Extended Warranties

Abstract

An extended warranty is a service contract, which covers the maintenance and repair costs of a product to its user at a fixed cost during the life of the contract. It may be bought at the time of the purchase of the product or at a later date. In the case of products sold under a manufacturer’s warranty (hereafter referred to as the base warranty), it is timed to take effect immediately following the expiration of this warranty. Service contracts are also sold in the market place to maintain products that are not covered by a base warranty. We shall refer to these simply as service contracts.