Automotive extended warranty and service contract products offer additional protection for out-of-pocket burdens associated with maintaining a vehicle. Unexpected breakdowns and complicated technologies can lead to large repair or replacement costs. Extended warranty coverages are designed to help minimize the financial impact of these events and get you back on the road.  

Ancillary coverages help cover products associated with owning and operating a car. Some of these ancillary products include coverage for: 

• Dent and Ding Repair: In the case of a shopping cart dent, or a minor run-in with the garage door, a baseball, and so on, products such as Dent and Ding Repair help cover the cost of fixing the dent on the body of the vehicle. 

• Tire and Wheel: Many people mistakenly think the manufacturer's warranty covers the tires and wheels of their vehicle. However, when they get their first flat tire, they quickly learn otherwise. While roadside assistance offered by many car companies will assist with switching out the bad tire or towing the car to a repair shop, the actual cost of the repair or replacement comes right out of the owner's pocket – unless, of course, they've purchased tire and wheel coverage. 

• Theft Protection: Car thieves continually devise new and sophisticated ways of stealing vehicles, such as acquiring access to smart keys, switching vehicle identification numbers and even stealing identities to secure loans for more expensive vehicles. Products to safeguard your vehicle include theft deterrents or vehicle recovery systems to prevent thieves from stealing your car. If they fail to prevent this from happening, coverage will be afforded to you for the cost of your primary insurance deductible, as well as help towards your new car costs. 

• Windshield Chips and Cracks: Did you know a damaged windshield might also interfere with the airbag's performance and threaten your overall safety on the road? Even the smallest crack can lead to the destruction of a car's windshield over time. It's vital to repair a cracked or chipped windshield as soon as possible, and it's one of the coverages provided in the ancillary suite of products. 

• Key/Key Fob Replacement: Almost all new automobiles come with key fobs, devices programmed to communicate with all the car's systems, including the ignition, doors and trunk. Many also include a panic button for emergencies. If lost or misplaced, these high-tech devices can be costly to replace. Some ancillary offerings will cover the cost of replacing the key fob. 

• Appearance Protection: People want to keep their new vehicles looking as shiny and clean as the day they drove them off the car lot. However, outdoor factors like inclement weather, tree sap, bird droppings and other elements can damage the exterior. At the same time, discoloration from the sun's rays or food and beverage stains can ruin the interior. Ancillary appearance protection products can help preserve the pristineness of your new car, inside and out, and offer remedies to resolve the messes they fail to protect. 

The cost of an automotive extended warranty varies depending on what is covered and where and how it is purchased. The top-tier coverage for extended warranties or vehicle service contracts covers a wide range of breakdowns and will typically have the most value. Engine-only coverages are available at a lower price point. Generally, the cost is directly related to the quality of coverage included in the plan.  

New car owners should consider Guaranteed Asset Protection (GAP) to help cover the costs if they experience a total loss of their vehicle. GAP ensures that vehicle owners won’t incur a loss if the vehicle is damaged beyond repair or stolen and never recovered by paying the difference between the insurance settlement amount and the loan or lease balance.  

If you buy GAP at the time of purchasing a new or used car at a dealership, a flat fee for the coverage and ongoing interest will be added to your vehicle financing. Your interest GAP coverage rates vary based on the term of your loan and the ratio of the loan amount to the value of the vehicle.   

Auto extended warranties are offered to new and used car buyers and leaseholders at the time of or near the purchase date. The coverage is available for purchase typically from three sources:  

• Car dealership at time of purchase  

• A direct-to-consumer company that sells auto extended warranty after the vehicle has been purchased  

• Affinity groups that offer benefits to their members. i.e., Credit Union, Bank, Credit Card 

Before car buyers drive their new or used vehicle off the dealership lot, the salesperson may offer a vehicle service contract that goes above and beyond the manufacturer's warranty. In addition to the extended car warranty, several ancillary products extend coverage to provide helpful benefits to consumers to ensure their out-of-pocket costs for repairs are kept to a minimum. This coverage is recommended to be purchased either at the time of the vehicle purchase or before the manufacturer’s warranty expires.  

The car factory warranty length depends on the car manufacturer. The usual manufacturer bumper-to-bumper warranties on new cars last between 3 years/36,000 miles and 5 years/60,000 miles.  

A vehicle service contract or extended warranty, in some cases, can go beyond the manufacturer's warranty for coverage up to 250,000 miles. 

Every type of warranty coverage has exclusions, so it is important to thoroughly read the terms and conditions. For example, manufacturer and extended warranties do not cover normal wear and tear or damage from the lack of regular maintenance or due to an accident. Extended automotive warranties usually do not cover damage from natural disasters, lightning strikes or hail damage. They also will not cover modifications made to the vehicle, improper installation or some pre-existing conditions.