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What Does an Extended Car Warranty Cover?
An extended auto warranty covers repairs and replacements for your car’s systems and parts. Exactly which systems and parts this includes is determined by your contract and the level of coverage you choose.
In general, extended warranties either are comprehensive and cover almost everything, or they cover the most important system—the powertrain.
What’s important in your extended warranty coverage is that it includes repairs and replacements that happen due to normal, everyday use. This is different from your new car warranty, which likely only covered breakdowns due to faulty factory parts or workmanship error.
Normally, extended warranties don’t cover the cost of regular maintenance, such as oil changes, new tires, tire rotations, inspections, new filters, and windshield wiper replacements.
Why Purchase a Car Warranty?
- Save money. Did you know the cost of an extended warranty is cheaper than many common car repairs?
- No surprise repair costs. Breakdowns rarely happen at a convenient time. An extended car warranty allows you to be financially prepared.
- More life out of your car. People often drive their cars longer than manufacturer warranties last. An extended warranty protects you for years to come.
- Peace of mind. Knowing you’re covered and not having to stress out-of-pocket repairs put your mind at ease.
Are Extended Car Warranties Worth It?
The average car owner keeps their vehicle for 6.5 years, but many factory warranties only last for three years, meaning that without an extended warranty, your car is unprotected for more than half of its life. What’s more, extended car warranties pay for themselves after just one major repair. An extended car warranty has the potential to save you a lot of money. Ultimately, the value of an extended warranty depends on the reliability of your car and the cost of its repairs. You can review the many extended car warranty plans here, to find the best value that suits your specific needs.
How Long Does a Car Warranty Last?
New car warranties vary depending on the make of your car, but they typically last between three and five years, or between 36,000 and 60,000 miles. If you need repairs after three years, you’ll have to foot the bill yourself—unless you’ve purchased an extended car warranty. These service contracts can last for up to 10 years, depending on the provider and plan you choose.
How Does an Extended Warranty Work?
An extended warranty works like an insurance policy for your car. You pay a small, known amount up front and are protected against expensive surprise repairs in the future.
Let’s say you purchase an extended warranty and then experience a breakdown. What are your next steps?
- The first thing you’ll do is gather your warranty documentation and get an estimate for the repair from an approved auto shop.
- Next, you’ll submit a claim to the warranty company. They will confirm whether the repair you need is covered. The warranty company will also tell you if they’ll pay for the repair directly, or if you’ll pay the bill and get reimbursed. This depends on your specific warranty.
- Then, you can take your car in for the repair, same as always—except you’ll have peace of mind that it’s covered and your budget will remain intact. Your provider may even cover rental car expenses, if necessary.
Keep all of your car’s service records and receipts. They prove that you’ve taken good care of your car, so when you file a claim, the warranty company will know your repair isn’t due to misuse.
What Do Extended Auto Warranties Cost?
The cost of an extended auto warranty can be based on these factors:
- Your car’s age
- Your car’s mileage
- Level of coverage
- Your driving habits
- Your provider
How Much Can I Save with an Extended Warranty?
It’s no secret that the cost of auto repairs really adds up. In fact, the average annual cost of owning a car is $8,469, according to AAA.
We selected a few common car repairs and found what they cost. With an extended warranty, these repairs could be covered and save you hundreds of dollars.
| Car Repairs | Average Cost | Cost with Extended Warranty |
|---|---|---|
| Alternator replacement | $500–$1,000 | $0 |
| Fuel injector replacement | $1,009–$1,416 | $0 |
| Steering column replacement | $450–$1,100 | $0 |
| Starter replacement | $389–$562 | $0 |
| Radiator replacement | $300–$1,200 | $0 |
Types of Car Warranty Plans
When shopping for an auto warranty and comparing plans, you’ll see different terms and types of warranties that all cover different parts of your vehicle. Here’s an overview of the most common types of auto warranty plans.
Bumper-to-bumper Warranties
Bumper-to-bumper warranties cover all vehicle mechanical systems, except for a few items explicitly listed as non-covered. Bumper-to-bumper warranties typically offer excellent coverage, and include a lot of repairs other warranties don’t.
Powertrain Warranties
The powertrain is what makes your car run and includes the engine, transmission, front and rear drive systems, and related components. This warranty covers the cost to repair or replace these parts should they malfunction. A powertrain warranty covers fewer parts of your car but usually lasts longer than other types of warranties.
Wear-and-tear Warranties
Most manufacturer warranties don’t cover repairs required due to the natural wear and tear of driving—but good extended warranties do. Wear and tear coverage means that if a part of your car deteriorates from normal, everyday use, its repair or replacement could be covered.
Maintenance Plans
A maintenance plan is similar to a prepaid service plan, but with more coverage. Like a service plan, it covers routine oil changes, inspections, and basic maintenance labor and parts.
But unlike a service plan, this type of warranty also covers some auto parts that deteriorate with natural wear and tear—things like fuses, lights, and brake pads.
It’s important to note that tires are covered in a separate warranty that comes directly from the tire manufacturer, so they typically aren’t covered in a maintenance plan.
Emission Warranties
According to the EPA, emission control warranties protect you from the cost of repairs for emission related failures that are beyond your control. Manufacturers are required to provide broad emission warranty coverage for cars younger than five years old or that have less than 50,000 miles (whichever comes first). If your car was made after 1972, the emissions warranty information will be in your owner’s manual.
Factory Accessory Plans
These plans are extended coverage specifically for factory accessories. Examples of factory accessories include alloy wheel locks, protective paint films, illuminated door sills, and tablet holders.
Rust or Corrosion Warranty
A rust or corrosion warranty (sometimes called an anti-perforation warranty) covers any repairs required due to rust-through problems. If you live in the north where streets are often salted in the winter, or by an ocean where rust damage is common, this type of plan could save you a lot of money.
Key Takeaways
An extended warranty can save you thousands of dollars in unforeseen repair costs. If a $1,500 car repair would add financial strain to your monthly budget, the cost of a warranty may be easier to manage and provide peace of mind.
Buying an extended warranty from a third-party provider tends to be less expensive than an extended warranty from the manufacturer.
There are tons of extended warranty plans with varying levels of coverage. Compare plans to find one that’s just right for your needs and your budget
