Understanding warranties is crucial to being a smart consumer. Warranties are agreements between the buyer and the manufacturer of a product which certify that, for a period of time, the product will work correctly. For example, if you buy a new stereo system, the warranty might state that for the first year of ownership, the stereo will be free of any defects or problems. If your stereo stops playing a week after you bought it, the manufacturer would be required to repair the stereo free of charge, or replace it with a new stereo.
Warranties vary from product to product and manufacturer to manufacturer. Some warranties may cover repairs for a longer period than others, or some warranties may cover only certain types of repairs. Additionally, sometimes you are given the option of buying an extended warranty, which lasts longer or covers more problems than the original warranty, but is not included in the price of the product. Some extended warranties may be worth the extra cost to you, some may not be of value to you. It's up to you to understand the terms of a product's warranty before you buy.