When shopping for an extended auto warranty, you should be most interested in seeing a copy of the actual contract you would be signing if you purchased any given company's coverage. Whatever you see on a web site, printed brochure, television commercial, or hear on the radio is a sales pitch. If the sales pitch grabs your attention, that is fine, but what is written in the actual contract is everything the company legally promises you and what you have rights to in the event of a claim. NEVER purchase an extended warranty for you car as an impulse buy, without seeing the contract. (If you are reading this, you probably already know that). Understanding what you are reading as you review the contract can be difficult, so we will go over some things.

     You should have easy access to the actual contract. If you are shopping for an aftermarket warranty on the internet, and cannot find a link to a warranty company's actual contracts within a few clicks on their web site, then take you business somewhere else. Companies that make it difficult to access their contracts probably do not want you to see them until it is absolutely necessary.

     The contract will outline effective date of coverage, procedures and conditions regarding claims, conditions to obtain reimbursement, what components are covered (or which components are excluded), transfer rights, benefits, termination, etc. You need to read everything in the contract, and read it carefully. Some contracts will list definitions before getting into the terms and conditions of the policy. These definitions will help you understand the legal language used in the contract itself. In the contract there will be a contract effective date or contract period. This will define when your coverage begins, and any company specific instructions regarding beginning your coverage.

     Some companies will include a time and/or mileage period that must be met after your warranty purchase, but before your coverage begins. These periods are created to help deter warranty fraud, when people purchase a warranty with their vehicle already needing a major repair. Most contracts will also state that they will cover "reasonable" or "market value" cost of repairs and replacement. All contracts list which components are covered, or which components are NOT covered (rare). If it is not listed as covered in your contract, then you should not assume it is covered. Seals and gaskets are usually covered only when necessary with a repair, as are fluids.

     Benefits (rental, towing, travel expenses, roadside assistance) are outlined in the contract. The contract will list the limitations of each of these services and in some cases how these limitations are calculated. Never purchase a warranty based on the benefits included, the repair coverage is the most important. Benefits are included in order to help sell the contract to the customer.