Extended car warranty guide

Key points

• An extended car warranty covers mechanical breakdowns that occur through normal vehicle use.

• You can choose an extended warranty plan that offers comprehensive coverage, basic powertrain protection or a middle ground between the two.

• Buying an extended auto warranty from a third-party provider allows more purchase flexibility and a wider selection of repair facilities.

An extended car warranty picks up where your new vehicle limited warranty (or factory warranty) leaves off. Also known as a vehicle service contract, an extended warranty covers certain repairs or part replacements for a selected number of years or miles. Just like with a factory warranty, an extended warranty is designed to protect car owners from the high cost of repairs related to faulty workmanship or defective parts.

You can buy an extended warranty from a dealership or from an independent provider. When you buy a new car, you’ll be offered an extended warranty from the manufacturer. We don’t recommend going this route, as the price of the vehicle service contract will be added to your auto loan. You’ll end up paying interest on the warranty as well as the vehicle.

You only have until the end of your factory warranty period to buy an extended plan from a manufacturer. But you can purchase a vehicle protection plan from a third-party car warranty company at any time.

How does an extended car warranty work?

Put simply, an extended car warranty pays auto repair costs for covered breakdowns at approved facilities. The types of mechanical failures covered depend on the level of coverage you select. The table below highlights the most common repairs our December 2023 auto warranty survey respondents reported filing a claim for.

One of the main differences between an extended warranty from a manufacturer and a third-party provider is where you can have your car repaired. When you buy a plan from an automaker, you’ll need to take your vehicle to a dealership for warranty repairs. With a third party, you can take your car to any repair shop certified by the National Institute for Automotive Service Excellence.

Warranty providers vary in terms of how covered repair costs are paid. Most reputable aftermarket extended warranty companies will pay repair facilities directly. However, a few will require you to pay the full repair cost up front and then reimburse you.

There’s typically a waiting period for an extended warranty to take effect. The most common waiting period is 30 days or 1,000 miles.

What’s covered by an extended car warranty?

As mentioned, an extended warranty covers parts and systems of your vehicle when they break down. Depending on the coverage and mileage limit you choose, each plan covers different parts. You’ll need to read the fine print of your contract to know specifically what your extended car warranty covers.

The perks that most companies include with coverage are these:

• Rental car reimbursement
• Roadside assistance
• Towing
• Trip interruption coverage

What’s not covered by an extended car warranty?

Like a factory warranty, an extended car warranty is not intended to cover damage caused by accidents (that’s what your car insurance company is for). A vehicle service contract also doesn’t cover damage related to vehicle misuse, such as racing or driving over curbs. Here are a few other common extended warranty exclusions:

• Damage from environmental causes like natural disasters, tree sap, bird droppings or acid rain
• Damage from lack of routine maintenance
• Routine maintenance services like oil changes and tire rotations
• Tires (typically covered by separate manufacturer warranties)
• Wear-and-tear components like brake pads, wiper blades, shock absorbers and light bulbs

Types of extended car warranties

There are three main classes of extended car warranties: bumper-to-bumper warranties, mid-level plans often referred to as powertrain plus and powertrain coverage. Here are some additional details on these types of extended warranty coverage:

• Bumper-to-bumper: These warranties are also referred to as exclusionary plans because they cover all vehicle components outside of a small list of exclusions. These plans mimic new vehicle limited warranties.
• Mid-level: A middle ground between a comprehensive extended warranty and a basic powertrain plan, mid-level coverage often adds things like air conditioning, the fuel system and suspension to standard drivetrain protection.
• Powertrain: This type of vehicle service contract protects the key engine, transmission and drive axle components that create power and transfer it to your car’s wheels. A powertrain warranty offers basic coverage and is best for vehicles with high reliability ratings from outlets like J.D. Power and RepairPal.

Based on our survey of 1,500 extended warranty customers, most respondents were satisfied or very satisfied with their coverage plans. About 42 percent of respondents purchased a powertrain plan, 34 percent purchased a bumper-to-bumper plan and 12 percent purchased mid-level coverage.

According to our survey, the highest reported repairs were for the engine, air conditioning and fuel system. Keep this in mind when you’re looking into coverage options and are thinking about which plan would be best for you.

How much does an extended car warranty cost?

Based on the quotes we received from the top providers in the industry, an extended car warranty can cost anywhere from $1,500 to $4,000 or more in total, depending on coverage level and terms. If you want a bumper-to-bumper plan that lasts five years or 100,000 miles, you should expect to pay somewhere around $3,000 in total over the life of the warranty.

Extended car warranty cost factors

What you pay for an extended warranty depends on the following factors:

• Coverage level: An exclusionary plan covers more vehicle components so it costs more than a basic powertrain plan.
• Deductible: Third-party warranty providers give you a range of deductible options. You can often pick a deductible from $0–$200. The higher your deductible, the lower your monthly payments. Just remember that you’ll have to pay more out of pocket if you choose a higher deductible.
• Mileage: High-mileage vehicles are also more prone to expensive repairs, so they cost more to cover with an extended warranty.
• Vehicle make and model: Luxury cars, sports cars and exotic vehicles are more expensive to cover due to higher repair costs. Older vehicles in general also cost more to cover with an extended warranty because they’re more likely to need major work.
• Warranty provider: Some car warranty companies offer more affordable coverage than others. It’s always best to compare free quotes before you buy a vehicle protection plan.

Extended car warranty quotes

The table below features extended warranty quotes we received from our top-rated providers. Each of these estimates is for a 2020 Hyundai Elantra with 30,000 miles and includes a $100 deductible.

Warranty Provider	Plan Type	Terms	Monthly Price	Total Price
Endurance	Exclusionary	2.5 years/40,000 miles	$90	$2,703
Endurance	Mid-level	2.5 years/40,000 miles	$90	$2,697
Carchex	Exclusionary	Unlimited/month-to-month	$140	N/A
Carchex	Mid-level	Unlimited/month-to-month	$130	N/A
Autopom	Exclusionary	5 years/100,000 miles	$112	$2,827

Final take: Extended car warranties put your repair costs into monthly payments instead of out-of-pocket costs

An extended car warranty is a great way to protect your automotive investment and save on repair bills after your factory warranty expires. Buying from a third-party provider gives you more flexibility in terms of when you can purchase extended coverage and where you can take your vehicle for covered repairs. The key to getting the best deal on an extended warranty is to compare quotes online from multiple providers.

We recommend getting a quote from our #1 rated provider Endurance: