When purchasing a car, the buyer must be encouraged to buy an auto warranty contract to help protect against unexpected, costly repairs. While it may sound like a good idea, it is advisable not to buy until the terms of the contract and who is responsible for providing the coverage, are completely understood. A car is likely to have a number of mechanical breakdowns. Purchasing an auto warranty protects the owner from the high cost of mechanical repairs.

Auto warranties are provided as a value added service by car dealers or by external agencies. Since 1979 these companies have become specialists in auto warranties. Warranties are available on any year, make, or model vehicle with any mileage. Coverage varies from 3 months to 14 years and from 3000 miles to 170,000 miles. The warranty industry has broken warranties down into three major categories. Various plans such as component, power train and bumper-to-bumper plans are offered. No matter what option one chooses, each of the warranties provides all the benefits the owner needs, at an affordable price. For just a few pennies a day, any vehicle can be protected from unexpected mechanical breakdowns. Auto warranties extend their services across the town or country when an unforeseen repair is required.

Very few auto warranties cover all repairs. Common repairs for parts like brakes and clutches are not included in warranties. If an item isn't listed, assume it's not covered. The owner is liable to pay for the entire overhaul of an engine, if a part not covered by the warranty is found to be defective. Car warranties play an important role in the resale of used cars. A major feature that is looked into while purchasing a used car is the warranty it offers.