When shopping for your aftermarket auto warranty you want to understand and realize the difference between a legitimate aftermarket warranty company and an aftermarket warranty broker. A legitimate aftermarket warranty company is the actual warranty company that is providing the contract and coverage. You will deal with this company directly when you are inquiring about coverage, either on the web, by phone, or mail. Their name will also be on the actual contract, and you will also submit and process claims through this same company. These providers are usually the ones that have been in business longest and are the best known, but keep in mind this does not necessarily mean they are providing the best coverage at the best price.

     A warranty broker is company that sets itself up to project the appearance that it is a first hand warranty provider. This is not the case, these companies are middlemen and therefore the contract prices are inflated to incorporate large profits. Many brokers are known to be here one day and gone the next, so besides some exceptions, it is best to steer clear of warranty brokers. There are some warranty companies that do not sell their policies directly to the public. These companies are set up to use a 100% affiliate sales strategy, as the company focuses its operations on contracts and claims. The brokers that sell policies for companies like this can be fair and trustworthy. A 100% affiliate based warranty company offers their policies through retail outlets such as used car dealerships. At the point of sale, the dealer will offer the customer an extended warranty contract. These contracts can be very comprehensive, but again, it is a profits game. The dealer has a profit margin built into the price of the warranty extension, so bargaining should occur at this point. Be sure to read the entire contract and all fine print. Companies that are dealership based usually do not sell their contracts directly to the public. The reasoning behind this is that the dealership also serves as an inspection point prior to adding coverage to a vehicle. In most cases, if the vehicle is being purchased and driven from a dealership lot, that car is most likely in sound mechanical condition.

     Never believe that you need to make the decision to purchase on the spot. If you decline to purchase a warranty contract at the point of sale, that is fine. No dealer will turn you away if you come back to purchase coverage. The reason the dealer wants you to purchase the contract right away is to take advantage of your vulnerability. You have probably just spent a lot of money and the warranty contract does not seem expensive in comparison. You have built a trust with the dealer and want to believe everything he/she is telling you. Lastly, the dealer probably does not want you to go out and research the contract, or find a better alternative.