Extended car warranties provide additional coverage for your vehicle after the manufacturer’s warranty has expired. These warranties can protect you if something is damaged or breaks down on your vehicle and help pay for expensive repairs. However, extended warranties also come with a cost and, depending on the nature of the damage, may not cover your repairs.
Read on to learn more about extended car warranties, how they work, and the benefits and drawbacks to consider before you buy coverage.
What Is an Extended Warranty?
An extended car warranty, also known as a vehicle service contract, is a contract between you and a warranty provider where the warranty company agrees to cover the cost of certain repairs to your car if things break down or are damaged. Warranties provide added protection against unexpected mechanical failures and repairs, taking effect after a traditional manufacturer’s warranty expires.
Unlike a manufacturer’s warranty, an extended car warranty can cover expenses beyond defects in materials or workmanship, including certain wear and tear. With an extended car warranty, you can avoid costly repair bills and maintain your vehicle’s performance and value.
What Does an Extended Warranty Cover?
Extended car warranties come in varying shapes and sizes, with each covering different parts of a car, types of damage or categories of repairs. Some of the most common things covered under extended warranties include engine and transmission components, electrical and climate control systems, fuel injection and ignition systems, and braking systems.
Here are some of the things commonly covered by extended car warranties:
- Engine and transmission components
- Electrical and climate control systems
- Fuel injection and ignition systems
- Brakes
- Certain defects in materials and workmanship
- Certain wear and tear
- Mechanical failures
- Repairs due to manufacturer defects
- Replacement parts for repairs
- Labor costs associated with repairs
- Diagnostic fees for identifying the source of an issue
Some extended warranties also offer roadside assistance (including tire changes and jump starts), rental car reimbursem*nt and towing services. Before you buy a warranty, evaluate the specific coverages and limitations so you can know exactly what you’re protected against and how. Always read the fine print to learn about coverage limits or exclusions, and consider the cost and benefits of a warranty before making a purchase.
Where to Get an Extended Car Warranty
There are two different ways to get an extended warranty for your vehicle. The first is to purchase extended coverage through the dealership where you bought your car. The second is to go through a third-party provider. It’s important to understand the differences between these options as they can have a significant impact on both cost and coverage.
While dealership warranties tend to be more expensive, they often offer more comprehensive coverage and may also have fewer but more reputable service options. Third-party providers, on the other hand, are often more affordable but may have more limited coverage options and possibly less reliable customer service.That said, the best car warranty companies offer robust coverage with responsive customer support and 24/7 roadside assistance.
Ultimately, when deciding on an extended warranty from a dealership as opposed to a third party, check to see whether your vehicle is eligible for a dealer warranty. Also consider your budget, desired coverages and whether you prefer to have your vehicle serviced at a dealership or at a repair shop you choose.
Types of Extended Warranties
There are several types of extended car warranties, each with its own combination of coverage types and amounts. The most common types of extended car warranties include drivetrain, powertrain and bumper-to-bumper coverage. However, there are other types of coverage that may be helpful.
Before you buy a warranty, make sure you understand the different types of coverage and how they’re used, so you can decide what warranty is best for you. The best extended car warranty plans offer robust and flexible coverage that meets your needs as a driver.
Bumper-to-bumper warranty
A bumper-to-bumper warranty is the most comprehensive type of coverage available through an extended car warranty. It covers nearly every component of a vehicle, including electrical systems, heating and cooling and even the audio system. Essentially, it provides near-total protection for the vehicle.
A bumper-to-bumper warranty is a great option if you don’t want to worry about any type of repairs during the life of your warranty. If you’re planning to keep your car for a long time, bumper-to-bumper coverage can help you keep your entire vehicle in good working order and hopefully keep it from depreciating quickly.
However, it’s also important to consider the cost of coverage before you buy, as a bumper-to-bumper warranty is generally more expensive than other types of extended warranties.
Powertrain warranty
A powertrain extended warranty covers the parts of your car that make it move, including the engine, transmission and driveshaft. This additional coverage can be helpful if you use your vehicle every day or are less concerned with nonessential components like cooling or audio.
Powertrain coverage is especially valuable if you have an older car, you put a lot of miles on your car each year or you plan to keep it for an extended period of time. By buying an extended powertrain warranty, you can protect yourself against any large unexpected repair costs if something breaks in one of your car’s most critical components.
Drivetrain warranty
A drivetrain extended warranty is another type of protection plan that covers specific components of your vehicle’s drivetrain. These components include the transmission, differentials and driveshaft — essentially everything included in a powertrain warranty except for the engine.
With a drivetrain warranty, you can save some money relative to powertrain coverage while still enjoying many of the same protections. This type of warranty is ideal if you’re on a budget and rely on your vehicles for work or travel, or if you have a higher risk of encountering mechanical issues due to driving habits or mileage.
Wrap warranty
A wrap extended warranty is a type of protection plan that extends beyond a manufacturer’s warranty and covers additional components beyond the basic powertrain coverage. These components typically include the engine, transmission, fuel delivery system, heating and cooling, steering and suspension systems.
A wrap extended warranty can protect you against unexpected expensive repair bills. However, if your car is relatively new or is still covered by the original factory warranty, it may not be necessary. Instead, buying a wrap extended warranty is best if you have an older car or if you put a lot of miles on your car each year.
Corrosion warranty
An extended corrosion warranty covers the costs of repairing or replacing parts due to corrosion or rust-related damage. The warranty typically includes repairs for items like electronics, motors, hydraulics, engine blocks and exhaust manifolds. If you use your vehicle for work in harsh environments that are prone to corrosion, such as oil and gas, construction, marine or transportation, a corrosion warranty may be a good way to extend the life of your car and maintain its value.
What Is Not Covered Under an Extended Warranty?
Extended car warranties protect you from repair bills related to many types of breakdowns in your car’s critical systems. However, like any other type of coverage, extended warranties don’t cover everything. All warranties have exclusions and coverage limits. Here are a few things that are commonly excluded from warranty coverage:
- Certain damage due to normal wear and tear
- Damage caused by improper installation or use
- Repairs performed by unauthorized personnel
- Preexisting conditions or damage prior to warranty purchase
- Cosmetic damage, including scratches and dents
- Damage caused by acts of nature, such as floods, fire or earthquakes
- Mechanical breakdowns resulting from abuse or neglect
- Liability for loss of use, inconvenience, penalties or other economic losses
- Parts not original manufacturer parts for the vehicle’s make and model
How Much Does an Extended Warranty Cost?
Extended car warranties can cost anywhere from $1,300 to $4,000 or more. However, the cost of an extended car warranty depends on a number of factors, including the type of vehicle you own, its age and whether you purchase the warranty from the dealer. Additionally, the cost of a warranty is also affected by whether you buy the warranty at the time you purchase the car or at a later date, the type of coverage you choose, coverage limits and exclusions.
Pros and Cons of Extended Warranties
Extended warranties can provide valuable protection against unexpected repair costs. However, it’s important to carefully consider the cost and duration of any extended warranty before making a purchase to ensure it’s the right choice for you. These are the pros and cons of getting an extended warranty for your vehicle:
Pros of an extended warranty
- Lower repair costs: Extended car warranties provide coverage for necessary repairs that would otherwise lead to high out-of-pocket expenses.
- Long-term peace of mind: Buying a warranty can provide valuable protection and decrease the stress and worry that come with car ownership — especially if you don’t have the money to cover large unexpected repairs.
- Coverage for specific components: Some warranties cover components beyond the basic powertrain coverage, giving you more comprehensive protection against costly repair bills.
- Protection-specific types of damage: Warranties that include coverage for things like corrosion protect your vehicle from damage caused by rust or other corrosive elements. This helps you keep your car in good condition and running reliably so you can use it to get to and from work.
Cons of an extended warranty
- Added cost: Extended car warranties come at a price. Some require an additional payment when you buy your car, while others require monthly or annual premiums to keep your coverage active.
- Limited coverage: Extended warranties don’t cover all types of damage, nor do they always cover all of your car’s components. Improper use, preexisting damage, and even normal wear and tear may be excluded, depending on the coverage you buy.
- Loss of use may not be covered: Not all warranties include coverage for a rental car or other transportation fees in the event of an extended repair time. In some cases, you may have to pay those costs out of pocket.
- Complex claims process: Depending on where you live, what provider you work with and the type of coverage you buy, filing a claim under your extended warranty can be complicated and time-consuming — and depending on the nature of the damage and repair work, it may not be covered.
Is an Extended Car Warranty Worth It?
Whether a warranty is worthwhile depends largely on your individual circ*mstances, including your finances, what type of car you drive, how you use the vehicle and how long you plan to keep it. If you have a newer model car that you plan to keep for a long time, an extended warranty may be a good idea. Likewise, a warranty may be worth the money if you rely on your car to get to and from work and are unable to afford large unexpected repairs.
However, if you have an older car that already has damage, or if you work from home and only use your car occasionally, it may not be worth paying the cost of coverage. Still, there are many benefits for high-mileage vehicles.
Check out the best used car warranty companies to find coverage that meets your needs.
Extended Car Warranty FAQ
Is it hard to cancel your extended car warranty?
If you buy an extended car warranty and decide you no longer want coverage, it’s usually possible to cancel. To cancel your warranty, you’ll need to follow instructions from the warranty provider. This process varies by provider and by warranty type, but it may include downloading and completing a form. Alternatively, you may also be able to wait until the end of the warranty and simply not renew coverage.
What voids an extended warranty?
Depending on the type of warranty you buy and the issuer, there are many things that can void your warranty. These include misusing or neglecting the vehicle and making improper modifications or installing some aftermarket parts that can affect the car’s operation. Tampering with your vehicle’s odometer can also cause your warranty to be voided. Additionally, if your vehicle is damaged by a fire, flood, earthquake or hail, your warranty company may refuse to cover the damage.
Are bumper-to-bumper warranties worth it?
Whether a bumper-to-bumper warranty is worth it depends on your budget and circ*mstances. Bumper-to-bumper warranties can provide significant protection against unexpected repair costs, providing peace of mind and potentially saving you money in the long run. However, it’s important to balance the cost of coverage against the likelihood you’ll need it. If you want extra protection against expensive repairs, you may find that a bumper-to-bumper warranty is worth the cost; if you have a newer vehicle or don’t drive much, you may not need one.
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