Extended warranties are typically purchased at the same time you finalize the purchase of your new vehicle. This type of warranty protects the consumer against the potentially crippling cost of repairs on your vehicle in the event of mechanical issues or breakdown. These warranties are particularly valuable but it is important to know what you are purchasing and what it covers.

If you’re not familiar with the difference between the two terms, a manufacturer’s warranty is one that you are given automatically when you purchase the vehicle. It is an agreement between you and the car manufacturer that covers major issues and repairs to the vehicle over a certain period of time after purchase. An extended warranty on the other hand is an agreement between you and the dealership that covers similar types of repairs and usually cover a longer period than the manufacturer's warranty will. There are many consumers who make the decision not to purchase an extended warranty with their vehicle because it is already covered by a manufacturer’s warranty. You do have the option to wait until the manufacturer’s warranty expires before purchasing more coverage, however you will almost always get a better deal if you purchase it while still under that original warranty. This is because the dealership feels that your vehicle is less of a risk to them if it’s still under factory warranty.

Because an extended warranty is an individual agreement between you and the dealership, warranty coverage will vary from vehicle to vehicle. There are however a couple of different coverage types that you may be offered depending on the vehicle you are purchasing.

            Powertrain Protection: This type of warranty covers the most powerful and most expensive components on your car (motor, transmission, etc.) in the event of damage or failure. powertrain coverage is one of the most popular extended warranty types offered by dealerships and can be a valuable asset.

            Bumper to Bumper Coverage: Though they are usually slightly more expensive, bumper to bumper coverage is the most comprehensive warranty package available. It covers the repair of almost every element of your vehicle with the exception of certain regular maintenance work and regular wear. Person’s who are buying vehicles that contain parts that are particularly expensive or hard to find are encouraged to purchase this type of coverage.
           
            Wrap Coverage: If you’re car comes with an powertrain warranty, it may be wise to consider purchasing a wrap coverage warranty for the vehicle as well. These two sets of coverage put together give you a pretty comprehensible coverage, very close to bumper to bumper and often at a lower rate. Wrap coverage basically covers everything that your powertrain excludes, which are the smaller parts and components on your vehicle.