Warranty Basics

(California Residents Click Here)

What's a Vehicle Service Contract or Extended Vehicle Warranty?

Most new vehicles purchased these days come with a warranty - this is an agreement between the manufacturer and the customer that should anything break, malfunction, or otherwise go wrong with the vehicle within a certain period of time (typically 3 years or 36,000 miles, whichever comes first), then the manufacturer will repair or replace the component at no cost to the customer.

Vehicle service agreements (also known as extended warranty plans) are designed to offer similar peace of mind by literally extending the length of time a customer can expect to receive such coverage.


Vehicle service contracts are not all the same. How the contracts are written will determine if your claims are paid!

Buying an Extended Vehicle Warranty - What Everyone Should Know

Just because a company claims to offer extended auto warranty coverage doesn't mean that you can expect ultimate exclusionary protection. Some plans available in the market cover only catastrophic failures, or only certain systems. By being informed about extended auto warranties and reputable warranty companies, you'll be better prepared to make the right decision for your needs. A few things you should always try to find out about vehicle service contracts include:

Who takes care of the claims?

A lot of online businesses simply sell some other companies' vehicle service contracts (extended car warranty plans). Those companies that sell and administer their own plans (like Warranty Direct) are better equipped to provide reliable service and support.

Is it an exclusionary plan?

Manufacturer warranties are called exclusionary plans because it takes less time to mention what's not covered than it does to go through all the thousands of things that are. This is a sign that you're receiving the maximum amount of coverage available. Plans that list only those items which are covered may not be full warranty plans; they may be supplement or partial plans only. Many of Warranty Direct's extended auto warranty plans are exclusionary plans.

Ask about parts, labor, and other expenses?

Never assume that a vehicle service agreement (extended warranty) includes parts and labor costs. You could end up paying for the time the mechanics spend repairing your vehicle. Considering that rates can be between $70 and $100 or more per hour, these costs can quickly add up. Additionally, think about what other expenses you may incur if your vehicle is in the shop for a while. Car rental fees are another expense that can be costly unless covered by your warranty.

Know Who You're Working With

When you purchase an extended vehicle warranty plan, you're making a contract between you and an administrator. Just like any contract, you need to feel certain that the administrator is going to hold up their end of the deal. After all, you're going to hold up your end by paying for the vehicle service contract. Look at the financial strength of the company. Will they be able to pay your claim when you make it? What's their track record when it comes to customer service? Are they properly licensed and registered to do business in your state? A variety of resources can be helpful in this respect, including the Better Business Bureau,, and Dun & Bradstreet, to name a few. You can also call a Warranty Direct representative to discuss state specifics.

How will the company handle claims?

Let's be honest, a vehicle service contract that can only be used in certain places, or that makes you pay for the repair and then file for reimbursement doesn't offer peace of mind; it makes things more difficult. Make sure you know what you'll need to do in order to reap the benefits of your extended auto warranty plan. Nationwide coverage, the ability to choose the repair facility of your choice, and direct payment to repair facilities are all options that make Warranty Direct's plans truly valuable.

Dollars and Sense

Like so many other things in life, vehicle service agreements (extended vehicle warranties) fall into that category of "you get what you pay for" - so shop smart. Don't let sticker price be your deciding factor. Look at what you actually get for the money and factor in the possible out-of-pocket costs that are likely to come along with a "bargain basement" plan.

Here When You Need Us

More than 30 years in business and over $1 billion in paid claims means you can always count on us to be there.