Deposit Header Warranty For Free

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Most extended warranties are really service contracts, where you pay a fee ahead of time and then get free or discounted repairs if the product fails after the manufacturer's warranty expires. They may have more restrictions on the types of problems or repairs they cover, Brasler says.

Service contracts and warranties both provide some element of repair or maintenance for a specific period of time. The main difference is that warranties are included in the purchase price and service contracts cost extra.