The Extended Car Warranty is Worth It – A 2023 Guide

Extended Car Warranty is Worth It

Buying a car is not always a straightforward process for most people. It comes with many regulations and requirements that new car owners must abide by. Among the many things you need to be aware of when buying a car is an extended car warranty.

If you interact with multiple car salespeople before buying your car, you will realize that a majority of them offer you or pitch for an extended car warranty. You need to be very careful when dealing with such salespeople.

Even though a car warranty is a good thing, you need to understand that it comes at a very high price. In addition, it might not cover all issues that you might face when using the car. You might also be covered by your manufacturer, meaning that you might not need an extra warranty.

Before you accept an extended car warranty, it is good to understand what it is and why you should or should not go for it. That notwithstanding, it is worth it.

Introduction to Extended Car Warranty

An extended car warranty can be defined as a car service contract that is bought from third-party vendors. This contract is optional for car owners. The service contract covers the cost of replacements and major repairs after your car covers a certain number of miles or after several years.

Even though the warranty starts after the expiry of the manufacturer’s warranty, these two can overlap. You, therefore, need to be careful to make sure that they do not overlap.

Car salespeople tend to pitch extended car warranties when customers are buying a car. You, however, do not have to get it the same day you are getting your car. No one is allowed to push you – you can buy this warranty any time that you would like.

Using an extended car warranty requires you to look for an authorized car repair center where you will have to pay for the work done with your money. After that, you can then ask for reimbursement later.

What is the Cost of an Extended Car Warranty?

Different providers have different prices for extended car warranties. Generally, they range between $1,000 and $5,000. However, different factors such as the contract length and the condition, model, and make of the car are used to determine the cost of an extended car warranty.

Sometimes, you might find yourself paying some deductibles when submitting claims. Other providers even ask you to take care of part of the bill. This means that you should not rush into getting an extended car warranty. Always make sure that you understand the terms and conditions before signing the contract.

You can also consolidate your debts by putting together the extended car warranty cost and your car loan. However, when doing this, you should think about the long-term effects of the consolidation. For instance, are you ready to start paying interest on your car warranty? If yes, then this will be an additional expense for you.

The good news is that you have a chance to negotiate with dealers to get a price that works for you. When negotiating, start your price at about 60% to 70% of the total amount that the provider asks for. Then negotiate to get a price that will not affect your financial freedom.

Types of Extended Car Warranty

There are two types of extended car warranty. They include aftermarket warranties and manufacturer’s warranties.

Aftermarket Warranties

Aftermarket extended car warranties can be obtained from third-party vendors and dealerships.

They include;

  • Corrosion Warranties: They cover any damage to your car that results from rust and other corrosive materials.
  • Wrap Warranties: These are supplements to a type of manufacturer’s warranty that seek to offer bumper-to-bumper coverage.
  • Adjustment Warranties: These are warranties that cover some of your car repairs for new cars that are a few weeks or months old.
  • Extended Warranties: These are similar to most of the warranties offered in the other type of extended car warranties, but they come with strict rules and exclusions, especially with what they cover.

Manufacturer’s Warranties

Manufacturer’s warranties are offered by the manufacturer of your car. This means that you have to buy your car from the manufacturer or get a used car certified for you to qualify for this warranty.

They include;

  • Bumper-to-bumper Warranties: These warranties cover almost any mechanical issue with your car apart from tear and wear damage and routine maintenance.
  • Basic Warranties: These are the kind of extended car warranties you get with new cars or used cars that have been certified. With a basic warranty, breakdowns of systems and main car parts will be covered.
  • Secret Car Warranties: With a secret extended car warranty, sometimes referred to as silent recalls, you qualify for free repairs, but only from the car’s manufacturer.
  • Powertrain Warranties: All power components connecting to the wheels of your car are covered by a powertrain warranty. Things like transmission and engine are also covered.

What is Covered by an Extended Car Warranty?

You can think of extended warranties as a kind of insurance policy that you can use for the major parts of your car. If your car breaks down, all you have to do is to look for an authorized car repair shop. Here, you will either pay a deductible or the whole amount be reimbursed later. Some repair shops might only require a fraction of the entire bill.

So what does the extended car warranty cover? Well, this depends on the type of warranty that you have and the provider. Things such as damages resulting from normal tear and wear as well as routine maintenance are not covered by the extended car warranty.

However, the major parts of a car such as the transmission and engine are covered. Some providers will also give you add-ons such as tire protection, service for trip interruption, reimbursement for car rental, and roadside assistance when you have issues.

Always make sure that you know what is covered by your warranty. When signing the contract, go through the list of items written on the contract. This is important in ensuring that you avoid being swindled and you do not pay for something that you are already paying for in your car warranty.

Is it Worth It?

Well, as you can see above, many reasons make an extended car warranty a great asset for your car. With this kind of warranty, you will be protected from car repair bills and will have peace of mind knowing that your car will always be taken care of.

If you are buying a new car, then make sure that you go through the contract to understand the terms and what the warranty covers. This will help you get a warranty that meets your requirements.


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