Auto manufacturers typically provide warranties as part of the overall cost of a new vehicle. These warranties will cover certain car problems and last for a certain number of months or years and miles of driving.

In addition, auto dealerships often sell extended warranties.  Sometimes, these extended warranties are called service contracts. These extended warranties cover the costs of some unexpected car repairs not covered by the manufacturer’s warranty. They can be very profitable for the dealer and expensive for you. However, you don’t have to buy an extended warranty when you purchase a car or at any time.

When deciding whether to purchase an extended warranty, you should consider the cost of the extended warranty, the types of problems it covers, the additional length of time covered, and how you expect to use your vehicle. Extended warranties typically exclude routine maintenance such as oil changes and tire replacement.

You should also check whether the coverage of the service contract overlaps with the problems and time periods the manufacturer’s warranty covers to avoid paying for unneeded coverage. You may find that any additional coverage is not worth the additional cost.