Avoid the middleman (the dealer) when shopping for an extended warranty. Most online warranties will be cheaper because the dealer does not mark them up.

A lot of warranties only protect you in the case of mechanical breakdown. However, not all parts break, some of them just receive wear and tear. Be sure to receive both when purchasing your warranty.

Make sure the administrator of the company is well funded and places every contract purchase prices into what is called a �Claims Reserve Account.� This guarantees that the company will have sufficient funds when paying for a claim.

Many extended warranties take effect on this purchase date of the vehicle. A good warranty should begin the day you purchase the warranty.

Some extended warranties require a deductible payment for every part that is fixed. If you take your car to a shop with your $100 deductible and they need to fix 3 parts, you�re out $300. Always look to upgrade to a warranty with no or low deductible.

If you are not pleased with your coverage and have not made any claims, the warranty company should refund your money in full within 30 or 60 days.

Some warranties only last as long as YOU own the car. Make sure to get a policy that will transfer to any new owners.

Most warranty companies allow you to purchase the warranty later. Always buy as soon as possible when it is going to be cheaper.

Make sure that your warranty covers these two items.

Check to see if the warranty includes things like car rental for when your vehicle is in the shop overnight and towing. Be sure that it is covered during the Standard Warranty Period. Some warranties don�t offer car rental, towing, or travel expenses for the entire period of the policy.

Don�t get stuck with a warranty that requires you to have repairs done at the dealership. This could sting you later when you go on a road trip. Instead, make sure you can have repairs done by any ASE repair shop nation-wide.

Only purchase extended warranties from companies that pay the shop directly for repairs. Avoid warranties that require you to pay the shop and reimbursed later.