Insurance services and underwriting extended warranty contracts Forms for Middlesex
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FAQ
Service contracts and warranties both provide some element of repair or maintenance for a specific period of time. The main difference is that warranties are included in the purchase price and service contracts cost extra.
An extended warranty is actually an insurance policy on your vehicle, a safeguard against expensive, unforeseen repairs. It covers repairs for an agreed-upon period of time and miles. True warranties, though, are included in the price of the product.
A service contract is sometimes called an extended warranty, but service contracts are not warranties. A service contract can help you fix or maintain your product for a specific time like a warranty. But, unlike a warranty, service contracts cost extra.
An extended warranty or vehicle service contract covers the costs of some types of repairs in addition to or after the manufacturer's warranty ends. Extended warranties and vehicle service contracts typically exclude routine maintenance such as oil changes and tire replacement.
While it may sound like a good idea in theory, extended warranties often come with a high price tag and don't necessarily cover everything that could go wrong. Plus, many people who buy extended warranties never use them. In that case, an extended warranty becomes a cost with no financial return.
Service contracts, sometimes called extended warranties or maintenance agreements, are bought separately from the product. Similar to insurance policies, these contracts assure consumers that should something go wrong with a product, their investment is protected at a fraction of the cost of out-of-pocket repair work.