Extended Car Warranty – Frequently Asked Questions

In many cases, yes – what people casually call an “extended warranty” is legally a vehicle service contract. It’s a private agreement to pay for certain repairs after factory coverage ends.

No plan covers everything. Contracts list covered systems and components, and also contain exclusions (for example: wear-and-tear items, cosmetic issues, or damage from neglect). Reading the full coverage section is essential.

Many third-party contracts allow any licensed repair facility, but some require pre-approval before work starts. OEM plans typically favor dealership networks. The contract should state what is allowed.

Most extended warranties focus on unexpected component failures, not routine maintenance. Some providers sell separate maintenance plans or hybrid products that include both. Make sure you know which type you are being offered.

Some plans are transferable to a new owner for a small fee, which can help resale value. Others are not transferable. Many contracts also include cancellation and pro-rated refund clauses. Those details are normally explained near the end of the document.