An extended warranty plan from a reputable provider can provide drivers with valuable coverage and excellent support. A bad plan, on the other hand, could end up being a waste of money and a huge headache in the end.
To help you find the best coverage for your vehicle, our research team created this step-by-step guide on how to buy an extended warranty. You’ll find information about the types of warranties available, where you can buy them, and how to get and compare quotes. We’ve also suggested some of the best extended car warranty companies to help as you start your search.
What Is an Extended Warranty for a Car?
Extended car coverage basically lengthens the manufacturer’s warranty that comes standard on new vehicles. While new car limited warranties typically last for three years or 36,000 miles, buying extended coverage can offer you protection for years beyond.
Similar to the factory warranty on a new car, vehicle service contracts can cover unexpected repair costs caused by workmanship flaws or mechanical failures. While third-party warranties are technically a form of vehicle service contract or vehicle protection plan, they’re known as extended auto warranties because they function like a factory warranty in practice.
What Does an Extended Warranty Cover?
What a car warranty covers depends on the details of your vehicle service contract. Some plans are exclusionary, meaning they take care of all car components except those specifically not listed in the contract. Powertrain plans, on the other hand, offer basic coverage for your car’s priciest parts. Depending on the provider, you may discover several levels of stated-component coverage in between exclusionary and powertrain plans.
Types of Extended Auto Warranties
While covered parts and levels of protection vary by the provider, most extended car warranties fall into three main categories:
Bumper-to-bumper coverage: These exclusionary warranties cover nearly everything in your vehicle apart from specific components listed in the agreement. This coverage plan is pretty similar to what you’d find in a new vehicle limited warranty.
Stated-component coverage: Mid-tier warranties come with a list of components that are covered under the vehicle protection plan. While not as comprehensive as a bumper-to-bumper warranty, you’ll receive protection for many of your car’s systems.
Powertrain coverage: The most basic extended warranty plans cover only your vehicle’s critical parts like its engine, drivetrain, and transmission. While the protection given by a powertrain plan is limited, coverage will most likely be affordable.
What Doesn’t an Extended Warranty Cover?
No matter your level of coverage, there are certain parts that an extended warranty just won’t protect. Below are a few of the most common exclusions:
Routine maintenance services: Oil changes, tire rotations, and other forms of regular maintenance are your own responsibility. Before you buy an extended warranty, it’s worth noting that failure to stay up to date on these services could void your coverage.
Wear and tear items: Parts of your car that break down over time such as brake pads, windshield wipers, and tires aren’t typically covered by an extended warranty.
Collision damage: Even if a covered part gets damaged in a car accident, your extended warranty won’t cover repairs since that’s deemed the responsibility of car insurance companies.
Damage from improper use: Extended warranties cover damage that occurs during normal use of your vehicle. If your car suffers a mechanical failure from using it in reckless or improper ways, your warranty won’t cover repairs.
All extended car warranty sample contracts should come with a detailed list of exclusions. Drivers often forget to consider the exceptions to their coverage even though it’s a key piece of learning how to buy an extended warranty.
Can You Buy an Extended Warranty for a Used Car?
You can buy an extended warranty for a used car as long as it meets the coverage provider’s requirements. Each company has a different set of limits to which vehicles they will and won’t cover, as well as when you can purchase coverage. Additionally, some used cars could become ineligible due to old age, high mileage, or poor condition.
How Do I Buy an Extended Car Warranty?
It’s worth performing careful research before you select a plan since not all warranty providers offer the same customer support, quality of coverage, or value. Below are some tips for how to buy an extended warranty that should lead you to a cost-effective and high-quality coverage choice:
1. Set Your Ideal Budget and Coverage Level
How much you can spend on a plan and what you want covered by an extended warranty should be your top considerations. Having a general idea of your budget and coverage needs will help you narrow down your extended warranty options before you start shopping around.
How Much Warranty Coverage Do I Need?
How much warranty coverage you need depends mostly on your vehicle and personal preferences. When deciding how much extended coverage to buy, there are a few things to consider:
Value of your vehicle: Make sure not to spend more on the warranty than your car is worth. While it makes sense to buy comprehensive coverage for a newer vehicle to protect its value, you may want a basic plan for an older or high-mileage car.
Condition of the car: You know your vehicle better than anyone. If you think that you’ll need repairs in the near future, consider a plan that covers more parts.
Likelihood of a breakdown: Most cars have common issues that you can find online. Think about purchasing an extended warranty if certain parts are known to fail.
Personal finances: What can you afford to fix on your own and what issues could potentially break the bank? Powertrain warranties only cover expensive components like your engine and transmission while comprehensive plans take care of more parts.
Peace of mind: Some of the value of an extended car warranty is the peace of mind you get from knowing you won’t be hit with an expensive repair bill out of nowhere. If you value that security, it may be worth paying for a higher level of protection.
2. Find Extended Car Warranty Companies
Part of knowing how to buy an extended warranty is understanding where you can buy one. Most vehicle service contracts fall into one of two categories: manufacturer extended warranties and third-party extended warranties. They’re purchased in different ways at separate locations, so it’s worth understanding what makes each warranty type unique.
What Is a Factory Extended Warranty?
Many automakers offer their own branded extended warranty plans, though coverage is often administered by third-party providers. These contracts can be good for car owners who prefer to have repairs done at the dealership by brand-certified technicians using original equipment manufacturer (OEM) parts.
However, coverage from vehicle manufacturers often comes with some notable limitations. Many require you to get coverage before your factory warranty expires, something you won’t need to do with an independent provider. You may also be forced to have all car repairs performed at a specific dealership’s service center.
Drivers wanting to know how to buy an extended warranty for the lowest price may want to look at third-party coverage. That’s because car dealers typically charge higher rates.
Manufacturer Extended Warranty: Pros and Cons
Manufacturer Extended Warranty Pros
Manufacturer Extended Warranty Cons
Repairs use OEM or authorized components
Repair work must be done at dealerships
Work is performed by brand-certified technicians
Somewhat limited coverage options
Cost of coverage can be rolled into car payments
Restrictions on when to purchase coverage
What Is a Third-Party Extended Warranty?
The main alternative to a manufacturer’s warranty is coverage bought from an independent extended auto warranty provider. Third-party companies specialize in vehicle service contracts and therefore have some noteworthy advantages over automakers.
One of the main advantages is flexibility, both in how you buy coverage and in how it’s used. Independent warranty companies usually have fewer restrictions on when you can purchase coverage and allow you to get plans on the internet or over the phone. Most also allow work to be done at any repair facility certified by the National Institute for Automotive Service Excellence (ASE?).
Independent providers tend to offer multiple levels of coverage, giving you options on how much coverage to buy and the amount you’re willing to spend. Many plans from third-party extended warranty companies come with additional perks like roadside assistance and rental car reimbursement as well.
Independent Extended Warranty: Pros and Cons
Independent Extended Warranty Pros
Independent Extended Warranty Cons
Work can be done at almost any repair shop
Not all third-party companies are reputable
More levels of coverage and plan add-ons
May use cheaper aftermarket parts for repairs
Often cheaper than manufacturer warranties
Contracts may contain restrictions in the fine print
3. Compare Car Warranty Quotes
Once you’ve scoped out your extended warranty options, it’s time to start shopping around. Asking for free quotes is the only way to get a precise idea of how much you’ll pay for coverage. Comparing rates from a few providers is vital to finding the best price for your desired level of coverage.
How To Get Extended Car Warranty Quotes
It can be tough to obtain quotes for a manufacturer extended warranty, but most third-party providers make the process simple. You can normally get quotes over the phone if you prefer, but our team found it much easier to get extended car warranty quotes online.
Getting instant quotes online is a simple step in the process of how to buy an extended warranty. Here’s how the process generally works:
Gather your information: You’ll need basic details about your car such as its make, model, year, and mileage to get started. Providers will also ask for your phone number and email address along with the vehicle identification number (VIN). The most common place to find your car’s VIN is along the door jamb on the driver’s side of the vehicle.
Submit your details: You can get quotes directly from a provider’s website or by using online tools that offer multiple car warranty quotes at once.
Wait for a response: Some providers return quotes almost immediately while others may take a bit longer. In most cases, you should receive a response within a few hours.
It may be best to use a warranty quote tool like the one featured at the beginning of this article that only connects you with legitimate providers. After all, one of the dangers of not knowing how to buy an extended warranty is that less reputable companies could spam you with emails and phone calls.
How To Compare Auto Warranty Quotes
Once you’ve gotten quotes back, it’s time to compare them with each other. Price is an obvious point of comparison and ranks as the most important one for the majority of drivers. Here a few other factors to consider as you compare extended warranty offers:
Exclusions: Even if warranty plans cover the same components, some providers have more exclusions than others. This can make a big difference when it comes time to use your warranty coverage.
Waiting period: Most extended warranty plans come with a waiting period in which you aren’t allowed to use your coverage. This is typically both a length of time and a number of miles, with 30 days and 1,000 miles being the norm. However, some auto warranty providers have longer waiting periods and others have shorter ones.
Benefits: Some warranty companies package more benefits into their plans than others. Perks like towing services and trip interruption coverage can add value to a plan and may justify a slightly higher price point compared to others.
Fine print: Make sure to read all of the information in the sample contract you receive. Companies may hide critical details in the fine print that could affect when your coverage actually applies.
4. Choose an Extended Warranty Provider
After you’ve thoroughly reviewed your options and compared quotes, it’s time to make a final call. Extended warranties are a major financial decision, so it’s worth taking time to think carefully about which company to get coverage from.
What To Look For in a Warranty Provider
While many extended car warranty providers offer high-quality coverage and reliable customer support, not all do. Here are a few ways to tell whether a warranty company is reputable:
Company scores: Ratings from industry organizations and customers on sites like the Better Business Bureau (BBB), Trustpilot, and Google can give you a quick look at a company’s overall reputation.
Claims process: Companies often differ in how they service their warranty claims. Direct providers handle the entire claims process themselves while other companies leave most of the work in the hands of an administrator.
Cancellation process: Some extended warranty providers make it easier to cancel your contract and get a refund than others. There’s always a chance that you could change your mind after making a purchase, so consider how difficult coverage is to cancel.
Customer service reputation: In addition to overall scores, the content of reviews can provide insights into a company’s customer experience. While it’s expected that each provider will have a few bad reviews, pay attention to any patterns of complaints or reports of scams.
5. Purchase Your Extended Car Warranty
Now that you’ve made a decision, all that’s left is to sign your contract and pay for the extended warranty. Once you’ve done so, the waiting period will begin and your coverage will follow suit.
How To Pay for an Extended Warranty
The purchasing process is a big piece of how to buy an extended warranty, but it’s pretty simple to navigate regardless of your budget. That’s because most third-party providers offer two different methods to pay for extended coverage:
Upfront payment: You can opt to cover your entire extended car warranty cost upfront if you’re able to. Some providers will even give you a warranty discount for doing so.
Monthly payments: Most providers let drivers spread the cost of an extended auto warranty across monthly payments. You’ll need to stay on top of these payments to keep your coverage active, so it may be smart to set up automatic payments.
Many companies also require a minimal down payment on your extended warranty plan. If your provider requires one, you’ll have to cover the down payment before protection actually begins.
How Do I Cancel an Extended Warranty?
You can almost always get a refund if you cancel an extended car warranty plan. While cancellation policies differ between companies, they tend to work in relatively similar ways.
For example, most providers offer a full refund if you cancel within the plan’s 30-day waiting period. It’s also common to allow you to cancel warranty coverage at other times and receive a prorated refund based on the amount of time left on your contract.
There may be differences in the steps needed to cancel your coverage. Some extended warranty providers make it as simple as clicking a few buttons online, but others require you to call them or even send in written verification.
How Much Does an Extended Warranty Cost?
Our team found that extended car warranties tend to cost between $1,500 and $3,000 in total. In our March 2022 car warranty survey, roughly half of the participants said they paid between $1,600 and $3,200 for coverage, though your amount will depend on various factors.
What Affects Extended Warranty Costs?
The first step in how to buy an extended warranty is setting your coverage level and term length, and those are also the top factors in your extended car warranty costs. However, there are plenty of other factors that play sizable roles as well.
Coverage plan: The level of coverage you select is the primary factor in your extended warranty’s cost. As you’d assume, more comprehensive plans have higher prices.
Vehicle type: Larger vehicles and more expensive cars tend to cost more to cover. Extended warranty providers may also charge more to cover cars with low reliability ratings or lots of known issues.
Mileage: The higher the mileage on your car’s odometer, the more you’ll pay for warranty coverage. That’s because high-mileage vehicles are far more likely to suffer from mechanical failures.
Vehicle age: Older vehicles have a higher risk of mechanical breakdowns and therefore get charged steeper rates for coverage.
Deductible: Many providers let you set your own deductible, sometimes as low as $0. The lower you make your deductible, the more you’ll likely have to pay for your plan.
Chosen provider: Companies also set different rates for their warranty coverage plans. Some may have cheaper prices for one level of coverage but higher-than-average rates for another. That’s why it’s smart to get car warranty quotes from multiple providers if you want to find the best rates.
How To Buy an Extended Car Warranty: Conclusion
Knowing how to buy an extended warranty allows you to get competitive rates on coverage from a trustworthy provider. A vehicle service contract is a major purchase for most car owners and it ought to be treated as such.
Carefully consider your budget and coverage needs before you start looking at plans and warranty providers. Manufacturer extended warranties may be attractive to some, but independent providers tend to offer greater flexibility and lower prices.
Recommended Extended Warranty Providers
Because of how much warranty rates vary, it’s best to compare quotes from multiple providers. Make sure to consider the quality of the company and the details of your potential plan in addition to the price written on your quote.
We recommend starting your search with Endurance and CARCHEX, two of the industry’s leading providers that ranked at the top of our 2023 extended warranty study.
Endurance: Best Overall
Endurance earned 4.6 out of 5.0 stars and the title of Best Overall in our 2023 warranty study. The company excelled in most categories, offering six coverage plans along with high-quality service and customer support.
Another differentiator of Endurance is that it’s a direct extended warranty provider. While most companies use third-party administrators to service warranty claims, Endurance offers a smooth policyholder experience by handling everything in-house.
Industry veteran that handles your plan directly, from quote to claim
CARCHEX: Best for Used Cars
CARCHEX has been serving customers since 1999, making it one of the most established names in the extended warranty industry. The company’s partnerships with CARFAX, Kelley Blue Book, and RepairPal are testaments to its industry standing.
While CARCHEX scored well in nearly every category, it’s one of the best options for owners of used vehicles – especially those with lots of miles on them. The company has one of the highest mileage limits, covering cars for up to 10 years or 250,000 miles.
Top-rated provider with unmatched customer service and affordable coverage
How To Buy an Extended Warranty: FAQ
Below are some frequently asked questions that help to explain how to buy an extended warranty:
Can I buy my own extended warranty?
Yes, you can buy your own extended car warranty coverage. If you want to extend a factory warranty, you can get coverage from a dealership or from an independent warranty provider. Third-party companies tend to offer greater flexibility, more options, and lower prices.
Can I buy an extended warranty separately?
You can buy an extended warranty separately from your initial car purchase, even if you want to choose a plan from the manufacturer. Most automakers allow you to purchase an extended car warranty while your factory warranty is still active. Third-party warranty companies allow you to add coverage at almost any time whatsoever and tend to provide more warranty options.
What is a downside to purchasing an extended warranty?
The main downside to purchasing an extended warranty is that you may never end up using the coverage you paid for. While a few major auto repairs can easily exceed the total cost of a plan, there’s no guarantee that you’ll face any car problems.
How do I put an extended warranty on my car?
You can put an extended warranty on a car by purchasing coverage from either your vehicle’s manufacturer or from an independent provider. Your extended warranty coverage will be tied to the car’s VIN after you purchase it and can be used for as long as the contract lasts.
Our expert review team takes satisfaction in providing accurate and unbiased information. We identified the following rating categories based on consumer survey data and conducted extensive research to formulate rankings of the best extended auto warranty providers.
Industry Standing: Our team considers Better Business Bureau (BBB) ratings, availability, and years in business when giving this score.
Coverage: Because each consumer has unique needs, it’s essential that a car warranty company offers an array of coverage options. We take into account the number of plans offered by each provider, term limits, exclusions, and additional benefits.
Affordability: A variety of factors influence cost, so it can be difficult to compare quotes between providers. Our team performs ongoing secret shopper analyses for different vehicles, mileages, warranty plans, and locations to give this rating.
Transparency: We consider the transparency of each company’s contracts and the availability of a money-back guarantee when determining this score.
Customer Service: Reputable extended car warranty companies operate with a certain degree of care for consumers. We take into account customer reviews, BBB complaints, and the responsiveness of the customer service team.