Types of Extended Auto Warranty Coverage

There are different levels of coverage for different extended auto warranties.

Luxury Coverage Auto Warranties
True bumper-to-bumper coverage with added "luxury items" covered. Luxury items can include: GPS/Navigation, DVD/Entertainment, and Bluetooth.
Bumper To Bumper Extended Auto Warranties (Also Called Exclusionary Auto Warranties)
In this type of auto warranty, everything is covered except what is on the "exclusions list." Make sure you read the list of exclusions carefully. This type of coverage is most often recommended.
Intermediate Auto Warranties ("Named Component" or "Stated Component" Auto Warranties, "Inclusionary")
Unlike the one above, this lists items that are covered. Read this auto warranty very carefully, to make sure that nothing you need covered will be left out.
Big Ticket Item Coverage
This type of auto warranty covers major items on used cars.

Benefits included in some auto warranties:

Important terms you need to understand when thinking about coverage.

Wear and Tear.
Most parts wear over time. A part will often begin showing signs of distress or even malfunctioning before it fully breaks. Wear and tear means that this part can be replaced before it breaks completely. You can get it fixed while it is breaking, this is often much safer than waiting for something to break. CARCHEX contractually defines wear and tear as the "gradual reduction in operating performance due to normal wear and tear."
Seals and Gaskets.
Seals and gaskets are vital when it comes to protecting the fluids in your car. Seals and gaskets are in the engine, transmission, drive axle, steering, AC and cooling systems. The failure of seals and gaskets can lead to extreme damage and very costly repairs: all major car systems have a seal or gasket and a large percentage of all repairs over $2000 involve a seal or gasket. You want an auto warranty that uses the language: "Seals and Gaskets are covered."