Consumer Law

Does the Magnuson-Moss Warranty Act Cover Service Contracts?

By Amy Loftsgordon, Attorney
The Magnuson-Moss Warranty Act has certain requirements when it comes to service contracts.

Yes. The Magnuson-Moss Warranty Act (the federal law that governs consumer product warranties) includes very broad provisions covering service contracts.

When you buy a car, home, or major appliance, the seller might offer you a service contract. If you buy the service contract, the seller will provide maintenance and repairs on an item you bought for a specific time period.

While service contracts are often called “extended warranties,” they are not warranties. The difference between a warranty and a service contract is that a seller includes a warranty when you buy a product. A service contract, on the other hand, is a separate agreement made after the sale for an extra fee.

Under the Magnuson-Moss Warranty Act, if a business offers a service contract, it must conspicuously list all the terms and conditions in plain English. Also, the service contract cannot disclaim or limit implied warranties, except under certain circumstances.

To figure out if you really need a service contract, consider:

  • whether the existing warranty's coverage is the same as you would get under the service contract
  • whether the service contract is longer than the warranty
  • whether the product will need repairing, and
  • what you'll potentially pay for any repairs.

After a careful analysis, you might decide that it’s not worth it to buy an extended warranty.

Go to the main warranty FAQ page.

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