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Cars and Service Contracts

Extended Warranties 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 repairs or maintenance for a specific time. But there's an important difference: a warranty is included in the price of an item while 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.