extended auto warranty

What Is an Extended Car Warranty? (2021)

  • An extended auto warranty is a worthwhile investment for some drivers.
  • Consider your vehicle reliability, auto budget, and existing coverage when shopping for an extended warranty.
  • Our top picks for coverage are Endurance, CARCHEX, and CarShield.

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

An extended auto warranty is one way to protect your vehicle long-term. Like your vehicle’s factory warranty, an extended car warranty protects you from having to shell out for expensive repair costs after a breakdown. However, there are some pros and cons of extended car warranties that you should be aware of before committing to a contract.

In this article, we’ll discuss extended vehicle warranties in depth, including what they cover, how much they cost, and whether they’re really worth the investment. We’ll also go over which drivers would benefit from additional coverage and who is better off paying for repairs out of pocket.

Our review team researched and ranked the best extended car warranty providers on the market. If you’re beginning to research providers and need a good place to start, click below to receive free, no-obligation quotes from our top three picks.

Featured Extended Warranty Companies
We reviewed the industry’s top extended auto warranty providers, and here are our featured picks. 
Best Overall Best for Used Cars Low-Cost Plans
logo endurance logo auto logo e1623893416319
Endurance CARCHEX Select Auto Protect
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(866) 990-3410 (866) 950-7122 (860) 294-4933
     

What Is an Extended Auto Warranty?

An extended auto warranty, also called an extended car warranty or vehicle service contract, pays for certain repairs after a vehicle’s factory warranty expires. Unlike auto insurance, an extended warranty covers repairs due to defective or malfunctioning parts, not damages caused by an accident or collision.

Contract holders usually pay a deductible at the repair facility and a lump sum or monthly payment for the extended warranty.

Extended auto warranties come in a variety of coverage levels but are commonly referred to in terms of powertrain warranty coverage and bumper-to-bumper warranty coverage. Powertrain coverage protects the components that make the vehicle move: the engine, transmission, transaxle, and transfer case. Bumper-to-bumper coverage is exclusionary, which means it covers virtually all mechanical and electrical parts except those explicitly listed as exclusions in your contract. All extended auto warranties include protections at or between these two types of coverage.

Depending on the extended car warranty you purchase, you’ll also be eligible for a few additional perks, which usually include:

  • Towing to the nearest authorized repair shop
  • Rental car reimbursement while your car is in the shop for a covered repair
  • Roadside assistance including lockout services, battery jump-starts, fuel deliveries, and more
  • Trip interruption reimbursement if you break down a certain number of miles from your home and need to stay the night while your vehicle is repaired

However, the time and cost limitations of these benefits will depend on the contract. For example, some companies offer $50 per day for a rental car, while others only reimburse up to $35 per day.

What Does an Extended Auto Warranty Not Cover?

Extended car warranties are only intended to cover defective parts and materials, meaning that some parts and damages will not be protected. Exclusions usually include:

  • Glass
  • Wheels and tires
  • Environmental damage
  • Non-factory-installed parts
  • Any alterations or modifications
  • Damage caused by misuse or abuse
  • Normal routine maintenance services
  • Damage caused by racing or competition
  • Upholstery, bumpers, exterior paneling, and trim
  • Wear-and-tear parts like wiper blades, belts, and hoses

Also, check with your extended auto warranty provider for any contract-specific exclusions.

How Much Do Extended Auto Warranties Cost?

Based on our data, extended auto warranty plans cost between $1,300 and $4,600 on average. This average includes contracts ranging from three to seven years. There are a few factors that affect coverage costs, including the coverage level you choose, your vehicle type, your warranty provider, and more.

Below, we explain what can increase or decrease the price of extended auto warranty coverage.

  • Existing coverage: Vehicles currently under warranty are less expensive to cover.
  • Deductible: Usually, a higher deductible leads to a lower overall extended auto warranty cost.
  • Coverage level and length: More comprehensive contracts, like exclusionary bumper-to-bumper warranties, and lengthier term limits are often more costly.
  • Vehicle type: Older, less reliable, and luxury vehicles tend to have higher warranty costs, as they tend to break down more often or require more expensive repairs.
  • Provider: Often, independent warranty providers offer more affordable contracts than vehicle manufacturers. While third-party coverage is more generalized, the increased competition between companies makes their extended auto warranties cheaper.

To give you a good idea of what an extended auto warranty may cost, here are several bumper-to-bumper contract quotes for a 2018 Toyota Camry with 28,000 miles from three of our top recommended providers.

Extended Auto Warranty Provider Plan Name Term Length Deductible Total Cost
Endurance Supreme 5 years/100,000 miles $100 $2,732.89
CARCHEX Titanium 5 years/100,000 miles $100 $2,451.06
CarShield Diamond 5 years/100,000 miles $100 $1,794.04

Are Extended Auto Warranties Worth It?

An extended auto warranty’s cost-effectiveness varies from driver to driver. If you own a reliable car with a long-lasting factory warranty, you may not need to invest in additional coverage. However, many drivers may still want the peace of mind additional coverage offers or feel more comfortable paying a set cost for repairs upfront. Below, we’ve outlined a few questions to consider when shopping for an extended auto warranty.

Can you afford out-of-pocket repair costs? Depending on your vehicle’s annual repair costs, it may be best to set aside money for your auto budget rather than pay for an extended auto warranty. To estimate how much you may need to budget per year for auto repairs, you can check sites like RepairPal. 

Here are a few average annual repair costs for popular models according to RepairPal.

  • Kia: $474
  • Ford: $775
  • Audi: $987
  • BMW: $968
  • Lexus: $551
  • Toyota: $441
  • Hyundai: $468

If you own a Ford, it’s likely you’ll be able to purchase a vehicle protection plan that will cost you less than $775 per year. However, Toyota drivers may be better off paying for repairs as they arise. If you go this route, make sure you have money set aside for repairs in an emergency vehicle fund, and don’t dip into it throughout the year.

How long will you own your vehicle? If you don’t plan on owning your vehicle past the factory warranty’s expiration date, there is little sense in buying an extended auto warranty. You don’t need to pay for coverage you will never use.

How reliable is your vehicle? As mentioned above, drivers with highly reliable cars may not need the extra coverage. However, it can be hard to know your vehicle’s reliability in the long term, especially if it’s new. Using data from RepairPal, here is how the site rates those same popular models on a 5.0-star scale:

  • Kia: 4.0
  • Ford: 3.5 
  • Audi: 3.0
  • BMW: 2.5
  • Lexus: 4.0 
  • Toyota: 4.0 
  • Hyundai: 4.0

What coverage do you already have? If you already have long-lasting and comprehensive factory warranty coverage, you may not need an extended auto warranty. However, if your original warranty is on the short side or doesn’t cover as many components as you’d like, consider the extra coverage.

Manufacturer Vs. Third-Party Extended Car Warranties

If you want to buy an extended auto warranty for your vehicle, you may be wondering where to start searching for the best plan. There are two main options for where to purchase coverage: from the manufacturer or from an independent warranty company. There are pros and cons with either option, which we’ve outlined below.

Manufacturer’s Extended Auto Warranty Third-Party Extended Auto Warranty
Often need to buy before the factory warranty expires or
at the time of the vehicle’s purchase
Can be purchased at any time, so long as your vehicle meets the company’s eligibility criteria
Vehicle-specific coverage More general coverage
Repairs guaranteed to be made by factory-trained technicians using genuine parts Repairs may be made by factory-trained technicians using genuine parts, but it’s not guaranteed
Often need to take vehicle into a dealership for repair work Vehicle can be taken to any licensed repair shop for repairs
Often more expensive Often more affordable

Best Extended Auto Warranty Providers

While a manufacturer’s extended auto warranty may be the right choice for some drivers, others can benefit from opting for a reputable third-party company instead. After thoroughly reviewing the extended warranty industry, we found Endurance, CARCHEX, and CarShield to be the top three providers available.

Endurance CARCHEX CarShield
Our Rating 5.0 out of 5.0 5.0 out of 5.0 4.5 out of 5.0
Number of Plan Options 6 5 6
Maximum Term Length 8 years/200,000+ miles 10 years/250,000 miles 200,000 miles
Deductible Options $0, $50, $100, $200 $0, $50, $100, $200 $0, $50, $100
Availability All states except CA All states All states except CA
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Shop Endurance - Our Top Pick for Extended Warranties