When purchasing an extended auto warranty, or extended service contract, there are two types of warranties that you may come across: factory backed extended warranty and aftermarket warranty. For many consumers, they might think they are getting a factory backed warranty, but instead get an aftermarket warranty. In many ways they are similar, but there are different in certain ways as well. Listed below are a comparison of the two that will make you more informed as a consumer.
A factory backed extended warranty is any vehicle protection plan that is offered by or endorsed by the manufacturer. They can cover various components of the vehicle. Most factory extended warranties can range from coverage of the powertrain to comprehensive coverage which can encompass most component of the vehicle. The range in coverage varies depending upon the manufacturer, the company selling the warranty, and the coverage levels. Along with covering components of your vehicle they can also offer benefits such as roadside assistance, alternate transportation and trip interruption. They can be purchased through a local dealership or through direct marketers.
An aftermarket warranty can be equal to or of greater value to a comparable factory backed extended warranty. They can even offer the same benefits, if not more, than those of a factory backed plan, but you need to be careful when reviewing the actual vehicle service contract for the specific coverage the plan offers.The only real difference is that an aftermarket warranty is not offered or endorsed by the manufacturer and a warranty administrator other than the manufacturer of a vehicle. These warranties can be purchased through local dealers, banks, credit unions, insurance agencies, direct marketers and local repair facilities.
So when you are looking at purchasing an extended warranty for your vehicle, you now have the knowledge to know he difference between an aftermarket warranty and a factory backed extended warranty. Now you can choose which one is right for you with confidence.