An auto warranty is a maintenance and repair service provided for a vehicle by a dealer associated with a third party vendor and the car manufacturer. A warranty is issued when a new or used vehicle is delivered from the showroom. An auto warranty covers the costs of replacing minor spare parts. It does not usually cover the cost of replacing more expensive spare parts.

Warranties are split into two categories: new car warranties and used car warranties. New car warranties are issued for brand new vehicles and used car warranties are issued to pre-owned vehicles or vehicles sold in the aftermarket.

When buying used car warranty, it is important to be on the lookout for fraudulent warranties that are in circulation in the warranty market. The US government created a law that protects car owners against fraudulent warranties. This law is referred to as the lemon law. If dealers sell warranties that are fraudulent and promise features that are not delivered, they are liable to punishment by the law.

A used car warranty can be expensive when compared to a new car warranty because there are several risks that are involved. Therefore, be wary when purchasing used car warranties in order to avoid fraudulent warranties. Assess at least five different offers for warranties before going ahead and purchasing one. Also, consult an auto dealer before making the purchase.