Aftermarket auto warranties, also known as third party warranties, or extended auto warranties, have in recent years created a booming industry in the United States and Canada. There is no question that a good aftermarket warranty policy from a reputable third party provider can be beneficial to the consumer, but there are many dishonest and unqualified providers offering extended auto warranties. In the following chapters we will go in depth on what to look for when shopping for an extended auto warranty, how to evaluate a warranty provider, and educate you, the consumer on all aspects of an extended auto warranty contract. The aftermarket warranty business is a profitable business and the bottom line goal of any warranty provider is to make a sale. In this industry you will encounter the very best and sneakiest sales tactics aimed to reel in the consumer. By doing your own research, you can answer all of your own questions and lead yourself to the correct policy provider.

     Extended auto warranty companies operate much like an insurance company. You pay for a policy and they will honor any and all repairs that fall within the terms of their contract. Sometimes they end up paying out more then they take in, and you come out on top. More then half the time, it is the other way around. Many groups and individuals advocate AGAINST warranty extensions of any kind, citing that they benefit the companies more so then the consumer. That fact is true. For any warranty company to function and be able to honor their contracts they must take in more then they pay out. This does not mean they will not honor your claims or cut down payments. It simply means that the amount of claims being paid out is less then the amount the company brings in. Just like insurance companies, warranty companies invest their funds to build cash flow to pay claims. Think of your extended warranty contract working along the same lines as your car insurance. You purchase and keep car insurance in the hopes of never needing to use it, but if and when you need it, it is there for you, and ready to pay out much more then you have put in if necessary. Unlike car insurance, automotive warranty protection is not legally required. Purchasing an extended warranty can be beneficial to some more so then others. In the next section we will hit on some points which can help you decide if an extended warranty is right for you.

     When you purchase comprehensive warranty coverage from well known and highly rated warranty company, you have purchased piece of mind. There are many warranties that I have purchased and hardly used. During the coverage period I had piece of mind knowing that if something were to happened, I would be covered. In my opinion, the feeling of knowing that you are covered is almost invaluable.