When purchasing a vehicle, automobile extended warranties can offer many benefits that are well worth the investment.

Commonly referred to as "automobile extended warranty", when sold by a third-party, the product is considered a vehicle service contract or mechanical breakdown insurance depending upon the state in which you reside. For simplicity, we will continue to use the terms "extended car warranties", "mercury extended warranties", etc., for the remainder of this article.

Extended automobile warranties provide coverage that will not only pay the cost of repairs, but also help to deal with any inconveniences you may face in the event of a breakdown by offering such things as roadside assistance, towing, or rentals.

Basically, extended warranties are like insurance for your car. But, like any other form of insurance, it is important to do the research and find the best deal for your situation, taking into consideration the age and reliability of your vehicle, as well as your lifestyle, your finances, and how long you plan to keep the car before purchasing a new one. Remember to take the time to ask important questions such as deductible amounts, reliability ratings, and claim procedures so you know exactly what you are paying for and what to expect if you need to use the coverage.

Some extended warranty plans have received a lot of criticism, but by doing your homework, you can avoid bad experiences and ensure that you are receiving the best coverage for your money. Good extended warranties offer many advantages that make them a wise choice for car owners.

1. Extended and Supplemental Coverage.

Manufacturers' original warranties are limited, and the length of this coverage can vary for different parts or systems within the vehicle. An extended warranty not only goes beyond the age and mileage outlined in the original warranty, it may also cover things not included during the term of the manufacturer's warranty. For example, a manufacturer may only agree to cover repairs on an air conditioning system for one year, whereas your extended warranty may allow you to have these problems fixed without any cost to you for as long as the coverage is in place.

2. No Unexpected Expenses or Repair Bills.

Automobile extended warranties can reduce your stress level by eliminating surprise repair costs and out of pocket expenses. Repair costs are rising, especially with the increasing complexity of electrical and computer systems and the growing number of options being included in vehicles. With a good warranty, you can keep your car running perfectly without having to worry about receiving a large repair bill at a very inconvenient time. And, if you purchase an extended warranty at today's prices, you will also be protecting yourself from higher expenses in the future due to the increasing costs of parts and labor.

3. Peace of Mind.

Some people do not mind taking a chance on being "self-insured" and paying for repairs as they come. But, if you are not a risk taker and like the peace of mind of knowing that you can have your car fixed when it is needed without having to worry about saving up the money or juggling finances, then an extended warranty is a great option. And since most warranties offer other benefits such as roadside assistance, rental cars, or towing, you will still be able to get to work, make your appointments, and meet all your obligations without any inconveniences.

4. Flexibility.

Many manufacturer warranties require that you have repairs completed at a dealership. However, with 3rd party extended warranty coverage you will have the flexibility of taking your car to any certified facility, making it more convenient for you and ensuring that you are still protected even if the dealer goes out of business.

5. Increase Resale Value.

Many automobile extended warranties are transferable, making them a great selling point to a potential buyer. Also, it is likely that a car with an extended warranty has been taken care of and repaired properly, making it attractive to people looking to purchase a used vehicle.

If you shop around and find the right coverage for you, automobile extended warranties can be a great investment and will buy you the peace of mind of knowing that you are protected from the inconvenience and unexpected expenses often associated with vehicle breakdowns.