What is the rule of thumb for extended warranty?
An extended warranty price represents a percentage of the total product cost. As a general rule of thumb, you shouldn’t spend more than 30% of the product cost on a product warranty. The average cost of an extended auto warranty is about $90 per month, though rates vary based on your car’s age, mileage, make, and more.Based on this data, extended auto warranties cost an average of $1,297 per year across providers, plans, coverage options and vehicles. We also surveyed 1,000 extended auto warranty owners in January 2025. The majority of respondents, 70%, paid between $500 and $2,500 in total for an extended warranty plan.Today, extended warranties represent a global industry worth over $120 billion annually, with profit margins that frequently exceed 50%. For many retailers, these warranties have become more profitable than the actual products they’re designed to protect.Extended warranties for cars over 100,000 miles cost $136 per month or $1,398 per year of coverage on average.
Is it worth paying for an extended car warranty?
An extended warranty provides an added layer of financial protection beyond the manufacturer’s warranty, potentially sparing you from unforeseen repair expenses down the road. It can offer peace of mind and financial security, particularly for those dealing with mechanical and electrical failures. Once your CPO Limited Warranty expires, the CPO Extended Limited Warranty offers up to 2 additional years (unlimited miles), providing the same comprehensive coverage. For additional details, contact your local Mercedes-Benz dealer.Extended warranties can offer peace of mind, functioning as a safety net for certain purchases. However, many products are reliable, so the cost of an extended warranty might outweigh the benefits.Instead of buying a bunch of extended warranties that you’ll probably never use, you’re better off self-insuring by paying yourself the warranty payments. That way, if your TV does break after the normal warranty, you have the money saved to fix it. If not, it’s your money to keep. It’s a win-win!The Mercedes-Benz Extended Limited Warranty offers additional coverage with term options for up to three years after the original New Vehicle Limited Warranty expires. Put your trust in us. To purchase the Extended Limited Warranty or to learn more, please visit an authorized Mercedes-Benz dealership.
Is it smart to buy extended warranties?
Extended warranties are great for people who want to be prepared for possible repairs that may be needed once the factory warranty expires. Keep in mind there is a difference between third party and factory warranties. The warranty providers design these plans to be profitable. On average, customers pay more for the policy than they receive in covered repairs. Extended warranties are rarely a smart idea, especially if it’s a used car,” according to the consumer advocates at the Public Interest Research Group.Extended warranties are great for people who want to be prepared for possible repairs that may be needed once the factory warranty expires. Keep in mind there is a difference between third party and factory warranties. In the past, we have not recommended third party warranties because they are inconvenient to use.Will an Extended Warranty Cover Engine Repairs? Yes. Powertrain warranties cover the engine and all of its related components, such as the cylinder block, valvetrain, and other internal mechanisms.Many extended warranty companies negotiate discounted repair rates with service providers. This means they pay less for repairs than a customer would if they paid out of pocket, further increasing their profit margins.
Do extended warranties cover maintenance?
An extended warranty or service contract on your vehicle pays the costs of some repairs, above what the manufacturer’s warranty covers or after the manufacturer’s warranty ends. Extended warranties and vehicle service contracts typically exclude routine maintenance such as oil changes and tire replacement. Whether you have an extended warranty or a vehicle service contract, you typically have two options—transfer the coverage to the new owner or cancel it for a prorated refund.Contact a Dealership Directly With your VIN and odometer reading in hand, contact your dealership to see if the car still has warranty coverage. You can call, visit or email any dealership of your car’s manufacturer. It doesn’t have to be the place where you bought the vehicle.
Can I get my money back from an extended warranty?
Like most goods and services, extended warranty policies can come with the option of getting refunds. However, extended warranties — especially automobile extended warranties — are unique entities and, as such, have unique characteristics regarding when and how refunds are available. Like most insurance policies, an extended warranty is something you pay for in the hope that you’ll never need to use it. For many owners, it’s worth paying the price for peace of mind; even if your car is built by a brand renowned for its reliability, there’s always a risk that something could go wrong.Once the transfer is complete, the new owner can enjoy the benefits of the extended auto warranty. This is a significant advantage for buyers because it protects them from unexpected repairs and the costs of mechanical breakdowns.When you purchase an extended warranty, it covers the costs of labor and repairs when an unexpected breakdown occurs for covered parts and components. Extended warranties are great for protecting your wallet and avoiding high repair costs.They typically don’t cover damage that may occur in an accident or normal wear and tear to the vehicle. An auto service contract or extended warranty is not a warranty as defined by federal law, because you buy it separately; it’s not included when you buy a car.
Can I buy a Mercedes extended warranty later?
Additionally, you can purchase Mercedes-Benz Extended Limited Warranty coverage at any time prior to the expiration of your original New Vehicle Limited Warranty. Once that warranty ends, the Mercedes-Benz certified pre-owned limited warranty kicks in, offering you a 12-month, unlimited-mile warranty covering the engine, powertrain, suspension, steering, climate control, electrical system, audio and navigation system, brakes (but not wear items like pads and rotors), and more.Mercedes-Benz new and demonstrator vehicles first registered on or after 1 March 2020 receive a 5 year Warranty period. If you purchased a Mercedes-Benz prior to 1 March 2020, you will have a 3 year warranty. We can extend car warranty coverage on selected Mercedes-Benz vehicles for an additional three years.A Mercedes-Benz Extended Warranty will help to provide you with cover against unexpected mechanical or electrical failure. As a result, the policy is also sometimes known as mechanical breakdown insurance (MBI).Mercedes-Benz Extended Warranty Protections Honored at more than 350 authorized Mercedes-Benz dealerships. New Vehicle Warranty.