If you feel like you don’t understand the auto warranty that is being offered to you, you are not alone. This is because there is a lot to review when it comes to the subject. 

First of all you should know that the Federal trade Commission requires all car dealers, new or used to give you or post a Buyer’s Guide about the vehicle.  This is the document that should tell you in exacting detail what type of warranty is offered. Sometimes these warranties are also called service programs.

The subject of auto warranties can be complex and there are several basic terms you should get to know.

The first is the term “As Is.”  This means that if you buy that used car (or even a new car) that the dealer will not be held responsible for any repairs that need to be done after the sale. The catch here is that some dealers will offer verbal promises but they are not bound to them legally.

You might also hear the terms Limited and Unlimited Warranties. The Limited warranty is exactly what it sounds like – it only covers designated things for a designated term of time. However surprisingly the unlimited warranty is the same thing.  All that the term unlimited means in this case is that any owner of the vehicle can take advantage of the coverage of the warranty within a certain amount of time and that the full price of repair will be covered by the agreement.  In the case of a limited warranty the percentage of repairs paid for may be restricted or there may be certain systems in the car that may not be covered. Coverage may also be restricted by mileage or time and they may have to state whether the owner is required to pay a deductible.

Along with talk about limited and unlimited warranties you are going to here about extended warranties. This is a confusing term because an extended warranty is really a separate service contract that is purchased. A real warranty is free and comes with your vehicle on the point of purchase.

However like a warranty an extended warranty does cover car repair insurance and pay for repairs.  The level of series varies greatly depending on terms of the agreement. Before buying an extended warranty it is important to read the fine print so that you do not accidentally buy duplicate insurance.

Yet another term you will hear a lot is “certified vehicles.” These are cars that offered in the good faith that the car is mechanically sound and not going to break down because the dealer has assured it. It is a term that mostly applies to the sale of used vehicles and it verifies that the car is in good shape.  Improvements in car manufacturing in general have made the appearance of certified vehicles more common on used car lots as they are so well made it is easier to guarantee them with some kind of warrantee on parts or service.