Cars and Service Contracts
If you’re buying a car, an electronic device, or a major appliance, you may be offered the chance to buy an “extended warranty” or service contract. Both service contracts and warranties provide repair or maintenance for a specific time. But there's an important difference: a warranty is included in the price of an item; a service contract costs extra. It's an add-on that might not be worth the price.
Some service contracts duplicate the warranty coverage that the manufacturer provides; some cover only part of the product; and some make it nearly impossible to get repairs when you need them.
Here are a few factors to consider before deciding to buy a service contract.
Read more about Extended Warranties and Service Contracts, how the claims are handled, other options and more at consumer.ftc.gov.