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Pros and Cons of Extended Car Warranties (2021)

  • We discuss the benefits and disadvantages of extended car warranties.
  • Extended auto warranties can put money back in your pocket when it comes to expensive repairs.
  • Extended warranties can also be an unnecessary payment for those who don’t need the extra coverage.

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 options and costs. To remove the guesswork, our team has reviewed the best extended car warranty companies in the industry and ranked them on factors like coverage, value, industry standing, and customer service. Get a few free, personalized quotes below to find the right protection for your vehicle.

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
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Endurance CARCHEX Select Auto Protect
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(866) 990-3410 (866) 950-7122 (860) 294-4933
     

Extended Car Warranty Overview

When you own a vehicle that you want to protect for many miles, it’s smart to consider an extended auto warranty. This extra coverage is also called a vehicle service contract or vehicle protection plan. 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’ll get into more detail on each item below.

Extended Car Warranty Pros Extended Car Warranty Cons
They can increase your vehicle’s longevity. There’s a chance you won’t need the coverage.
You can save on costly repairs. Every contract has its exclusions and limitations.
Coverage is often customizable to your needs and budget. There are usually waiting periods before coverage kicks in.

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 make small 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 an 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 to older, used vehicles, as they tend to break down more often and need more expensive repairs. A used car warranty can offset the price of frequent issues that occur after your car’s factory warranty has expired. 

Pro: Choose the coverage you need.

What repairs do you find yourself paying for repeatedly? What wasn’t covered in your manufacturer’s 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 warranty coverage and powertrain warranty coverage.

If you’re the owner of an older vehicle, extended warranties for cars over 100,000 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 as well.

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. While extended warranties may initially save you money on auto repair bills, 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 the pros and cons of extended car warranties, make sure you know what covered repairs your contract 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 have to 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 Overall

Awarded a perfect 5.0-star rating and our pick for Best Overall warranty company, Endurance performs very well across the board. Available in every state except California, the provider 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, or get a free, personalized quote below to see how much you would pay for coverage.

Best Overall

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(866) 990-3410

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

CARCHEX: Best for Used Cars

Also awarded a 5.0-star rating by our review team, CARCHEX is our 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 gives customers roadside assistance and towing services.

For more information, read our comprehensive CARCHEX review and get a free quote for your vehicle below. Compare Endurance and CARCHEX directly in our Endurance vs. CARCHEX review.

Best for Used Cars

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Get Quote

(866) 950-7122

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 budget for a small monthly fee instead of having to pay a large, unexpected repair bill when a breakdown happens, 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 prices, 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 36,000 miles. This original warranty generally includes all vehicle repairs aside from wear-and-tear items 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. These coverage plans also offer added perks.

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 for affordability, coverage, and customer service from our review team.

Shop Endurance - Our Top Pick for Extended Warranties