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Extended service contracts are essential for drivers for a number of reasons. For one, they can protect you from unexpected repairs. But, before buying an extended auto warranty for your vehicle, you should take everything into consideration - just like you would when purchasing an actual product.

It's important to figure out who actually provides the service contract. Some are offered by manufacturers, dealerships or independent companies. Many service contracts that dealers provide are controlled by third parties who adjust claims and authorize payments. The overall cost of these contracts is usually dependent on the car make, model, condition and the duration of the coverage. Deductibles are sometimes included each time the vehicle is serviced or repaired.

It's imperative for every car owner to know what type of services are covered. Some service contracts only cover breakdowns and other issues that might inflict tremendous costs, while excluding minor maintenance like routine inspections.

Having a knowledge of these various factors will make your decision easier when choosing between different service contracts. For used car owners, extended service contracts are practically a necessity.