Extended auto warranties are a way to offset repair costs and provide peace of mind.
With so many providers and contract options, it’s hard to know what to look for when purchasing an extended warranty for a used car.
Read our shopping tips, then see our top six used car warranty picks, including our top choice CARCHEX.
Affiliate disclosure: Automoblog and its partners may be compensated when you purchase the products below.
When you buy a used car, you may not know the whole story about its current condition. An extended warranty may be your best hope for keeping repair costs low.
After our comparison of six of the best used car warranty companies, we’ll walk you through the ins and outs of getting an extended warranty for a used car to help you make the best decision for your car.
Top Used Car Warranty Companies
We reviewed 6 extended warranty providers, and here are our top 3 picks.
Owners of older cars are twice as likely to spend more than $1,000 on maintenance and repairs, according to the NPD group. Cars are lasting longer, including used cars, and the global aftermarket industry is projected to grow to $1 trillion by 2022.
It’s no wonder there are so many extended auto warranty companies. It can be hard to navigate all of them, but we picked six well-known used car warranty companies and compared their strengths and weaknesses.
Finding The Best Extended Warranty For Your Used Car
There are three types of car warranties you’ll come across in your search.
The worst case scenario when buying a used car is that it doesn’t even make it through the drive home. One of the most basic forms of a car warranty is one covered by the dealership. These usually cover limited repairs, and coverage ends within a few months or years after the purchase or a certain mileage.
A manufacturer’s warranty or factory warranty comes at no additional cost with the purchase of a new car, and it covers repairs and replacements due to faulty factory materials or workmanship. Many of these warranties are transferable to a subsequent owner.
On the other hand, an extended manufacturer’s warranty or service contract offers continued coverage at an extra cost. Be aware that while coverage is usually comprehensive, these warranties tend to be more expensive than warranties from third parties.
This type of extended auto warranty can be administered by a broker or a company that directly handles repairs. A broker will help you choose a coverage plan that we normally see backed by an insurance company. In other words, the broker itself is just an intermediary.
Because independent extended car warranty companies are not highly regulated, their reliability varies. Some companies have the financial responsibility to meet claims and others do not, according to the South Carolina Bar, so you should check the Better Business Bureau for ratings and customer complaints.
Used Car Coverage Options
Before you decide on a coverage plan for your used vehicle, you should have a local repair shop do a health check. You’ll learn about any warning signs or weaknesses that could leave you stranded on the side of the road in the future. Plus, you’ll gain better insight into the level of coverage you need.
There are several types of vehicle service contracts, but most companies focus on these few:
Powertrain/Drivetrain: This warranty covers the engine, transmission, and related components. Powertrain warranties are normally less expensive, as they don’t include electrical systems, braking systems, heating/cooling, etc. They tend to last five years or 60,000 miles on average.
Powertrain Plus: This common type of plan includes powertrain coverage and additional components, such as air conditioning, electrical systems, and fuel delivery systems. It’s still a step below full coverage.
Bumper to Bumper: Sometimes called exclusionary plans, you’ll get a short list of components that are not covered rather than a list of items that are covered. It’s closest to the full coverage offered by many manufacturers. Though more expensive, this protection can be the difference between a small deductible and a costly repair.
Always read the contract before making a decision so that you don’t fall victim to certain limitations. Vehicle service contracts often have the following exclusions and limitations:
Limited choices for local repair shops.
Items like brake pads, tires, wiper blades, etc.
Ineligibility for owners who fail to perform regularly scheduled maintenance.
Repairs due to normal wear and tear (covers only a mechanical breakdown) or pre-existing conditions.
What To Look For In A Warranty
If you believe buying an extended auto warranty will help you breathe a bit easier, then you should know the criteria for a good coverage plan.
What should you look for in the best used car warranties?
Search a company’s BBB rating to gauge trustworthiness or see common customer complaints.
Service contracts underwritten by insurance companies are more reliable, so stick to those. Insurance regulations require companies to maintain enough financial reserve to pay your claim.
Is there a mileage limit on the contract? Some companies provide coverage for high mileage vehicles – protection your used vehicle probably requires.
Find a service contract that pays for the repairs up front rather than reimbursing you later. Reimbursement could take months in some cases.
Look for a service contract with low deductibles, especially if a deductible is required for each repair. Your repair should cost more than the deductible.
Roadside assistance and related services are included in most extended warranty plans. Make sure these perks are part of your contract.
Some extended warranty companies do not allow you to choose your own repair facility. Companies that offer more flexibility are a better option.
These are all important factors to consider during your research. Don’t allow price to be your only driving factor when buying an extended auto warranty.
What To Avoid When Buying An Extended Auto Warranty
Just as there are many features to look for in a service contract, there are also red flags to avoid. It can be costly to succumb to the pressure of buying an extended warranty right away.
Avoid these warning signs and drawbacks:
Warranties that are non-transferable.
Sample contracts that aren’t readily available.
Pressure to buy coverage immediately over the phone.
Contracts that don’t explicitly explain the claim process.
Contracts that don’t allow cancellations or typical 30-day refunds.
No choice of repair facility or extreme limits when away from home.
Lack of roadside assistance, rental reimbursement, travel interruption service, or towing reimbursement.
Deceitful coverage (e.g. something that covers the engine yet excludes most of its internally-lubricated items).
Remember: the most important thing you can do is read the entire contract.
The Best Used Car Warranty Companies:
CARCHEX: Best Overall
autopom!: Best Quotes and Claims Process
Endurance: Best Direct Provider
AA Auto Protection: Most Years In Business
Concord Auto Protect
Protect My Car
While CARCHEX is our top recommendation, we do encourage you to consider the other providers and to get quotes to make it easier to compare. Some providers may be able to provide better coverage at a better price, depending on the age, make, and model of your car.
Why CARCHEX Is Our No. 1 Used Car Warranty Company
After reviewing CARCHEX‘s plans and ratings, we think that the provider is a trustworthy and reputable extended auto warranty company. Their customer service – a 99 percent BBB rating – is one of the main reasons they continue to dominate in the industry.
Not only will you save money on expensive car repairs, you’ll also receive these benefits:
Diagnostic fee coverage.
30-day money back guarantee.
Customer experience above all promise.
Direct payment to repair shops (no waiting for reimbursement).
24/7 roadside assistance, travel interruption service, towing, and rental car reimbursement.
Network of 30,000 mechanics and flexibility to use smaller repair shops or large chain facilities.
Get A Free Used Car Warranty Quote
With CARCHEX, you can speak to a used auto warranty and insurance expert over the phone to answer your questions and get a free quote that’s customized to your budget, driving habits, and vehicle. This used car warranty company promises a No-Haggle, Low-Price, Everyday Guarantee™, so you can expect to get the lowest price available without having to negotiate.
Top-rated provider with unmatched customer service and affordable coverage
Q&A: Used Car Warranty Companies
Q: What’s the cost of an extended warranty?
A: An extended car warranty can cost from $300 to over $1,000.
Q: Will my warranty coverage start right away?
A: Most extended warranties do not start until after 30 days or a certain number of miles (usually 3,000).
Q: How do I know if the used car I want to purchase already has a warranty?
A: When purchasing a used car from a dealership, you will typically find a Buyer’s Guide sticker on the car. This guide will tell you whether the vehicle is covered by a warranty or if it’s being sold “as is.”
Q: What is an aftermarket warranty?
A: An aftermarket warranty is from a third -party company. These warranties do not always use Original Equipment Manufacturer (OEM) parts. This shouldn’t have any serious effects, but it isn’t always ideal to have parts that are not specifically made for your car.
Q: Is AA Auto Protection part of AAA?
A: No. They are separate companies that offer different vehicle services.
Q: What is the difference between a certified pre-owned vehicle (CPO) and one that’s not?
A: A CPO vehicle is likely to come with a manufacturer’s warranty and a pre-inspection. You will pay a premium for these used vehicles over a non-certified used vehicle.