Extended warranty companies run the gamut from fair, honest providers, to call center flim-flammers whose only purpose is to separate you from your money. There are good reasons to purchase an extended warranty, but separating the good companies from the bad is a challenge.
We found that the automobile companies’ own extended warranty contracts tended to be among the best. Based on our extensive research of third-party contract providers, we recommend Endurance or CARCHEX.
Car Talk has spent the last two years diving deeply into the warranties industry for the benefit of our readership and long-time listeners. Our process for deciding on the best warranty companies is exceptionally thorough, involving in-depth research and our unique secret shopper initiative. We compiled over 50 data points across all reviewed companies to refine and inform our selection process. Car Talk reviewed the following important criteria for each company:
Consumer Satisfaction: Cross referencing multiple trusted resources to pull our fair and balanced customer reviews.
Cost: Utilizing our secret shopper initiative, we got comparable quotes across all companies so we can validly compare pricing.
Coverage and Offerings: Our research team delved into the coverage and offerings for each company, comparing what is available, including extras and discounts.
Official Ratings: We consulted a wide range of verified review sites to extrapolate a ratings score for each.
If your car doesn’t fall into one of the brand-specific service contract companies, check out CARCHEX. They offer service plans for all brands, both new and used. They also have an A+ rating from the Better Business Bureau, meaning that they respond to whatever complaints they get, and they’re probably not hounding you on the phone late at night.
CARCHEX is a service contract broker, so within every tier of their coverage, they have several offerings from third party vendors that can meet your needs. For example, at the highest level, (Titanium Coverage) CARCHEX offers plans from six agencies that run from seven to 10 years worth of coverage.
That’s very important to understand. CARCHEX does NOT administer these plans. They only sell them. Several of the vendors in this list are going to be the same, but others are direct providers, meaning that they administer what they sell. All things being equal, we’d choose a direct provider over anything else. The not-so-hot part of the coverage is that the plan is a reimbursement. Remember the health plan you had years ago that paid for nothing until you paid for it first, then you had to go through a labyrinthine procedure of filing claims with receipts and that whole deal? That’s kind of what’s happening here. It’s not the most convenient thing in the world, and you’re still going to have to pay for the repairs up front. To us, that really defeats the purpose of having an extended warranty in the first place. The whole idea is to AVOID paying for costly repairs, not to pay for them and hope some other company is going to cover them at a later date.
You’ve also got a paradox of choice going on with CARCHEX. They have 21 different plans ranging from Titanium, Platinum, Gold, Silver, and Bronze, and then down at the bottom somewhere Brass, Tin, Wax Paper, and Doublemint Gum Wrapper (we’re kidding about the last ones.) This makes it REALLY, REALLY DIFFICULT to figure out what one plan offers versus one of the other CARCHEX plans. Again, all things being equal, we’d choose a vendor with, oh, maybe SIX plans that are easy to understand. The number of plans alone makes it feel like you’re missing something, and you probably are.
In addition to the service contract coverage, the plans also provide some added benefits, such as:
CARCHEX Pros and Cons
For more in-depth information, read our full CARCHEX review »
Endurance is the provider you’re likely to hear the most about because they spend a gazillion dollars marketing everywhere. If you’ve ever searched “extended warranty” in Google, these people have been following you around like they used to threaten you about your “permanent record” in junior high. Kidding aside, the Better Business Bureau posts a warning on its website about Endurance. However, the company’s practices seem to be improving. BBB has monitored mailers recently being circulated by Endurance Warranty Services, LLC and the most recent mailers appear to meet the BBB Code of Advertising.
Although Endurance isn’t accredited by the BBB, they have a solid 4.4-star rating with TrustPilot.
Unlike CARCHEX, Endurance is a direct provider, meaning that they not only sell the plan, but they also administer it, too. That’s a benefit that we can’t stress enough. In the business world, it’s known as “one throat to choke” when things go wrong. The same company that sold you the plan is the one that’s administering it, so a problem is less likely to turn into a circular firing squad.
Unlike some of the other providers, there aren’t 839 confusing plans to figure out. They have four levels of coverage: Select Premiere, Secure, Superior, and Supreme. The difference in those plans is how much the plan is going to cover. Secure, for example, appears to only cover what a Powertrain warranty would. As you step up the ladder, you get coverage on other ancillary services. Supreme appears to be a fairly comprehensive, bumper-to-bumper-style service contract.
If you're not exactly sure which level of coverage is right for you and how it may impact pricing, Endurance does a great job of making themselves available to answer questions. They can be reached at (855) 534-1173, or they have a chat function on the website that’s actually responsive and helpful.
Again, with a program like this, you’re going to pay for the repair up front and get reimbursed for the repair when you’ve submitted receipts, which, frankly, kind of stinks. If you’re going to have to have money available to pay for repairs, you might as well just put money in a savings account and not pay for an extended warranty, right?
One of the positives is that you can get your car serviced at any ASE-certified shop, which means you’re a lot closer to getting your car fixed if you’re in the middle of nowhere with a breakdown. That’s not an unwarranted concern. For example, if you are away on a ski vacation in the Great White North, towing the car all the way to a dealer is going to be a problem.
Other benefits to the program include:
Endurance Pros and Cons
For more in-depth information, read our full Endurance review »
autopom! (the exclamation point is part of the name, don’t blame us for terrible marketing) stands for “automotive peace of mind,” and claims to be protection from expensive auto repairs.
What’s important to note right up front is that autopom! is one of those extended warranty brokers, meaning that they don’t actually provide the services that you’re paying them for. Every one of its plans is administered by another company. The question you have to ask yourself is “Why would I pay money to this company, when the services are being rendered by yet another company?”
It’s a good question. You can look at any one of autopom!’s plans, figure out who administers it, and buy it directly through them, which cuts out the middleman. For example, if you look at the plans detailed, several are administered by Mercury. Why not just go directly to Mercury Insurance yourself and buy that plan there?
The answer is one part convenience and one part cost. Because autopom! is a very large client of the plans it acts as a broker for, it can offer you a plan for about the same cost that the plan’s creator will sell it to you directly for. This is similar to shopping for other consumer products. The manufacturer of an item may sell directly, but they try hard not to undercut the large retailers they work with as partners. Have you ever compared the prices of a smartphone from your cell service provider to the price of the same model from the manufacturer? The convenience part comes from these specialist brokers’ ability to quickly know which contract provider will offer which contract for your situation at the best price.
It’s important to note that none of the plans autopom! offers are available in every state, and several of the plans are only available in California.
Depending on which contract you purchase, there are some side benefits to the warranty as well:
autopom! Pros and Cons
For more in-depth information, read our full autopom! review »
Toco Warranty Corporation was founded in 2013 in California. This reputable company is backed by AmTrust Financial Services. Despite being a new kid on the scene, Toco has quickly built a solid reputation with an A+ rating from the Better Business Bureau. Customer reviews of Toco also run above average. On Yelp, the Toco reviews average to 3-stars and at BBB Toco has earned a 4.5-star average.
Toco is known for offering affordable plans with no down payment and the ability to pay monthly. They have plans to fit almost any budget out there. Toco is also one of the rare companies out there that provides coverage in California.
Additional benefits in all Toco plans include:
Toco Pros and Cons
For more in-depth information, read our full Toco Warranty review »
Before the Federal Government’s bailout of General Motors, Ally used to be called GMAC and was GM’s captive finance company. After the bailout, GMAC was spun off into a new company called Ally, and when it was, it launched its own service contract offering (GMAC used to administer a similar plan to the GM Extended Protection Plan
It’s a bit of a hybrid because Ally isn’t manufacturer-dependent. You can cover just about any car with Ally. It’s also important to note that it’s a reimbursement plan. If something fails that’s covered by the plan, you submit the receipts and Ally reimburses you for the expense.
If other plans are like collision insurance, think of Ally like an HMO. If your car breaks down, you have to contact Ally to receive authorization before the work can begin. You then submit your invoice to Ally and they reimburse you for the expense.
While not as convenient as some of the other plans, there are a handful of benefits to consider. You aren't restricted to using a dealership’s service department. As long as the repair has been authorized, you can use any mechanic you like. If you have someone you trust in town and the dealership is three towns away, that can be a great benefit. It also provides the use of new, used and remanufactured parts.
The thing we like best about Ally is that the plans are very clear cut, and the contracts contain the specifics for every plan that Ally offers, making it much easier to figure out what’s covered and what’s not by any given plan.
What’s difficult to figure out with Ally is if anybody likes it. As we mentioned, Ally is a massive corporation. It’s real bread-and-butter is auto financing, so when you go to the Better Business Bureau or any rating agency, all -- and we mean ALL -- of the complaints are about people who defaulted on their car loans being harassed to pay their monthly note or run the risk of having the car repossessed. NONE of the hundreds of complaints we read had anything to do with the extended warranty program.
Like the other plans, there are also some significant side benefits to Ally Flex Coverage:
ALLY Pros and Cons
For more in-depth information, read our full Ally Financial review »
If you’ve got a Stellantis brand vehicle (Chrysler, Dodge, RAM, Wagoneer, Jeep, Alfa Romeo, Fiat), you should be taking a serious look at Chrysler Warranty Direct before you even consider any other service contract provider.
CWD is an example of a provider that includes all three of our key attributes. They’re a direct provider, meaning that while they’re selling you a contract, they’re also administering the contract when things have gone wrong with your vehicle. Chrysler Warranty Direct also utilizes nothing but OEM parts to service your vehicle, meaning that when it leaves the garage, it will have the same quality parts it left the factory with. Finally, all of the work performed is at authorized, franchised FCA dealerships, by technicians trained by the manufacturer.
Finally, all of the work performed is at authorized, franchised FCA dealerships, by technicians trained by the factory.
CWD has three tiers of contracts. Its most basic plan is called powertrain plus and focuses on about 350 parts of your engine and transmission. Added Care Plus covers over 850 different vehicle components, and you can adjust the term from two to two to eight years, and mileage from 60,000 to unlimited. Maximum Care offers the same flexibility in time and mileage, but covers significantly more, with 5,000 components covered, replicating the factory’s original bumper-to-bumper coverage.
In addition to vehicle protection, the plan also provides several other benefits:
You can also adjust the length of time and the deductible to reduce the monthly cost. The second tier of the service contract is as robust as the original warranty and provides bumper-to-bumper coverage for years after the original warranty runs out.
Chrysler Warranty Direct Pros and Cons
For more in-depth information, read our full Chrysler Warranty Direct review »
Similar to the Chrysler warranty, GM Extended Protection Plans cover GM vehicles (Chevrolet, Buick, GMC, and Cadillac) and extend the coverage of the bumper-to-bumper warranty up to 10 years. GM administers this plan, but the plans are sold through authorized resellers and franchised GM dealerships.
With a GM Extended Protection Plan in place, you don’t need to carry paperwork or special membership cards. Using your vehicle identification number, any authorized GM dealership in the country can access your plan level and provide services using their factory-trained technicians, and service your vehicle with GM-specific parts.
The plan comes in two levels, Silver and Platinum. Silver is an affordable plan that covers major components like the engine, transmission, transfer case, drive axles, factory-installed turbo- or superchargers, steering components, brake components, electrical system components, factory air conditioning components, and seals and gaskets.
Platinum offers everything in the Silver plan, but adds essentially an extension of the factory’s bumper-to-bumper coverage, protecting you from expenses related to failures in items like the entertainment system, rear vision camera, blind spot monitoring system, adaptive cruise control, and anything else that isn’t a normal wear item.
In addition to vehicle protection, the plan includes several built-in benefits:
GM Extended Protection Plan Pros and Cons
For more in-depth information, read our full GM Extended Warranty review »
Olive is a company which offers mechanical breakdown insurance coverage (a.k.a. An extended warranty). Olive is part of Repair Ventures, the company that also offers contracts under the name TriStar. Olive is a legitimate company in business for over a decade that has solid credentials.
Repair Ventures is rated A+ by BBB and reviews posted there have an average of 4.5-stars, though that rating is based on very few reviews. We dug into the BBB complaints and noted quickly that almost all of them were responded to by Olive with a statement that reads, “Olive sells mechanical breakdown insurance to consumers for their automobiles. Please note that Olive is not the coverage administrator of the mechanical breakdown insurance and does not therefore review, grant, or deny claims.” So add Olive to the long list of brokers that sell you something and then point to others when things go sideways. This example epitomizes why Car Talk harps on the difference between a contract provider and a broker.
Olive offers three tiers of coverage similar in most ways to the programs other similar companies offer. Powertrain is bare bones and covers very few things. Powertrain Plus is similar to your vehicle’s powertrain warranty with a few added protections like your AC compressor and alternator. Complete Care is the most comprehensive and most like a bumper to bumper warranty. Be sure to read your contact closely for details on what is, and what is not, included.
Olive partners with RepairPal to provide repairs. That’s great if you don’t already have a trusted mechanic, or want your brand’s dealer to work on the car. It’s bad if RepairPal isn’t local to your driving area. Olive also allows you to use an ASE-certified repair shop of your choosing.
Like Car Shield, Olive offers a subscription-based payment plan. You pay about $130 per month for the top tier plan, or less for the plans that offer less coverage.
Olive Pros and Cons
ForeverCar is one of the most unique companies on Car Talk’s list of service contract providers. Unlike almost every company of this type, ForeverCar does have a plan that includes a list of wear items. Also, ForeverCar wants to be more than just a place that argues with you about a bill after you need a repair. The idea is that you rely on ForeverCar for a lot more.
ForeverCar’s pitch is that you call them when you break down or need something fixed and they sort of “take it from there.” They even suggest where you should take the vehicle for the needed service. Like almost all plans, emergency towing and rental car coverage can be part of your contract.
There are four plans offered by ForeverCar, and our analysis of what is offered impressed us. Particularly the Platinum Plus plan. Here’s how they break down in summary form:
We were happy to see that ForeverCar earned an A+ rating from the Better Business Bureau. A handful of Google Reviews averaged 3.4-stars. Many of the most recent were positive. If you are looking for a vehicle service contract company that breaks the mold a bit, ForeverCar is worth checking out.
ForeverCar Pros and Cons
We provided a full review of CarShield, and it doesn’t fare very well compared to some of its competitors, mostly because its reviews on several review sites were dismal.
CarShield offers six different levels of coverage (Diamond, Platinum, Gold, Silver, Aluminum, and coverage specific to Motorcycles and ATVs). The difference in coverage is mostly the exclusions. The Diamond level of coverage has the fewest exclusions, while the Aluminum level has the most, meaning that a Diamond plan would theoretically cover more potential service failures than the Aluminum would.
Again, CarShield is a broker of these plans, not the company that’s actually going to administer them. To us, that’s a negative. There’s not much reason to buy a warranty from a broker, when the companies that provide those warranties are clearly spelled out in the company’s product offerings. CarShield is located in St. Peters, Missouri, but all of the warranties it offers under “Diamond” level protection are administered by American Auto Shield, located in Lakewood, Colorado.
Depending on which level of service you select, CarShield does provide some additional benefits:
CarShield Pros and Cons
For more in-depth information, read our full CarShield review »
AA Auto Protection is a vehicle service contract broker. Be aware that there is no connection between this company and AAA, as in the American Automobile Association. Like many businesses, AA Auto Protection seems to have taken the “Yellow Pages Search” approach to naming its company. When we first found the company’s site we found that the company says it has “Over 100 years of experience.” Yet, in its company history it also says it was incorporated in 2003, which is 19 years, if we did our goes-intahs correctly.
The reason for the discrepancy is that AA Auto Protection is a broker, not a direct provider of service contacts. Its founders must have worked at other companies in the same business. It seems like they may have taken the same notorious practices over to the new company.
AA Auto Protection is rated F by the Better Business Bureau, which posts a warning about the company on its page. Every review we could find from customers for more than two years were uniformly negative 1-star sob stories.
AA Auto Protection offers various plans, but the offering section of the site was inoperable when we researched it. We read reviews of the company we could find from third parties and couldn’t find any information that stood out as unusual by comparison to most plans. That’s likely because the company is simply brokering deals for other actual service contract providers. We advise Car Talk readers to tread carefully.
Infinite Auto protect is a company we are uncomfortable reviewing in depth. In December of 2021, the company was ordered by the State of California to stop operations and presently faces a half-million dollar fine for business practices that the state objects to.
The Better Business Bureau gives Infinite Auto Protect an F grade. We sorted the hundreds of customer reviews at BBB by date and found they are all the lowest-possible score of 1-star as far back as most of 2021. The company scores a 1-star rating on Google Reviews as well. Given these facts, we feel that it wouldn’t be fair to our Car Talk readers to provide more information about this company.
The warranties we’ve mentioned here all fall into a couple of different categories:
Companies like Carchex and Endurance are third-party warranty providers. They exist only to administer extended warranty services. They’re neither affiliated with your car dealer, nor the manufacturer of your car.
Pros and Cons
Vendors like Chrysler Warranty Direct and the GM Extended Protection Plan are offered and administered by the vehicle manufacturer.
Pros and Cons
Everybody -- including us now -- is using “car warranty” incorrectly. The only car warranty that exists is the warranty your car came with when it was new. Everything else -- Literally everything else -- is a prepaid service plan. It’s not an “extended warranty,” no matter what these companies, or people like us who have to live by the vagaries of Google search optimization would like to call it.
With all that out of the way, what is a prepaid service plan? It’s a service contract, where you pay a monthly fee to avoid having to pay a huge bill if something really bad happens to your car when your original new car warranty runs out of time or mileage. Prepaid service plans will vary all over the place in terms of both time and mileage. Thinking of keeping your car to 120,000 miles? There are service plans out there that will cover you. Figure you’ll trade this car in at no more than 80,000 miles? You can find a service plan that will cover the gap between there and the end of your original warranty.
How these plans differ is the rules under which they’ll pay for a repair. Say your transmission falls out at 92,000 miles: Some of these plans are only affiliated with franchised new car dealerships, so you’ll have to have it towed to a dealer. Some plans will let you use any ASE-certified mechanic for a repair, so you can use the guy you like who happens to work out of a gas station in your town.
The plan that makes you use a dealership might seem like it’s at a disadvantage, but consider this: Those plans also require the repair to be performed by factory authorized technicians, using only OEM replacement parts. The plan that allows you to use your gas station guy might force him to select the cheapest replacement parts available, which you’ll be replacing again in a much shorter period of time.
That’s why reading the contract and understanding the advantages and disadvantages is so critical.
As with everything, it depends. If you’re driving something with an exceptional reputation for reliability, you probably shouldn’t spend the money. However, if you’re driving something dodgy, you should’ve bought that service contract already. What are you waiting for? Your electrical system has already consumed itself.
The best thing to do is spend some time researching your car’s (or your intended car’s) repair history. There are services like RepairPal and CarComplaints that can give you a good idea of the potential trouble issues. You also want to research the cost of specific repairs. Your car might be generally reliable but prone to failures of the Engine Control Unit, which might be particularly expensive for your model. You’d want to know that before you make a decision on whether to purchase a warranty or not.
We found a Dear Car Talk letter with Tom and Ray that we think does a great job summarizing how you should decide whether an extended warranty is worth the extra cash. Here it is:
Dear Tom and Ray:
We just picked up a new Fiat 500C, and we were pondering the lifetime warranty. Before the car hits 10,000 miles, we have to decide whether to buy it. The cost is around $3,000. Is something like this worth it? We would like to keep the car for 10-15 years. Cheers!
RAY: Generally speaking, extended warranties are not worth it. Why? Because if insurance companies didn't take in more money from premiums -- overall -- than they spent on repairs, they would stop selling the things.
TOM: But that doesn't mean it's not worth it to you. Maybe you're buying a car with unknown long-term reliability? Hint: You are.
RAY: Or maybe you're someone who sleeps better knowing for certain that you'll never get a call from the service manager telling you that the estimate for your new engine is $6,400.
TOM: But there are two variables to consider. The most important is the fine print.
RAY: What does this "lifetime warranty" actually cover? Is it a complete extension of the factory warranty? Is it just the powertrain? Does it cover body hardware and electrical issues? What, specifically, is excluded? "Wear items," like brakes and shocks?
TOM: What's the deductible? Are there conditions you have to meet to keep the warranty in force? For instance, do you have to get your car serviced regularly at the dealership? Do you have to keep written records of all of your services and oil changes?
RAY: If you don't feel capable of doing a "close read" of the warranty's fine print by yourself, then it's worth paying an independent mechanic you trust to read it and go over it with you. You want to know what is and isn't covered. Your mechanic also can talk to you about how often he sees the kinds of repairs that are covered, and how often he sees those that aren't.
TOM: Once you know what kind of warranty you're actually buying, then you can try to guess the likelihood that you'll spend $3,000 on those kinds of repairs in the years that you own your car.
RAY: Also keep in mind that the price of the warranty is negotiable. Like most "parts," an extended warranty is bought by the dealer at one price, and sold to you at a higher price -- sometimes double. So you often can negotiate a lower price.
TOM: But don't do anything until you understand what the warranty actually covers. It may be a great warranty, with a low deductible and very few exclusions or requirements. And it may help you sleep well for the next 15 years.
RAY: Or it may have more holes in it than my brother's favorite underwear. And you may decide you're better off buying a second Fiat 500C and just driving whichever one is working on a given day. Good luck, Karl.
The bottom line is this: A “Good” car warranty is one that clearly explains what it’s going to cover LONG before you need to use it. At this point, we’ve read about 93,397 complaints about car warranty companies in our research on this topic. The complaints about “bad” car warranty companies come in two categories: The first is “They won’t stop calling me.” The second is “I thought my timing belt was covered but it wasn’t.” Frankly, if you didn’t know what was covered in the warranty, you should never have signed the contract. That’s on you.
In general, we’d choose a warranty provider using factory trained technicians and OEM parts before we chose anything else. If you’re within the strict mileage and year of manufacture caps on some of these service plans, they offer a much better product, with repairs that are going to last longer than those using aftermarket parts.
The other thing a good car warranty provides is additional services when you’re out of town. About the worst thing that can happen is a major automotive failure when you’re on the road with your family, loaded with a week’s worth of luggage, on your way to a vacation. You want an extended warranty that is going to get you on the road as fast and as cheaply as humanly possible with things like towing assistance, rental car coverage and even lodging if you need to stay overnight before you hit the road again in the morning.
First, stop reading and go back to the top of the section above this one and read it again: What’s covered in a warranty is only what’s detailed in the contract. Read the contract. Then read it again.
You also need to understand that there are two main types of warranties offered in the industry. Exclusionary policies and inclusionary policies. It may appear that they offer similar coverage, but they do so in dramatically different ways. This is why it is of vital importance that you read your contract thoroughly.
An exclusionary policy lists the items that are NOT COVERED under the policy. Anything not listed under the list of exclusions is covered under that policy.
An inclusionary policy, sometimes referred to as listed-item coverage, works the exact opposite way. These policies provide a detailed listing of what is covered. If something is not listed specifically in the policy, it is not covered under that plan.
IN GENERAL, most warranty providers are going to offer several levels of service, and what’s covered in those levels of service varies wildly from plan to plan. A BASIC extended warranty will typically cover:
When you step up the ladder to more expensive plans, they pick up where the cheaper basic plan leaves off, covering things like:
Additional Hybrid and EV Components
At the risk of being repetitive: READ THE CONTRACT. It will detail exactly what’s not included in the plan. Also, remember the very significant difference between exclusionary and inclusionary policies. Exclusionary policies list what is NOT COVERED, while inclusionary policies list what IS COVERED. So, one more time, with feeling… Read your contract.
In general, there are categories of things that an extended warranty is never going to cover:
Aftermarket Parts: This may come as a shock, but your extended warranty provider is not responsible for covering the Wu Tang War Whistle turbo you bought off of Amazon Prime for $59.95. Read your contract about what it will cover. Some aftermarket items may be covered, but don’t bet on it.
Normal Wear Items: Tires, brakes, mufflers and windshield wipers are generally not part of the list of things an extended warranty is going to cover. That’s hugely problematic in 2021, when a set of factory 22-inch tires, brake rotors and pads can easily set you back $3,500. It stings even more when you’ve paid for a $3,500 warranty and you find out you’re still on the hook for 100 percent of the cost.
Hybrids and EVs: Make sure you read the contract carefully if you’re attempting to cover your EV or hybrid. A LOT of extended warranty providers exclude a lot of repairs on EVs and hybrids. Again, it’s good to look to the manufacturer who built these things for coverage. You may be surprised to find out that the hybrid or EV components of your vehicle have coverage from your manufacturer to as many as 150,000 miles.
“Exotic” Cars: Exotic is in quotes because most people don’t consider a BMW “exotic,” but quite a few extended warranty providers do. We researched one extended warranty provider that refused to cover anything from BMW, Audi, Jaguar, Land Rover, Porsche, Mercedes-Benz, or even some more expensive cars from American manufacturers, like the Corvette. That’s about 40 percent of the cars sold in the United States. Find somebody else.
Emissions-Related Parts: This seems like a negative, but it’s not unless you’re driving something much older with a ton of miles. The federal government makes manufacturers cover most of the expensive emissions-related parts until 100,000 miles.
Collision Repair: You’d be shocked at how many complaints we read from people who are mad that their extended warranty provider denied their smashed bumper cover. Wake up, people. An extended warranty isn’t a force field.
Ah, that’s the eternal question and we’re providing a slippery answer: It depends.
There are simply too many factors to nail down exactly what a service contract or extended warranty is going to cost. In the table, we’ve provided some sample costs from research we’ve done, but we can’t cover every single car, every single plan and all the variables that impact cost, like the length or mileage of the contract, or the mileage on the car. The cost to you depends entirely on a bunch of unique factors, like the age of your car, the make and model, the mileage, the reliability of it, and the actuarial tables used by the warranty providers to determine the probability of the life of your vehicle.
The greatest cost advantage you’ll realize is if you’re buying a service contract at the time you purchased a new car. In general, the company providing the service contract is going to be more likely to cut you a deal on a service contract if your original warranty is still in effect. They’re also more likely to be less expensive if you’re attempting to buy a service contract for a one-owner, low mileage vehicle than something that’s had more owners than your local newspaper.
If we looked at an average cost for a warranty, you’re looking at around $1,400. The thing to consider, though, is based on surveys from consumer groups, the average savings for repairs paid for with a service contract only amounts to about $900. In other words, if you end up getting more repairs paid for than you paid in service contract fees, you’re kind of a rarity.
One of the few providers of extended warranties who doesn’t hide their pricing like it’s the formula for Coca-Cola is Subaru. You can view what Subaru charges here. We suspect these prices are similar to what you’ll end up paying if you find a quality extended warranty product for a similar vehicle.
You’re going to read all kinds of nonsense elsewhere that will tell you that a warranty should cost around $1,500. If you can find a warranty that covers anything but a Toyota Corolla with zero miles for any more than two years and 24,000 miles, buy it. Most warranties are going to be WAY more expensive.
The staff and research team at Car Talk has now spoken with a good amount of players in the warranty industry. It appears that the average price across all categories, all make/models, all car types is roughly $3000. Again, this figure will depend on all the factors listed in the section above. Reliable cars will cost less, unreliable cars will cost more. Expect to pay significantly more if you are driving a luxury car, like an Infiniti or an Acura. Each provider has a number of plans, and payment options available, including monthly installments which make things easier on the consumer.
We took a look at what a bunch of random internet dopes told us they were quoted for a range of warranties, and whether or not they came with a deductible. There was ONE that was $2,000. All the rest were significantly more expensive. Warranties for cars like the BMW X5 are breathtakingly expensive, especially if you’re trying to buy one for a used car.
The biggest thing to consider when you think about buying an extended warranty is how much you could possibly cover if your car suffered a significant failure. According to the internet, half of Americans have less than $5,000 in liquid cash. A third of us have less than $1,000. As you can see in the “Cost of Service of a Modern Vehicle” section below. You can see that a thousand bucks doesn’t provide a lot of service if you really need it. But that’s not the only consideration when thinking about a service contract like this. You should ask yourself the following questions:
There are more questions to answer in our “Should I Get an Extended Warranty” infographic.
Obviously, you want to spend a lot of time looking at the fine print in any of these service contracts, and yes, cost should be a significant consideration. But there are three things that make several stands out above the others:
There are service contracts that we like that don’t fall into these categories, though, and we’re not saying they’re bad. In fact, there are very good reasons to purchase one:
Before you even begin to do your research on extended warranties, you should know if you are already covered.
The only warranty that’s an actual “warranty” is the written guarantee from the manufacturer that agrees to repair your car if one of its parts fails during a specific period of time and/or mileage. If you’re the original owner of a brand new car, you got one of those when you purchased it. You may have also had that original warranty transferred to you if you were the second owner of a car and bought it when the time and/or mileage of the original warranty hadn’t run out.
Those original warranties break down into a few different categories:
You will need to check with your manufacturer to know if your particular car is still covered by its original warranty. Pay particular attention to Hyundai, Kia, Genesis, and Mitsubishi. Each has an outstanding new vehicle warranty, but much of its duration only applies to the first original owner.
The only real “extended warranty” that comes from the manufacturer is the extension of coverage that comes if you purchase one of the cars it offers through a Certified Pre-Owned program.
Manufacturers like Lexus will extend the original Basic Coverage out to six years with unlimited mileage, which is pretty sweet if you drive a lot. It also throws in things like up to four factory recommended services in the span of two years or 20,000 miles.
Certified Pre-Owned vehicles cost more than ones that are the same but simply being sold as used. Consumer Reports looked at the premium one will pay for a certified vehicle versus that same model bought used without the CPO program being included. The premium for a CPO vehicle was $850 and the premium for a luxury vehicle included in a CPO program was $3,000. If you’re looking at used cars and you have the choice between a car with or without the Certified Pre-Owned stamp of approval with the extension of the original warranty coverage, the one with it is almost always the safer bet.
There was a time when most consumer watchdogs would never advocate purchasing a service contract. Back in the late 1980s and early 1990s, for example, cars were infinitely more reliable than they had been in the 1970s. Yet, they were still relatively simple machines; the only really expensive things that went wrong were the engine and the transmission, and they’d become reliable enough to make service contracts redundant.
It’s a different story in the modern era, though. Whether you purchase a car that was built in Japan, South Korea, England, Italy, Germany, or the United States, they are uniformly expensive to repair, and while the engine and transmission are still both expensive, some of the systems that monitor and regulate their performance are staggeringly costly to repair. If you own a car from the 2010s, it is the single most powerful computer you own. They can be unreliable, and they’re expensive to fix.
The computer network that makes your car operate is more complex than you can imagine. Your average Chrysler, for example, has 44 different computer modules that manage everything from the fuel/air ratio to the speed of the windshield wipers.
The cost to replace some of these modules can be as expensive as replacing a rear differential. Take a look at the cost of replacing the Engine Control Module for a vehicle as pedestrian as the Chrysler 300 with a 3.6-liter V-6. The part alone costs almost $700. Considering diagnostic time and labor to actually perform the replacement and you could easily be past $1,200.
Another good example is an auto stop/start technology. This feature was introduced as a means of scavenging a bit of extra fuel economy when the car was stuck in traffic and not actually moving. The idea is sound: Why spend money idling your fuel away when the car can automatically turn off and on in traffic?
You start running into problems, though, with how that system works. It seems simple enough. You turn your car off and on every day, right? The difference is that you turn your car off and on when the gear shift is in “PARK.” Auto stop-start does it when the vehicle is in “DRIVE,” something that was expressly forbidden in the owner’s manual in cars since the advent of the automatic transmission. To make auto stop/start work, pressure has to be maintained in the transmission’s hydraulic system. That requires an additional electric pump. In the case of a lot of vehicles, that pump is housed within the transmission. If it fails, it means the transmission needs to be removed and serviced, something that nobody ever wants to have to pay for.
The list of Very Expensive Technology You Do Not Want to Pay For if it Fails is getting longer by the day. Radar-guided cruise control, lane-keeping assist, automatic emergency braking, cross-traffic alert: all of these technologies are great and are hard at work saving lives, but the expense of keeping them working long after the original basic warranty has expired is something you don’t want to have to take on. Depending on the level of coverage you purchase, all of that stuff can be covered. But what about the run-of-the mill repairs we all have to deal with on a regular basis? What does it cost to repair that? Is it covered by an extended warranty? Let’s take a look at the ten most frequent routine repairs:
|Repair||Is it Covered?||Cost including labor|
Take a look at this list, and really pay attention to the stuff that isn’t covered. It would feel pretty lousy to spend $1,400 to $2,500 for an extended warranty, and still be facing a bill for $2,200 for brakes and tires, right?
We’re fans of extended warranties that are offered by the same company that manufactures the car. Mopar Vehicle Protection, for example, is a product of the same company that produces your Chrysler, Jeep, Dodge, RAM, Fiat, or Alfa Romeo vehicle. It’s more tailored to those specific vehicles. Those are a better choice than the less familiar brands that purport to have warranties for all brands.
On average, probably not. Most people end up saving less than a plan would cost. But that’s the average. There are a lot of people running around with ultra-reliable cars like Honda Accords and Toyota Camrys that buy extended warranty coverage and never use it. Then there are people who buy extended warranties on their Infiniti and end up saving more than the vehicle was worth in the first place.
On average, an extended warranty will run between $1,200 and $1,500. That price will go up the longer you want coverage, or the smaller deductible you choose.
Yes, AAA does offer extended car warranties in some areas. However, each local club determines the offering, so start with your local chapter for details.
Yes you can, and it’s sometimes an advantage to do so. You can roll the cost into your monthly payment if you’d rather not pay for it separately.
Yes, depending on the mileage and how old the car is. Usually, those mileage caps tend to kick in around 100,000 miles, and the vehicle typically needs to be less than eight years old. See Car Talk's top recommendations for Best Used Car Warranties here.
Although not a direct provider, CarShield does a great job of building awareness about its brokerage services. The Better Business Bureau, however, advises caution when considering doing business with CarShield and even gives them an F rating, so we'd recommend reviewing our checklist of how to find a reputable car warranty company.
It totally depends on the contract. Some service contracts require that you have your car repaired at franchised dealerships. Others say you can get the car repaired anywhere, but require a lot of phone calls ahead of time on the part of the garage so that the cost of repair can be pre-approved. Every extended warranty is different, so read the fine print.
That’s fantastic. It will cover your vehicle at no cost because that warranty was provided by the original manufacturer. But that warranty typically runs out in three or four years. Extended warranties and service contracts provide coverage after the original warranty has expired.
In general terms, an extended car warranty is going to cost between $800 and $1,000 that covers most major components with a $100 deductible on a new or a low-mileage used car.
Vehicle owners who would have their monthly budget upset by a large vehicle repair cost may find CarSheild a good value. Also, owners of vehicles with known problems may also benefit.
Our research shows that a plan typically costs buyers $129.99 per month, but that available discounts can drop that price to as low as $100 per month. The cost for your own coverage will vary depending on many factors, so make certain to get a quote that is specific to you.
The best way to get a good price is to compare offers. These are some popular options...