Impeccable production and great maintenance services have made cars today an efficient instrument. However, regardless of their quality, cars start facing issues after a while, requiring repairs. In some cases, the damage is too extensive to repair and hence, the sole option available is to replace parts. Depending on the damage to the vehicle, the components that need to be replaced can be very expensive proving to be a financial nightmare.

If you have run out of factory warranty, the costs of replacing any car part can be huge. The only solution to this problem is opting for extended car warranties. However, it is not a one-stop solution for all your car problems. You need to know certain things in order to get the best out of your extended warranty. Here are a few questions answered so you can truly understand extended car warranty benefits:

1. When should you buy an extended warranty?
It is better to purchase extended coverage as soon as your purchased car is delivered to you. Waiting any further may subject you to using the factory warranty until it expires. While you can still buy an extended warranty after the factory warranty expires, renewal of the warranty may have some restrictions.

2. Is the factory warranty enough?
The reliability of a factory warranty is subject to how long you wish to own the car. If your standard warranty covers you for three years and you wish to sell the car around the same time, standard coverage is the perfect option for you. On the other hand, if you aim to use the car for a long time, as most people do, the factory warranty just will not be enough. In such a case, you can purchase a service contract to get all the extended car warranty benefits.

3. Who underwrites the warranty you wish to buy?
When talking about who backs your extended warranty, the answer is either the manufacturer or your dealer. You should note that backing the warranty does not mean selling it to you. It merely means that this entity has underwritten your extended warranty policy. Having knowledge of who would underwrite your extended warranty will help you gain a better understanding of the policy.
For example, policies backed by the manufacturer have high value when taking into account trust and convenience. Certain dealers only offer an aftermarket warranty.

4. Can your warranty be transferred?
Most extended warranties become invalid when your car is sold to a new owner. This means that the new owner has to buy a new warranty. However, if you purchase a policy that allows you to transfer it to a new owner, this can be used as a tremendous selling point for any interested buyers. If you check this before taking a warranty extension, it can become one of the main extended car warranty benefits for you.

5. What exactly is covered?
This is one of the most important questions to ask. You should know what your warranty covers and what it does not. Ensure that your extended warranty provides coverage for breakdowns, along with wearing down of parts.