With the increasing vehicles on the roads the need for warranties is also increasing. A warranty is the assurance given by one party to the other, usually from the car seller to the car buyer. It is a kind of treaty, which is legal, and both the parties are liable to honor it. A warranty for the new car is the guarantee from the seller that the product has no faults and is in perfect working conditions.

A warranty is of two types, namely new car warranty and aftermarket car warranty. New car warranty comes with the purchase of a new automobile. The cost of warranty is also one of the prime concerns while deciding which automobile to buy. However, these days the cost of warranty is included in the cost of automobile. Warranty is the coverage against the unanticipated repair cost and it can be either purchased from the dealer or the third party companies. Though buying warranty from dealers is expensive, but it is a safer option as they have the market standing. There are basically three types of warranties in the market, including bumper-to-bumper or power train warranties.

Therefore, warranties relives the car owner from the worry of cost of repairs, which one recurs in case of the breakdown.