During these challenging economic times, people are opting to keep their cars longer and are choosing extended warranties for vehicle repairs and maintenance.  While finding an extended warranty service may be a good idea, it will only prove to be good if they pay for the repairs you need, when you need them.

Choosing a good, reputable warranty service can be tricky.  You see them advertised on television and hear them on radio, but is it all hype or are they the real deal?  How do you discover the truth?  

Remember this one rule: The warranty service provider is in business to make money.  They make their money first by paying out fewer claim dollars than they take in through premium payments.  Make sure that you know what is covered and what is not covered.

According to Carbuyingtips.com you should follow these few tips to manage your risk and your money when choosing a Auto Extended Warranty.

Buy Auto Warranties From The Source
Most online car extended warranty coverages are more affordable and more comprehensive than the dealer’s offerings.

Auto Warranty Coverage For Breakdown AND Wear & Tear
Many warranties only cover mechanical breakdown, not wear and tear. My friend's warranty refused to cover a new switch module, claiming "wear and tear".

Well funded and insured car warranty administrator
You want an administrator who deposits part of your purchase price into an insured "Claims Reserve Account" to assure sufficient funds pay a covered claim.

Auto Warranty Contract that takes effect the day you buy it
Most auto extended warranties start the clock when you buy the car. But what if you wait 12 months to buy a warranty?