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					Extended Auto Warranties
What is commonly referred to as an extended warranty is not actually a warranty, but an
extended service contract. An auto warranty comes from the manufacturer when you purchase a
new vehicle. The separate cost of the service contract is what makes it different from a
manufacturer’s warranty. Like other types of insurance an extended auto warranty, or service
contract, is something you might need.

Most of the negative comments you hear about extended warranties stem from people who
purchased an extended service contract without understanding the terms of the contract.
Manufacturer’s warranties cover certain mechanical breakdowns for a specific number of miles or
years. Extended warranties provide for specific services, under specific conditions, and usually
the service must be performed by specific auto mechanic shops.

Points to ponder before you purchase a service contract:

       Are you purchasing a service contract that duplicates coverage you have under your
        manufacturer’s warranty?
       Where did you learn of this company? Is the service contract provided by the
        manufacturer, auto dealer, or an independent company? Is the independent company
        referred by a company you already do business with or someone you know and trust?
       Check out the warranty company’s record with the Better Business Bureau, www.bbb.org
        or 703-276-0100.
       What does the contract cover or exclude?
       How are claims handled? Are you required to pay up front and seek reimbursement or
        will the mechanic shop file a claim with the warranty company to obtain payment for their
        services?

Check out Auto Exam automobile services for information and pricing on extended warranties
offered to members of U. S. Postal Service FCU. For a complete and detailed list of facts about
automobile extended service contracts visit www.ftc.gov to obtain a copy of the FTC Facts for
Consumers on Auto Service Contracts.

This information is provided by:
         U. S. Postal Service Federal Credit Union         800-877-7328 www.uspsfcu.org

				
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posted:11/23/2011
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