Is it worth to get extended car warranty

After purchasing a new or used vehicle, you’ve likely thought about whether you should get an extended car warranty. With the high cost of repairs, this topic is one that deserves some consideration: Are extended car warranties worth it? It depends on what you are looking for, and the answer isn’t always clear-cut.

In this article, we’ll break down the ins and outs of extended car warranties, typical costs, if they’re a sound investment, and some of the best extended car warranty companies to consider. Let’s dig deeper to find the answers you need.

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What Is An Extended Car Warranty?

An extended car warranty is also known as a vehicle service contract. It’s an optional coverage that you purchase to pay for mechanical breakdowns. Most of the time, an extended warranty begins once your vehicle’s factory warranty expires, but there are times when the coverage might overlap.

Car Repair Costs

For an extended warranty to save you money, you need to be paying less for coverage than you would spend on auto repairs. While all vehicles are different, we can get a sense of repair costs by looking at industry averages. According to Liberty Mutual, here are a few repairs that cost between $500 and $1,000 on average.

RepairCostWater pump replacement$300 to $750Radiator replacement$500Timing or serpentine belt replacement$500 to $950

While many vehicle owners would be able to handle a bill of this size, what happens when a repair costs more? Ask yourself what you would do if faced with one of these unexpected repair bills instead:

RepairCostAirbag replacement$3,000 to $6,000Transmission replacement$1,500 to $3,000Suspension system replacement$1,500 to $3,500Head gasket replacement$1,000 to $1,500

Unless you have a large emergency fund, footing a hefty repair bill could do some damage to your bank account. However, there’s no guarantee you will ever need such a repair.

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Reputable extended car warranty company that offers six levels of coverage and has excellent customer reviews. It is our choice for Best Coverage and our top overall pick for extended warranty providers.

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Are Extended Car Warranties Worth It?

For many car owners, purchasing an extended warranty can provide peace of mind. When you consider the average costs of critical vehicle component parts and systems, peace of mind alone might be worth it. To determine if an extended car warranty is worth it for you, look at both the cost and what it saves you from spending. The choice is an important one. With the average American spending $1,986 on vehicle repairs and maintenance, according to Fool.com, over the course of five years, you should ask yourself if you are prepared to cover small repairs and the occasional larger, more expensive repairs that may come your way. If you decide you need additional protection, make sure to evaluate providers based on cost, coverage, and company reputation.

Pros And Cons Of Extended Car Warranties

After looking at the costs and potential savings, it’s important to consider some other benefits and pitfalls of vehicle service contracts.

Extended Car Warranty: Pros

Here are some of the advantages you can expect from an extended car warranty:

• Saves you money: If your vehicle requires costly repairs, it pays to have an extended warranty. You simply pay your deductible for any covered repairs, and your warranty company will cover the rest.
• Brings peace of mind: You won’t have to worry about the possibility of expensive auto repair bills. If your plan also incorporates roadside assistance and other perks, you won’t worry about breaking down or having transportation while your vehicle is in the shop, either.
• Attractive to future car buyers: If you plan to sell your car down the road, a transferable warranty can make your car more appealing to prospective buyers.

Extended Car Warranty: Cons

Before you decide that extended warranties are worth it, you should look at this short list of disadvantages as well:

• Usage: Some car owners will never use their car warranties. While this is a fantastic problem to have, you will have paid money for the protection you didn’t use.
• Lack of coverage: If you aren’t careful about what plan you choose, you might not receive the coverage you need. It’s important to read all of the terms, so you are never surprised by a repair bill.
• Warranty overlap: You might have overlapping coverage between a new car warranty from the dealership and an extended warranty. While this seems redundant, signing up for an extended warranty while you still have new car coverage actually helps you save money in the long run.

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CarShield offers six distinct plans, low or $0 deductibles, and multiple payment options, making it our choice for Best Value among extended warranty providers.

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Extended Car Warranty Reviews

Online reviews vary depending on the warranty provider, but many customers of companies like CARCHEX and CarShield think that extended car warranties are worth the cost – even if the return is just peace of mind.

“CarShield gives me peace of mind. I know no matter what happens with my vehicle, it will only cost me $100.”

-Paul via BBB

“Good, friendly service. No nonsense sales. [CARCHEX] offered the most affordable long-term option.”

-James via BBB

There are plenty of negative reviews for car warranty companies, too. However, if you read through them, it’s evident that many of the complaints have to do with repairs not being covered. Most of the time, this can be avoided by reading your contract and making sure you have a thorough understanding of your policy.

Where To Buy An Extended Car Warranty

You have several options if you decide to purchase extended coverage. If you are buying a new car, it’s almost a guarantee that you will hear a pitch for extended protection plans at the dealership. Manufacturer-backed plans are usually only available at the dealership. However, there are several reputable companies that offer affordable comprehensive vehicle service contracts.

Extended Factory Warranty

If you decide to go this route, be wary of including the coverage with your car loan. This might not be a good idea for multiple reasons:

• You will likely pay interest on the service plan. Even if the company offers zero-percent interest for a short time, you will eventually pay interest.
• You raise your loan-to-value ratio. You might end up owing more than your car is worth.

If you want to purchase an extended warranty from a dealer, consider paying for it upfront instead of including monthly payments with your loan.

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CARCHEX has five customizable extended warranty plans, excellent customer service, and great added perks. We recognize CARCHEX as the Best for Used Cars.

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Extended Car Warranty Companies

Another option is to purchase an extended warranty from a third-party provider like Endurance. Here are a few benefits of third-party warranties:

• Can choose your preferred repair shop
• Low deductibles and affordable plans
• Additional perks, such as roadside assistance and towing
• Ability to shop for the best coverage and price
• Can choose the coverage that best fits your vehicle
• Can purchase at any time

How Much Do Extended Car Warranties Cost?

The price depends on several factors, but based on our research, the average extended car warranty costs between $1,600 and $4,500.

When determining the pricing of extended auto warranties, warranty providers look at several factors:

• Type of vehicle: Driving a luxury model or sports car might raise the rate because the parts are more expensive.
• Vehicle condition: The year and mileage of your vehicle are important. For many manufacturer’s warranties, an inspection must also take place before coverage begins.
• Type of coverage: Bumper-to-bumper coverage is going to cost more than simple powertrain coverage. In addition, the longer the coverage term, the higher your bill will be.
• Deductible: Some plans have the option of a $0 deductible, but that will raise the price of your warranty. If you can afford to pay a $100 or $200 deductible with each repair, you can lower your premium significantly.

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Extended Auto Warranty: Conclusion

In this article, we explained what an extended car warranty is, the pros and cons of a vehicle service contract, what is covered by an extended auto warranty, and the average cost of vehicle repairs compared to the cost of extended warranty premiums. Extended car warranties offer drivers peace of mind and save them money on costly repairs. We recommend shopping around and getting at least three different quotes from third-party warranty companies, specifically Endurance, CARCHEX, and CarShield.

Reputable Extended Car Warranty Companies

We recently reviewed the best extended warranty companies in the industry, and in our research, these few providers came out well ahead of the rest. If you want to get quotes from a few companies to help you decide whether extended car warranties are worth it, these companies are a good place to start. Each extended warranty comes with its own terms and conditions. That’s why it’s essential to read through a contract’s fine print carefully to understand what’s included with your coverage.

Click below to get free, no-obligation quotes:

Endurance: Best Coverage

Instead of being a warranty broker and finding the best rate for you among partner warranty administrators, Endurance sells its own contracts. With Endurance, you’re working directly with the warranty administrator, so this is a great choice for car owners who don’t want a middleman.

Endurance has been around for more than 10 years and is backed by an AM Best A-rated company. By working with this direct provider, you may experience a quicker claims process, and you won’t ever have to wonder who to call.

Endurance Car Warranty Plans

Endurance offers six auto warranty plans:

• Supreme: Bumper-to-bumper coverage
• Superior: Coverage for hundreds of components
• Secure Plus: Vital car component coverage, plus brakes, steering, and electrical components
• Secure: Vital car component coverage
• Select Premier: Basic powertrain warranty for high-mileage vehicles
• EnduranceAdvantage™: Covers mechanical breakdowns as well as maintenance

When you purchase an extended car warranty from Endurance, you receive one-year Endurance Elite Benefits. The membership grants you repair financing, key fob replacement and more benefits. After the first year, you would be responsible for purchasing this membership again. With many other companies, these benefits are automatically included.

Whether you opt for the Endurance Elite Benefits or not, you’ll still receive 24/7 roadside assistance, trip interruption coverage, and rental car reimbursement for the duration of your Endurance contract. Endurance also has a 30-day money-back guarantee if you are not satisfied with your coverage.

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Reputable extended car warranty company that offers six levels of coverage and has excellent customer reviews. It is our choice for Best Coverage and our top overall pick for extended warranty providers.

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CARCHEX: Best For Used Cars

CARCHEX is our choice for used cars based on the company’s offerings for high-mileage vehicles. CARCHEX also has a strong reputation, dedication to customer service, and added benefits like roadside assistance. With a history going back more than 20 years, CARCHEX is well known in the industry and has an A+ rating and accreditation from the Better Business Bureau (BBB).

CARCHEX Coverage Plans

With CARCHEX, you have the choice of five customizable extended warranty plans:

• Titanium: Similar to a bumper-to-bumper warranty. Coverage for up to 10 years
• Platinum: Covers hundreds of components for up to 10 years
• Gold: Comprehensive coverage for vehicles with more than 60,000 miles for up to 10 years
• Silver: Covers essential systems for high-mileage vehicles for up to seven years
• Bronze: Basic powertrain protection for any vehicle for up to six years

Additionally, the provider offers the following benefits:

• Claims paid directly to the repair facility
• 24/7 roadside assistance
• Towing and rental car reimbursement
• Trip interruption service

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CarShield: Best Value

The most popular extended warranty company by far, CarShield has protected more than one million vehicles since opening its doors in 2005. It has a 4.1 out of 5.0-star rating on Google based on more than 8,000 reviews. CarShield is endorsed by Ernie Hudson and Adrienne Janic and has had featured spots on CNN, ESPN, and HGTV.

CarShield Coverage Plans

With CarShield, you have the choice among six customizable warranty coverage plans:

• Diamond: Bumper-to-bumper coverage
• Platinum: Comprehensive plan for high-mileage vehicles
• Gold: Powertrain coverage, plus protection for the air conditioner and starter
• Silver: Basic powertrain coverage
• Aluminum: Covers expensive electronics in modern cars
• Motorcycle and ATV: Covers specialty vehicles like motorcycles and all-terrain vehicles

Other benefits to using CarShield include:

• Towing and roadside assistance
• Claims paid directly to the repair shop
• Rental cars included with some plans

Best Value 4.2/5 Plans as low as $99 per month

CarShield offers six distinct plans, low or $0 deductibles, and multiple payment options, making it our choice for Best Value among extended warranty providers.

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Methodology

In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of extended auto warranty companies to formulate rankings of the best providers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.

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