Auto warranty refers to a specialized service delivered by the dealer in association with a third party vendor to maintain and repair the car for a period specified from the date of purchase. The auto warranty covers the repair and maintenance cost of the vehicle. However, it does not cover replacement of expensive spare parts of the vehicle.

There are two categories of auto warranties. They are fresh auto warranties, issued to brand new cars and after-market auto warranties, issued to used cars.
In fresh auto warranties, there are several packages. They are defined either on the basis of time or mileage covered by the vehicle. Under time-controlled warranty, the period can be between three months and three years from the date of purchase. Under mileage controlled auto warranty, it can be between 3000 miles to 30,000 miles, depending on the choice of the vehicle owner.
The auto warranty takes care of the drive train, power train, engine, brake mechanism and steering system under a normal package. There is another package called bumper-to-bumper auto warranty, which basically takes care of the entire car.
Review at least four packages from different third party vendors before arriving at a final choice. Always prefer a flexible package since it gives you the freedom of changing the agency.