An assurance-type warranty guarantees that the product will function as intended. This type of warranty promises to repair or replace a delivered good or service if it does not perform as expected. ... The longer the warranty period, the more likely that it provides extra service to the customer.Aug 21, 2020
What is the difference between an extended warranty and a service contract?
Warranties are included in the price of the product. ... A service contract is sometimes called an “extended warranty,” but service contracts are not warranties. A service contract can help you fix or maintain your product for a specific time — like a warranty. But, unlike a warranty, service contracts cost extra.Jan 15, 2015
What does warranty service mean?
Warranty services are essentially fulfillment of the promise a warranty company like a manufacturer, retailer or service provider makes when selling a product with a warranty, or an extended warranty or service contract. Warranty services include maintaining, repairing, or replacing a warrantied product.
What is the difference between a warranty and an extended warranty?
Warranties are typically provided by auto manufacturers as part of the overall cost of a new vehicle. These warranties will cover certain problems and last for a certain period of time or miles of driving. Extended warranties or service contracts are offered or sold at an additional charge by auto dealerships.Aug 5, 2016
Is a service contract an extended warranty?
An auto service contract is a contract to perform (or pay for) certain repairs or services. Service contracts are sometimes called an “extended warranty,” but they're not a warranty as defined by federal law.
Is warranty a separate performance obligation?
Company A has concluded the extended warranty provides a service to the customer beyond the assurance that the product complies with agreed-upon specifications and, therefore, the service represents a separate performance obligation.
What is the difference between a warranty and a vehicle service contract?
The main difference is that, while a warranty is offered free of charge by the automaker, you pay for a service contract. ... Service contracts work similar to extended warranties in coverage period, such as XX months or XX,000 miles, and coverage items, things like check engine light repairs or transmission repairs.Dec 15, 2018