Do you know many extended car warranties out there are not worth the paper they are written on? It's true, and anyone who has worked in the industry extensively can tell you this is so. Some dealerships refuse claims on the smallest technicality. Some invalidate warranties because they did not forward to the warranty company their cash sales. Some do not walk customers through a contract, and don't explain gray areas that could later on cost customers a lot of sleepless nights, anxiety, money. Then there are those that go belly up almost overnight, leaving people with worthless contracts.

The truth is, many dealerships and repair shops out there are only too willing to take your money without giving you anything in return. Protect yourself by learning precisely what extended car warranties are about, and what to watch for.

Signs of a Reliable Plan

1. The company is certified by the Better Business Bureau.
2. You can choose whether to deal with an independent shop or with a dealership.
3. The warranty can be transferable.
4. You are provided a loaner car free of charge.
5. Coverage for trip interruption is offered.

1. Specific caps have been set on various - perhaps all - repair costs.
2. You will find more exclusions than inclusions on the contract.
3. The dealership pressures you to buy a plan.
4. The warranty is non-transferable.
5. You are required to cover for repairs out-of-pocket.

Some plans offer incentives, such as reimbursement for car rental or roadside assistance. These incentives are a great plus for anyone who travels long distances. But even if you don't, go over the fine print of your plan anyway. Look up what's covered and what's not. See how repairs are performed. Bottomline: you should only get your extended car warranties from someone you trust and know for a fact that you can.