An auto warranty is a promise to fix certain defects or malfunctions during a specific timeframe after you buy a vehicle. A manufacturer’s warranty is included in the price of a new vehicle, and often covers your vehicle for a certain number of months or miles, whichever comes first. A used vehicle might come with some type of warranty coverage, too. Auto service contracts — sometimes called “extended warranties” — are optional contracts sold by vehicle manufacturers, dealers, or independent companies. The contract seller agrees to perform (or pay for) certain repairs or services outlined in the contract. It’s common for a contract to cover your vehicle for a certain number of months or miles. Contract prices and coverage vary widely. Some auto service contracts will extend the length or coverage of the warranty that came with your vehicle, and others will cover some maintenance tasks like scheduled oil changes. They typically don’t cover damage that may occur in an accident or normal wear and tear to the vehicle. An auto service contract or extended warranty is not a warranty as defined by federal law, because you buy it separately; it’s not included when you buy a car.
