New car warranties are designed protect you against the possibility that a component or system might fail before the age and mileage of your car could reasonably be expected to result in problems due to normal wear and tear. Manufacturers recognize that complex mechanical machines can break down because of parts or manufacturing issues, and they want you to have confidence in their product, so they offer warranties.
A car is a very large investment; usually second to your mortgage. You would never want to invest that much money into something only to put more money into repairs before their usual time. The auto industry understands this, and has set up auto warranties to protect the consumer.
Car warranties are a must for new cars. The average factory warranty for a new car is 3 years old or has approximately 36,000 miles, which ever comes first. Most basic warranty contracts should include coverage of your car's most critical systems: all of the car's power train systems, air conditioning, steering, and brakes. The next level of coverage adds power accessories, computerized instrumentation and other luxury items. The top level of service covers the extras such as the newest technology. These warranties are usually referred to as "bumper-to-bumper warranties".
You can also opt to buy an extended auto warranty for your new car. These warranties will be longer than the standard warranty. It could cover your car for additional mileage should anything go wrong with your car. The extended warranties your dealer offered might have covered towing fees, car rentals, and all of the parts that the factory warranty does not cover.
Finally, in addition to the length of the warranty and whether it suits your needs, you should determine whether or not the warranty is transferable. Warranties that will transfer with your car in a private sale can add value to your car.