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Pros and Cons of Extended Car Warranties (2020)

  • Extended auto warranties can put money back in your pocket when it comes to expensive repairs.
  • Extended warranties can also be an extraneous payment for those who don’t need the extra coverage.
  • Follow along as we discuss the pros and cons of extended car warranties.

Affiliate disclosure: Automoblog and its partners may be compensated when you purchase the products below.

Car repairs can be expensive and burdensome, but so can the price tag on an extended warranty. Read on to weigh the pros and cons of extended car warranties for your vehicle before you make a decision on coverage.

If an extended warranty is worth it for you, make sure to research different warranty companies, including coverage and cost. To remove the guesswork, our team has reviewed the best extended warranty companies in the industry and ranked them on factors like coverage, value, industry standing, and customer service. Get a few free, personalized quotes to find the right protection for your vehicle.

Top Extended Warranty Companies
We reviewed the best extended auto warranty providers, and here are our top picks. 
Best Direct Coverage Best for Older Vehicles Best Prices
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Endurance CARCHEX CarShield
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(877) 374-1840 (866) 254-0205 (800) 563-2761
     

Extended Car Warranty Overview

When you own a vehicle that you want to protect for many miles, it’s smart to consider extended warranties. The choice comes down to two main factors: how long you intend to keep your car around and how much you’re willing to pay for repairs.

Here are a few of the pros and cons of extended car warranties. We get into more detail on each item below.

Pros Cons
Vehicle longevity Chance you won’t need the coverage
Savings on costly repairs Exclusions and limitations
Customizable coverage Waiting periods

What Are the Pros of Extended Car Warranties?

Pro: Drive your car for longer.

Interested in keeping your car for a long time? Investing in an extended car warranty might be the best path to take. Expensive repairs can discourage you from driving a car you love, especially if those repairs interfere with the car’s safety. But, it’s almost always more cost-effective to repair your car than buy a new one. Vehicle longevity is an important consideration when looking at the pros and cons of extended car warranties.

You might also want to consider your driving habits. Do you often find yourself in a repair shop because of flat tires or transmission issues? Repeated car troubles can add up quickly and push you to think of selling your vehicle. If you’re able to fit the bill for monthly payments, extended warranties can give you peace of mind when on the road.

Pro: Put money back in your pocket when it comes to repairs.

According to AAA, drivers can expect to pay between $500 and $600 on the average repair bill. Additionally, AAA’s studies show that annual repair costs increased by 8.9 percent between 2018 and 2019. With increasingly technologically advanced vehicles, repairs not only stem from mechanical issues like water pumps and flat tires but also computer systems. When electing to buy an extended warranty, consider your car’s sophistication and make sure you’re choosing the right warranty.

The same applies for older, used vehicles. A used car warranty can offset the price of frequent maintenance issues that occur that aren’t often covered by the factory warranty due to age. 

Pro: Choose the coverage you need.

What repairs do you find yourself paying for repeatedly? What wasn’t covered in your factory warranty that you might need later on? These are two questions to reflect on when considering the pros and cons of extended car warranties. Warranty companies provide a variety of customizable plans to tailor to your needs, including bumper-to-bumper and powertrain warranties.

If you’re the owner of an older vehicle, extended warranties for cars over 100K miles can provide you with the coverage you might not get otherwise. Frequent travelers will find that most companies provide roadside assistance and towing services, and some offer trip interruption protection.

What Are the Cons of Extended Car Warranties?

Con: Paying for repairs outright might cost less than a warranty.

On average, extended car warranties cost around $750 a year if not more with more inclusive coverage plans or plans for older vehicles. While extended warranties may initially save money on your repair bill, it’s smart to consider their long-term cost when weighing your options.

First, think about the reliability of your vehicle. If you don’t find yourself in repair shops frequently, you might skip the extended warranty. At the same time, if your vehicle make and model is known for having expensive repairs, you may have just gotten lucky up until now.

Those that do decide to purchase an extended warranty should negotiate with the dealer to secure the best price or choose a third-party company that’s known for its value.

Con: There are limitations with your extended warranty coverage.

A definite con of extended car warranties is their exclusion lists. Equally important to what’s included in your coverage plan is what is excluded. According to Edmunds.com, “Many wear-and-tear parts – items that will eventually break or wear out – are not covered by most vehicle extended warranties.” When weighing out the pros and cons of extended car warranties, make sure you know what your coverage will include.

You should also think about coverage tiers. Each tier includes its own cost and set of exclusions. Take the time to find out what level of coverage is right for you.

Con: You will probably wait for your coverage to kick in.

Because extended warranties don’t cover pre-existing issues, waiting periods are put in place to make sure your vehicle is working correctly before your coverage begins. This means extended warranties don’t cover your vehicle for the initial 30 days, and/or 1,000 miles, after purchase. If you’re expecting to be covered immediately with an extended auto warranty, think again.

Top Recommendations for Extended Car Warranties

After reading about the pros and cons of extended car warranties, you might be ready to purchase one. It’s always smart to get quotes from more than one provider when deciding on extended protection. Below, we’ve included our top two providers to kick-start your research. 

Endurance: Best Direct Coverage

Awarded a 5.0-star rating and our pick for Best Direct Coverage, Endurance performs very well across the board. Available in every state except California, the company is known for its highly regarded affordability and inclusive coverage plans for vehicles up to 200,000 miles.

Read more in our full Endurance review, and get a free, personalized quote to see how much you would pay for coverage.

Best Direct Coverage

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(877) 374-1840

Industry veteran that handles your plan directly, from quote to claim

CARCHEX: Best for Older Vehicles

Also awarded a 5.0-star rating by our review team, CARCHEX is the go-to choice for older vehicles. CARCHEX has an A+ rating from Better Business Bureau for its industry standing, and it offers five levels of coverage for vehicles up to 250,000 miles. The company also has roadside assistance and towing services.

For more information, read our comprehensive CARCHEX review and get a free quote for your vehicle.

Best for Older Vehicles

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Get Quote

(866) 254-0205

Top-rated provider with unmatched customer service and affordable coverage

FAQ: Pros and Cons of Extended Car Warranties

Are extended car warranties a good idea?

Extended car warranties are a good idea for many drivers. If you want to save on costly repairs by paying a small monthly fee instead, an extended warranty can be a good investment. On the other hand, if you don’t mind paying for repairs out of pocket, you may not need the coverage.

What is a good price for an extended car warranty?

Based on our research, extended car warranty prices average around $2,800. A good price to look for would be around this cost or lower.

Remember, warranty prices can fluctuate based on:

  • Your deductible 
  • Your vehicle type
  • The provider you choose
  • The condition of your vehicle
  • The coverage you want to buy

Because of the many factors that affect extended car warranty price, it’s best to get a quote directly from the provider.

Why have an extended car warranty?

With a looming factory warranty expiration in sight, an extended car warranty can ease fears about paying for repair costs out of pocket.

Each new vehicle purchase includes a limited factory warranty, usually spanning three years, or around 36,000 miles. This initial coverage generally includes all vehicle repairs aside from wear-and-tear features like tires and brake pads. When the factory warranty expires, extended warranties can maintain, if not increase, the amount of coverage you have on your vehicle.

Make sure to consider all the pros and cons of extended car warranties before making a commitment to a dealership or warranty company.

Who has the best extended car warranty?

Endurance and CARCHEX are two of the best extended car warranty providers in the industry. Both earned high ratings in affordability, coverage, and customer service from our review team.

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