When you buy a car the dealer offers you a factory warranty for a limited period of time. This covers the repairs for a predetermined period or mileage whichever happens first. What happens at the end of it? You could easily buy an extended warranty for your car which would get you coverage for repairs.

Either the dealers or third party companies could offer you the extended warranty. Any agreement of warranty from a service provider other than the car dealer is an aftermarket car warranty.

Now the question is how to find the right aftermarket car warranty. You need to balance three important considerations – cost, coverage and service. Obtaining warranty from the dealer is the safest choice, as the dealer would definitely attend to all your concerns about the car. But the biggest deterrents are the high cost and low coverage.

While aftermarket warranties score because of low cost, one really needs to sift the hay from the chaff to zero in on reliable service companies. Refer to the trade publications like Better Business Bureau and get more information about the well-rated companies. Read the warranty agreement carefully for exclusion clauses as well as specific service requirements.

An aftermarket warranty could be a cost-effective solution for your car warranty needs but you need to be savvy enough to understand the contract fully before signing up for one.