Mechanical breakdowns are costly, but you don't have to pay for these unexpected mechanical problems yourself. Extended car warranties protect you from the very high cost of repairs. As a matter of fact, some extended warranties even go past a vehicle's base warranty!

Do you know you can use whatever rebate you get on a new car to pay for your warranty? You won't learn this information outright so ask questions. As a rule of thumb, car warranties are 40% cheaper when you get them online rather than from a car dealer. But don't buy the first warranty that you're offered. Take the time to shop around for an extended warranty quote - you can get several for FREE! All you will need to do is give your email address and within minutes, you can get a list of quotes.

Now, before you buy a warranty, be sure you understand exactly what you're buying. Ask what's covered and what's not. Ask if rental cars and towing are covered. Ask where your warranty will be honored. Most extended car warranties have nationwide coverage, but there are also those that are dealer-specific. For instance, if a warranty is offered by Mitsubishi, then it's honored at any Mitsubishi dealership. Ask, too, if you can still get coverage even if you take the car to a local mechanic. Odds are, your local car will not be able to submit any claim but you can.

It's also important you ask for the contract by email or fax. If the company you plan to deal with doesn't send this to you, don't buy from them. If several parts supposedly covered by the contract are not listed, then don't buy from them. If all you're getting is a slick sheet and not a contract, look for another provider quickly!

In a nutshell: extended car warranties pay for themselves over time, perhaps even the first time you make use of it. But before you buy, ask questions and examine the terms carefully. Ultimately, knowledge can save you a lot of money.