extended car warranty insurance explainedExtended car warranty insurance is a service contract between the car buyer and the motor warranty provider.  It is extended as it refers to a period after your initial manufacturing warranty has expired.

Firstly, a warranty is not to be confused with a service plan. Although they often run for the same time period or km limits, a service plan which is a lot more expensive deals with the servicing of the vehicle at pre-defined intervals and the warranty protects you against major mechanical breakdowns.

Some car purchasers are under the impression that their car is permanently under a manufacturing warranty.  This is not the case as there is a limited period that the car manufacturer will provide a free maintenance service.  Normally the car is under warranty for 3 to 5 years and 10 000km to 120 000km.  The extended car warranty insurance rate is cheaper the newer the car is as there is a lower risk involved.

Buying an extended car warranty insurance plan directly from the car dealer is not always a good idea. Often the prices are higher and the dealer is not upfront about what is and what is not covered.  It is recommended to obtain as much information as possible before you sign an extended car warranty insurance contract with the car dealer. It is prudent to get quotes on your extended car warranty insurance which is as easy as completing the form provided. 

There are some car dealers who misinform clients about extended car warranty insurance.  They make it seem as if you have to purchase it from them before you take your car.  This is not the case as you can purchase extended car warranty insurance at a later stage.  It is advisable to purchase it before the manufacturing warranty expires.

Some car dealers misinform car purchasers to buy extended car warranty insurance or else they will not receive loan approval from the bank.  This is not true as car dealers make money from selling extended service plans.  If you were coerced into buying into an extended service plan then you can claim your money back within 30 days.

When you purchase extended car warranty insurance ensure to gather as much information as possible. Your safest bet is to purchase an extended warranty from the manufacturer or from a trusted independent company.

You can find out information from perusing the internet.  You will come across several companies offering cheap extended car warranty insurance plans.  It is suggested to stay away from companies offering you cheap cover as it will cost you more to repair car damage that is not covered.

The point behind extended car warranty insurance is to cover car damage so that you do not have to pay out of your own pocket.  It makes sense to buy a plan such as a bumper to bumper plan. It is expensive but it will cover car repairs and maintenance.