Every new car that you buy has a factory warranty, which is in place to essentially ensure that in case of breakdowns or malfunctions, the cost will be covered by the dealer or the manufacturer.

However, factory warranties have an expiration date. As soon as your factory warranty ends, all costs of repairs have to be covered by you. However, if you want to retain the coverage of a factory warranty after its term, you can buy an extended car warranty.

An extended car warranty is different from an auto insurance policy, but can seem to play a similar role. In case of a mechanical or technical issue, the repairs are paid for on the condition that the issue is included in the warranty. Providers of this service offer a lot of extended car warranty benefits. Yet, knowing the right questions to ask is essential to getting these benefits. Here are some key answers you need before going for an extended warranty on your vehicle.

1. Do you really need an extended warranty?
Knowing if you need an extended warranty or not is just subject to your ability to manage finances with regards to the repairs and maintenance of your car in the future. It is also subject to the duration for which you will use the car. If you buy a new car and plan to sell it off before the manufacturer’s original warranty ends, then an extended warranty is not for you. But if you plan to keep the car for longer, then do look into getting an extended warranty. Knowing this can help understand whether an extended warranty will be a type of savings or an expense for you.

2. When can you buy an extended warranty?
While it may be a great idea, it is not necessary to buy an extended warranty exactly when you buy the car. A new car typically comes with its own comprehensive set of car warranty benefits. This policy along with many benefits usually runs for five years or more. Many car buyers do not realize that the benefits that come with an extended car warranty can be enjoyed even if they purchase it after the factory warranty expires. However, the conditions applicable will be different in this case.

3. What are the purchasing options?
You can either purchase an extended car warranty through the dealership or you can seek out a third party seller. In either case, you should ensure that the policy is backed by the manufacturer. To ensure that, you can contact your state’s insurance department or the office of the attorney general for some insights that may tell you about the credibility and reliability of a provider.

4. What does the extended warranty cover?
Different policies provide different types of coverage. Hence, you should always thoroughly read the terms and conditions involved. This will help you understand your extended car warranty benefits better. Moreover, you must know what is not covered. For example, some warranties can cover only parts that cost below a certain limit, while some provided complete coverage. Other extended policies provide additional services like car rental coverage and roadside assistance.