The answer depends on what type of extended warranty you buy. As always you should read the warranty information and be sure you understand it fully before you buy.

                                                                           
1. What is an extended auto warranty?

An extended warranty is an agreement between the car owner and warranty company, obligating the warranty company to pay for repairs covered by the contract for a specific period of time.

With an extended auto warranty you are protecting yourself from the unexpected cost of mechanical failure.

2. What exactly does an extended warranty cover?

Know what's covered, and what's not covered, by the extended auto warranty you're considering. Does the contract cover breakdown as well as wear and tear? Under a "breakdown" warranty, coverage is extended only to parts that break. Such an extended auto warranty can prove less inclusive than is desirable, since not all parts fail due to breakage. Some need to be replaced because they've worn down over a period of time; a "wear-and-tear" warranty extends coverage to worn-down parts in need of replacement.

Additionally, some extended auto warranties don't cover TSB s. A Technical Service Bulletin (TSB) or Factory Service Bulletin is a notification by the manufacturer that a condition may exist on your vehicle.

3. Why do I need an extended auto warranty?

Since common mechanical repairs can cost into the thousands and these costs are rising rapidly; protecting your automotive investment should not be taken lightly.

Whether you own a new or older make/model, an extended auto warranty will provide you with peace-of-mind protection regarding costly mechanical repairs that can happen at any time during the life of your vehicle.

Buying an extended auto warranty today will allow you to avoid paying higher rates later due to price increases and required surcharges due to the multitude of issues that develop as the vehicles flaws become public knowledge. You'll be able to immediately take advantage of your plan's benefits: towing, lost key/lockout, and car rental discounts.

4. Why should I purchase an extended auto warranty now if my vehicle is still covered by the manufacturer?

As your vehicle accrues age and miles, the price for an extended auto warranty will rise as do the repair costs that you would experience for an older, out-of-warranty vehicle. You are only buying total mileage coverage, not addition of mileage to your current total.

5. What about the deductible?

Fully investigate a policy's deductible before signing on the dotted line. Consider not only its amount, but also whether it's per visit or per repair. With a per-visit deductible, each visit to the shop will run you a fixed amount, regardless of how many parts are repaired; a per-repair deductible applies to each serviced part. What sounds like a minor difference may, under certain circumstances, have a major impact on your wallet.

6. What type of auto warranty can I buy?

Powertrain Warranty: Covers the engine, transmission, and other parts of the Drivetrain only, which is defined as the 29 parts of the vehicle through which oil flows. These are the parts least likely to fail.

The average vehicle contains thousands of parts. As it does not cover the majority of the components of a vehicle, the Powertrain Warranty is truly not an extended warranty.

Bumper-to-Bumper Warranty: Covers nearly all of the mechanical systems of the vehicle, from front bumper to back bumper; except for those on the "exclusion list", listing the parts that are NOT covered by the extended auto warranty. It is much easier for a consumer to see a short list of items that are not covered and know that everything else is.

Named Component Warranty: Covers the major mechanical systems of the vehicle from mechanical breakdown and mechanical failure. If the part is not listed, it's not covered by the contract.

7. If the manufacturer's warranty for my vehicle has expired, can I still obtain extended auto warranty coverage?

Many consumers do not realize that even after the manufacturer's warranty has expired, their vehicle is still eligible for extended coverage. You can generally receive coverage on vehicles that have less than 100,000 miles on the odometer. A vehicle out of its original warranty is more apt to have mechanical failure compared to a newer vehicle. For this reason, vehicle inspections are required. A good example would be life insurance. As you age, can you get a comprehensive life insurance policy without a physical and increased cost?

8. How does the claims process work?

The top warranty companies work like this: If your vehicle breaks down or is in need of a repair, take it or have it towed to any licensed repair facility and present your service agreement to the Service Department. After they diagnose the problem with the vehicle, they will call the claims administrator toll-free and receive repair authorization for all your covered repairs less a deductible where applicable.

All claims are paid directly to the repair facility of your choice with a corporate credit card; therefore, you do not have to pay for your repair and wait to get reimbursed.

9. Where can I get an instant quote for an extended auto warranty for my vehicle?

When looking at extended warranty companies, financial stability and claims paying experience should be of utmost importance.

There are a number of extended warranty companies out there, I recommend Warranty Direct.

They are a 25 year old company that has the experience of nearly 2 million contracts sold, assets in excess of $165 million, has paid over $500 million in claims and they are reinsured by an 'A' rated A.M. Best insurance company with over $2 billion in assets.

Hope you find this guide helpful.