, and whether or not you need it.

The first step to answer your automobile extended warranty questions is to first address what it is exactly. But you’re first going to need a little background information. We’ll clear these questions up below.

What is an Automobile Extended Warranty?

A manufacturer’s warranty is a warranty placed upon a new vehicle that promises to pay for repairs in the event of a fault produced during the manufacturing process. An automobile extended warranty is what drivers place upon their vehicles once the manufacturer’s warranty expires. An automobile extended warranty can also be placed on used cars.

However, according to the Vehicle Protection Association’s standards of conduct, you are not allowed to call this form of extended coverage a ‘warranty’ because it did not come from the manufacturer. Long story short, if you didn’t produce the vehicle, you can’t call your product a warranty. The most common terms for this protection is a vehicle service contract.

How Does a Car Warranty Work?

  • Choose a Repair Facility– Your car warranty company should allow you to pick any certified mechanic or repair shop that you would like.
  • Get Your Car Checked Out– Have the mechanic you choose run diagnostics to pinpoint the issue with your vehicle and have them relay all information to the warranty company.
  • Give the Mechanic Your Membership Card– Coverage holders are issued a membership card, which they use whenever the car is in need of repairs by giving it directly to the mechanic.
  • Pay the Deductible– Contracts may or may not have a deductible, this is standard (typically between $0-$100) and to be paid at the end of the repair when your vehicle is back in your possession.
  • Retrieve Your Vehicle– The extended car warranty will pay for covered repairs in total including: parts, labor, and any applicable taxes.

Extended coverage is very simple to use. After completing your waiting period and paying your premium, you are eligible to make a claim. While every process will differ from company to company, generally the process works in this way. Be sure to keep an eye out for credible auto warranty companies and avoid any company that makes you pay upfront for repairs. These companies will oftentimes make contract holders go through a painful reimbursement process that will most times be denied or too much of a hassle to be worth it.

Do I Need an Automobile Extended Warranty?

This is the most common question that is asked on this subject. And the truth is, everyone needs extended coverage. While many people have extended coverage it isn’t as well-known or as common as health insurance, car insurance, etc. But it doesn’t mean it isn’t as important.

The way you use health insurance to pay for medical bills if you’re ever sick, you can use extended coverage to pay your repair bills. But like health insurance, you hope you don’t have to ever use it but it sure does come in handy when you do. Over a 5-year period, think about how much an automobile extended warranty can save you.

Extended coverage is not just a smart choice; it is also a safe choice. There is no need for you to pay outrageous repair bills when someone else can. Take a minute to talk to one of our customer service representatives and you’ll see why extended coverage is so important. You’ll be surprised at just how affordable it can be.

We know that every customer is unique and we take careful time matching you with the right customer with the right contract. Call us today for your free quote.

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