An extended warranty is a type of warranty offered to customers for a longer period to cover any electrical or mechanical malfunction of a product. Also referred to as a health insurance for engines as well as mechanical and electrical items, this can be offered by the retailer or the manufacturer of the product. This warranty is sometimes called as a service contract, service or maintenance agreement.
Unlike the express warranty, an extended warranty requires the payment of additional fees and usually for a percentage of the product’s retail price. For instance, 20 to 30 percent of the product’s retail price is charged for an extended warranty.
This type of warranty can last for several years depending on the preference of the customer. When it covers multiple years, the warranty normally states that in case of product malfunction within the first year, the consumer still has to deal with the manufacturer.
Apart from household appliances, other products that offer extended warranties include computers and electronics items to include digital cameras, video cameras and cars, among many others.
In cars, the warranty can extend up to 5 years or even 10 years. There are also companies that offer extended warranties or used car warranties for vehicles that are older up to 12 years old.
Consumers who want to ensure that they don’t suffer the cost of future repairs on the item they buy need to get an extended warranty. The warranty serves as your protection in the early years that you’re using a new product and in particular when that product you bought is an expensive one.