Today, buying a used car is not always a straight-forward transaction. In many cases there are a number of additional services the buyer must consider at the time of purchase. One example of these so-called extras is the extended warranty.

Extended Warranties are not normally required by most car dealers. However, in most situations car buyers are enticed to purchase one to protect themselves against unforeseen expensive car repairs.

Generally, auto service contracts are pledges made by the agency, usually the car dealer, responsible to provide the necessary services or repairs that the buyer or the contract holder is entitled to receive.

The problem is some people consider extended warranties and auto service contracts to be the same thing. What they do not know is that auto service contracts are normally included in the price of the vehicle to be purchased while extended warranties can be purchased at any time even if the person did not buy a new car. Moreover, extended warranties are always an option and the buyer can choose whether to purchase one or not.

There are a number of factors that should be considered when considering an auto extended warranty:

1. Be aware of the terms and conditions covering the Extended Warranty. Every extended warranty has its own terms and conditions. It is important for every car buyer to know what the contract stipulates and know what is included and what is not included.
   
2. Know what services are covered and who will provide any required repairs The buyer should know what services are covered by the extended warranty and if repairs can be conducted by your local dealer or mechanic or if repairs must be done by companies approved by the warranty company.
   
3. Know the reputation of the company providing the extended warranty. It is extremely important to obtain as much information as possible on the company providing the extended warranty. Things like how long they have been in business and their reputation among their customers.