Extended Warranties

November 24, 2013

New Cars for Sale

If you are planning to buy a new automobile, home appliance or electronic device, chances are the company will offer to sell you an extended warranty. An extended warranty is intended to protect you if the product breaks after the original warranty expires.

There are two basic kinds of extended warranties:

  1. The manufacturer of the product extends the original warranty for an extra charge.
  2. A warranty firm provides third party extended warranty coverage for future repair costs. It is important to note that if you purchase a third party extended warranty and the company goes out of business your warranty may no longer be valid.

When purchasing an extended warranty contemplate the following:

  1. Who is providing the extended warranty? Is it the seller, manufacturer, or a third party?
  2. What are the terms of the extended warranty? Is it simply an extension of the manufacturer's original warranty or are there any further limitations and/or restrictions?
  3. Consider that you are prepaying for repair services which do not take effect until after the original warranty expires, which is essentially years from now. Recognize the likelihood of utilizing the repair services, the length of time you intend to keep the item, and the value of the item at that time.

New Vehicles

If you are purchasing a new vehicle, you may be asked if you are interested in purchasing an extended warranty. The length of the extended warranty will vary, depending on your needs, from one year up to 7 years in the future. Speak to your dealer and find out which type would be more beneficial to you:

  • Bumper to Bumper
  • Powertrain Coverage
  • Component Coverage

Usually MANUFACTURERS'S WARRANTIES are transferable to the new owner, should you decide to sell your vehicle before the warranty expires.


When purchasing an electronic device you need to ask specific questions to determine what type of warranty would be best suited to your personal or business needs. For example, when buying a new computer, most manufacturers offer a full replacement of the product. Like all warranties, it is important to read and understand the fine print including the limitations. So make sure to test your product(s) as soon as possible. Most products carry a full warranty on DOA (dead on arrival) for up to 30 days. For computers, it is a good idea to do what is called a "burn-in" on your machine when you bring it home; which entails leaving your computer on for up to 3 days. This burn-in process should terminate any substandard or heavily worn parts while the warranty is still valid. It is always wise to verify and obtain written assurance that a store offers a warranty on a product before making the purchase. Inquire how warranty repairs are to be undertaken. For example, is it:

  • On Site Service, whereby a repair person comes to your home or business to do the necessary repairs
  • Complete coverage on the parts and labour, or limited coverage on parts and labour or parts only coverage

Manufacturer’s warranties vary according to the product. You should ask specific questions regarding the above services. So-called "white" brands such as washer/dryers, fridges and stoves usually carry extended warranties with on-site service. "Brown" brands such as televisions, computers, printers, fax machines, stereos, VCRs, toasters, irons, cellular phones, etc. are usually covered under DEPOT WARRANTIES, which means that you will have to re-package your product and send it to the nearest depot for repairs. In this case, be prepared to pay for shipping and handling and possibly return postage from the depot. A warranty does not automatically guarantee you will receive a replacement during the time your product is being fixed, which may take several weeks depending on the nature of the repairs.