Warranties
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Service contracts
When you buy a car, home or major appliance, you may be offered a service contract. Although often called extended warranties, service contracts are not warranties. Warranties are included in the price of the product.
Service contracts come separately from the product at an extra cost. To decide whether you need a service contract, consider several factors:
- Whether the warranty already covers the repairs you would get under the service contract;
- Whether the product is likely to need repairs and what the potential costs might be;
- How long the service contract is in effect; and
- The reputation of the company offering the service contract.
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