What Is An Extended Car Warranty? (2024 Buyers Guide) (2024)

How Does an Extended Car Warranty Work?

An extended car warranty, also called a vehicle service contract or a vehicle protection plan, offers coverage that will take care of car repair costs after a factory warranty expires. Like any car warranty, these extensions provide coverage for part breakdowns due to defects or faulty workmanship. You can purchase a plan at any point in your vehicle’s life and can choose from multiple levels of coverage to suit your needs.

What Is the Difference Between a Vehicle Service Contract and an Extended Warranty?

Essentially, a vehicle service contract includes all the coverage that an extended warranty does and can have an additional coverage for routine maintenance and wear and tear items. Maintenance items and wear and tear are not typically covered under extended car warranties. In other words, all extended warranties are considered vehicle service contracts, but not all vehicle service contracts can be extended warranties.

Read more: What are vehicle service contracts?

Extended Warranty vs. Car Insurance

Car insurance is required to purchase any vehicle in your name and covers you for environmental damages and accidents. Unlike auto insurance, extended warranties are optional plans and cover repairs from mechanical breakdowns.

Read more: Car warranty vs. auto insurance

What Does an Extended Car Warranty Cover?

Covered items primarily depend on your chosen provider and level of vehicle protection. Plans can range from covering just your drivetrain system to protection for electrical systems and accessories. In all cases, damages can only be covered if a part breaks down during the regular use of the vehicle and is not considered wear and tear.

Types of Extended Warranties for Cars

There are two main types of extended warranties for cars: bumper-to-bumper warranties and powertrain warranties. Below we will break down the coverage for each type and the terms they have.

Bumper-To-Bumper Extended Warranty

Bumper-to-bumper warranty plans, also called exclusionary vehicle service contracts, provide coverage for most parts from the front to the back of your vehicle. Since they are called exclusionary warranties, this means that all parts are covered unless stated otherwise. All plans include your powertrain and will typically come with additional items like:

• Electrical
• Steering
• Heating systems
• Cooling systems
• Suspension
• Fuel systems
• Manual components (door latches, seat tracks and more)
• Axels
• Seals
• Gaskets

In some cases, wear-and-tear items, accessories and other systems may also be included. Some providers may offer mid-level coverage and exclude some of the items on this list. In any case, it’s best to check the plan’s contract to get the most accurate information.

Powertrain Extended Warranty

In short, powertrain extended warranties cover the engine and drivetrain components that allow your car to move. All powertrain extended warranties are inclusionary, meaning all parts mentioned in the contract are covered. These plans tend to last longer than other warranties since these part systems are less likely to break down over a longer time period.

Drivetrain vs. Powertrain Warranty

Essentially, the only difference between a drivetrain warranty and a powertrain plan is the inclusion of the engine in coverage. Powertrain plans have the engine included while the drivetrain warranties don’t.

How Long Is an Extended Warranty on a Car?

Extended warranties can last anywhere from one year to 15 years and mileage limits of up to 300,000 miles according to our research. However, your warranty term length varies widely depending on the provider you choose and the coverage level you get. For example, a typical bumper-to-bumper extended warranty has a 3 year/36,000 mile term while powertrain plans tend to have a 5 year/60,000 mile term.

What Voids an Extended Car Warranty?

To maintain extended vehicle warranty coverage, there are some rules to follow. The provider may void your coverage in the following cases:

• Aftermarket modifications were discovered on your vehicle
• Damages are due to misuse and neglect
• Using improper fluids for the car
• Altering your odometer
• Your vehicle is declared a total loss

What Does an Extended Car Warranty Not Cover?

As with most car warranties, an extended warranty will typically not cover these items:

• Wear-and-tear items (seats, batteries, breaks and more)
• Routine maintenance
• Damage from misuse or neglect
• Damage from environmental issues (hail, wind and more)
• Breakdowns due to aftermarket modifications
• Damage from accidents

Be sure to read the fine print in your extended warranty contract to avoid surprises.

Where Can I Get an Extended Warranty for My Car?

You can purchase an extended car warranty from your vehicle manufacturer, from a third-party warranty company or even through a credit union. Keep reading for more details on extended warranties from automakers versus from independent providers.

• Automakers: Manufacturer extended warranties or dealership warranties are available from most automakers. Unlike other options, plans must be purchased during your new car or CPO warranty period and only can be applied to vehicles manufactured by the company.
• Third-party warranty companies: This option includes brokers and direct providers focused on selling vehicle protection plans. Typically these companies provide the most customizable coverage and some of the best perks.
• Financial institutions: Banks and credit unions may also offer more than auto loans and have vehicle coverage options. However, financial institutions usually provide plans as brokers instead of directly, so you wouldn’t be working directly with that company.
• Insurance providers: Some car insurance companies offer mechanical breakdown insurance which provides similar coverage, typically for a lower price. Many of the largest car insurance companies offer this so we recommend including them in your vehicle protection search.

What Does an Extended Car Warranty Cost?

Our team has spent more than 500 hours researching extended warranties, and we found that the average cost of an extended car warranty was $3,026 in total. This price was found using the average rate of an extended warranty from each of our top eight providers. Your actual extended auto warranty cost will depend on factors such as your vehicle’s make, model, age and mileage as well as your chosen provider, deductible and coverage level.

Average Extended Car Warranty Costs

Below is a breakdown of typical extended car warranty costs by coverage level:

While exclusionary contracts have higher price tags, you’ll receive protection for more vehicle components than you would with a powertrain or drivetrain warranty.

Is an Extended Car Warranty Worth It?

There is no one-size-fits-all answer, but once your factory warranty coverage expires, you’ll be on the hook to pay for any unexpected auto repair costs out of pocket. If your vehicle is particularly unreliable, has high mileage and you want to keep it for a long time, an extended warranty can be worth it. However, if average repair/maintenance costs are lower than pricing for a vehicle service contract, it typically isn’t a good purchase.

While these statements are generally true, everyone’s situation is different and there are plenty of things to consider when buying an extended car warranty. To help you decide if it’s a good idea for you, we’ll provide you with all the factors that you should consider and the general pros and cons of extended protection plans. While you determine whether it’s worth it, ask yourself these questions:

• Is my car reliable?
• What are common repairs and maintenance costs for my particular model?
• Are average repair and replacement costs lower than the cost of an extended warranty?
• How old is my vehicle and how long do I plan to keep it?
• Am I still covered under my new car or CPO warranty?
• How much mileage do I see myself putting on my car?
• Can I afford paying for repair and replacement costs if a breakdown occurs?

Pros and Cons of Extended Car Warranties

As with anything else, there are pros and cons of extended car warranties. Learn more about both the pros and cons of extended coverage below:

Car Reliability Ratings

When looking at reliability ratings, see if your vehicle is well below the industry average for car issues. Currently, the average number of issues per 100 vehicles is 186, so if your particular brand is lower than this number, you should consider getting extended warranty coverage. Below is a complete list of reliability ratings and average number vehicle problems for all major automaker brands in the country, according to the J.D. Power 2023 U.S. Vehicle Dependability Study^SM:

*Tesla is ineligible for ranking because it doesn’t allow J.D. Power access to owner information in states where permission is required by law.

Keep in mind that these rankings are for only current 2023 models, so you’ll have to reference previous J.D. Power Dependability Studies if you have an older vehicle. Below is a list of studies from previous years:

• 2022 J.D. Power Vehicle Dependability Study
• 2021 J.D. Power Vehicle Dependability Study
• 2020 J.D. Power Vehicle Dependability Study
• 2019 J.D. Power Vehicle Dependability Study
• 2018 J.D. Power Vehicle Dependability Study
• 2017 J.D. Power Vehicle Dependability Study

If your brand isn’t in the studies, we suggest looking on Repairpal for additional reliability information.

Average Car Repair and Maintenance Costs

In conjunction with reliability ratings, you should also take into account repair and maintenance costs. A reliable vehicle may not need to be repaired often, but the costs of doing so can be high when you have a breakdown. In some cases, a vehicle may not be reliable, but has low repair costs.

To further help you, we’ve provided average annual repair costs for popular brands from Repairpal to gauge your risk:

Is My Car Still Under Warranty?

Whether your car is still under factory warranty really depends on when you bought your vehicle. If you have coverage already, there’s no rush to purchase an extended warranty. New car warranties are made up of multiple different coverage plans that each vary in term length, so it’s best to contact your local dealership for coverage status and specific contract details.

How Long Do You Plan On Driving Your Vehicle?

Much of the decision to get warranty coverage depends on how long you’ll keep your car. Typically, if you want to keep your vehicle past the U.S. average of eight years it’ll often be worth getting a plan. The one thing you should keep in mind is that the older a vehicle is, the larger the risk of a mechanical breakdown, even when well taken care of.

How Much Mileage Will You Put On Your Vehicle?

Another important consideration is how much you’ll actually drive. If you’re driving long distances often, it’s often a good idea to purchase a bumper-to–bumper plan to ensure you don’t have to pay large amounts out of pocket. While not many providers offer high mileage extended car warranties, there are some that have plans that span 300,000 miles.

What Is Your Current Financial Situation?

Once you have all the information you need about your vehicle, it’s time to consider what you can afford. Compare what’s left over after your current expenses, and see how coverage costs stack up against average maintenance costs for your particular model. If the cost of average repairs is more expensive, coverage is typically worth it, and if not, it won’t be a good purchase.

When comparing costs, we recommend against wrapping your extended warranty costs in a vehicle purchase loan or lease. While your overall monthly payments may be lower, you’ll end up paying much more over time due to interest.

Where To Buy an Extended Car Warranty

If you’re ready to purchase an extended warranty for your used or new car, we recommend comparing prices from various reputable providers. Below, we’ve provided our top picks for extended car warranty coverage. We also discuss the benefits of choosing an aftermarket extended car warranty from a third-party.

Top Extended Car Warranty Providers

Three of the best places to begin your search for extended car warranties are Endurance, CarShield and Carchex. Below you can compare each in more detail and learn more about their plan options in our comprehensive reviews.

Endurance: Most Comprehensive Coverage

Endurance is our highest-rated provider, earning a score of 9.2 out of 10 stars. The company is unique because it sells and administers extended car warranty plans without the help of a middleman or third party. In other words, you’ll deal directly with Endurance representatives during the auto claims process.

Additionally, Endurance offers six levels of coverage that can protect your vehicle for up to eight years or 200,000 miles. Along with high age and mileage limits, you’ll benefit from perks like 24-hour roadside assistance, rental car coverage and travel expense reimbursem*nt. This led us to give Endurance the distinction of Most Comprehensive Coverage.

Read more: Endurance warranty review

CarShield: Affordable Monthly Payments

We awarded CarShield a score of 8.9 out of 10 and named it the provider with Affordable Monthly Payments. It offers both set-term and month-to-month vehicle service contracts for its six levels of coverage, providing customers with flexibility and affordability. CarShield offers warranty protection for vehicles with up to 300,000 miles, making it a great choice for used vehicles with high mileage.

Additional perks included in CarShield’s extended warranty plans include rental car reimbursem*nt and roadside assistance. CarShield also offers specialty coverage for motorcycles and all-terrain vehicles (ATVs).

Read more: CarShield review

Carchex: Great Industry Reputation

Carchex earned a solid 8.9 out of 10 stars from our team, thanks to its outstanding industry reputation. The provider partners with reputable and well-known automotive industry giants such as Kelley Blue Book and Edmunds. In addition, it offers five different warranty plans that can last for up to 250,000 miles on cars up to 20 years old.

Added perks that come with a Carchex extended warranty plan include roadside assistance and rental car reimbursem*nt. Car owners in California can get plans from Carchex, as this provider is one of the few that does business in the state despite its strict extended warranty regulations.

Read more: Carchex review

Benefits of Choosing an Independent Warranty Provider

Third-party or aftermarket extended warranties generally offer more flexibility than manufacturer extended warranties. You’ll often have more levels of coverage to choose from, and third-party warranties are usually cheaper than those bought from the dealership. Many independent providers also let you choose where to get your vehicle serviced as long as it’s at a repair facility certified by the National Institute for Automotive Service Excellence (ASEⓇ).

Arguably the best part about getting an aftermarket warranty company is that you can purchase whenever you’re ready, even if your factory warranty has already expired. You won’t feel pressured to make a big extended warranty purchase at the dealership when you’re buying a new or used car.

While we’ve provided our top picks already, we’ve also reviewed other reputable companies:

• Olive Warranty Review
• Autopom! Warranty Review
• Omega Auto Care Review
• Ox Car Care Warranty Review
• Toco Warranty Reviews
• EasyCare Car Warranty Review
• Everything Breaks Car Warranty Reviews
• Select Auto Protect Warranty Review

The Bottom Line: What Is an Extended Warranty For Cars?

An extended car warranty is an additional protection plan for your vehicle that could save you from unexpected repair costs in the event of a mechanical breakdown. We encourage you to obtain quotes from the best car warranty companies and read the fine print in your contract before settling on a plan and making a purchase.

Extended Car Warranty: FAQ

Below are some frequently asked questions about extended car warranties:

Our Methodology

Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best extended car warranty companies. We collected data on dozens of auto warranty providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the companies that scored the most points topping the list.

Here are the factors our ratings take into account:

• Reputation: Our research team considers availability, ratings from industry experts and years in business when conferring this score.
• Coverage: Companies that offer a variety of choices for warranty coverage, long contract terms and added benefits are more likely to meet consumer needs.
• Cost: Auto warranty companies with affordable rates and multiple deductibles scored highest in this category.
• Transparency: This score is based on contract transparency and the availability of a money-back guarantee.
• Customer experience: Based on customer satisfaction ratings and our extensive shopper analysis, we consider the responsiveness, friendliness and helpfulness of each warranty company’s customer service team.

Our credentials:

500+ hours researched

50 companies reviewed

2,000+ consumers surveyed

*Data accurate at time of publication.