Is it worth extending a warranty?
Key Takeaways. Extended warranties offer protection beyond the standard warranty. The likelihood of needing an extended warranty is low, especially if the product is durable and reliable. The cost of an extended warranty may be more than the cost of repair or replacement of the product. If you do want to buy an extended warranty, be sure to purchase one from a company with a long history, such as through an automaker, and understand the small print. There are often many restrictions with extended warranties, including what’s covered and where the vehicle can be serviced.You can purchase an extended warranty when you purchase your vehicle or at a later time. The major benefit of purchasing it when you buy the car is the ability to add the purchase price into your total amount financed.Extended warranty plans typically cover your vehicle anywhere from 2 to 7 years. If you expect to keep your car for several years, a longer plan may make sense for you. Even if you do sell your car before the warranty runs out, your extended protection plan may be transferable.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.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.
Can I buy an extended warranty after my warranty expires?
All About Extended Warranties The initial car warranty is built into the cost of a new car. But after your initial car warranty has expired, it’s possible to buy additional coverage in the form of an extended warranty. These are also sometimes called service contracts. How to buy an extended car warranty. You can buy an extended car warranty from your dealer or car manufacturer when you purchase a new car or any time before the car’s standard warranty expires. Make sure you understand which parts are covered and for how long before you buy an extended warranty.Ultimately, a car extended warranty offers vehicle protection and can keep you from paying out-of-pocket for unexpected and costly car repairs. When purchasing an extended auto warranty, you have two options: buying from a dealership or a third-party provider.An extended warranty can provide many benefits, including financial coverage and peace of mind, should something go wrong with your vehicle. If you are considering the purchase of an extended warranty for your used car, it is possible to negotiate with the dealer for the best price and the warranty coverage you need.The average total cost of the best extended car warranty plans costs anywhere between $1,500 and $4,000, but your exact cost will be based on several personal factors. Extended car warranties cover your vehicle in the event of a mechanical breakdown and help make car repair costs more predictable.
Can you negotiate the cost of an extended warranty?
Negotiating a Better Deal Speak with the finance and insurance managers, explain that you want to buy a new car and need to talk to them about the factory extended warranty on the vehicle. You may find that three different dealerships will give you three different prices on the same coverage. An extended warranty — also known as a protection plan or service contract — provides similar guarantees for even more years. These policies cost extra, may have different fine print than a manufacturer warranty and often are sold by a third party rather than the product’s manufacturer.The best way to buy an extended car warranty is through either a third-party provider or the dealership where you purchased the vehicle. Extended warranties can cost anywhere from $372 to over $2,000 per year, depending on your coverage level and vehicle, with an average annual price of $977, according to our research.Some extended warranties may cover labor expenses fully or partially, while others may only cover parts.Ways to Avoid an Extended Car Warranty Denied Claim That being said, they do happen. Sometimes it is due to a known issue on the vehicle that the driver did not disclose. Other times, it might be something that is merely just not listed for coverage.
How to calculate extended warranty price?
Calculating the Cost Use the formula Extended Warranty Cost = (Percentage of Product Cost) × (Total Product Cost). Ensure the final cost does not exceed 30% of the product’s price, adhering to industry recommendations. Extended Price means the result of multiplying the unit price per [unit of time or item] by the estimated amount of [time or items].
Can I buy an extended warranty directly from the manufacturer?
Extended car warranties can be purchased from either your vehicle’s manufacturer or from an independent provider. Though coverage includes both parts and labor costs from repair shops, you’ll likely still have to pay a deductible on new auto claims. The cost of a Mercedes extended warranty can range from $2,400 to nearly $8,000, depending on the vehicle and plan. You can extend the factory warranty by one to three years and cover up to 75,000 or 100,000 miles on the odometer.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.CarShield plans typically cost between $110 and $150 depending on your chosen level of coverage. We found that drivers can purchase CarShield extended warranties with either set terms or month-to-month contracts.Most extended warranties cost between $1,000 and $4,000, but the cost can fluctuate depending on the type of car and its specific make and model. For example, extended warranties for older cars with higher mileage may be more expensive due to their increased risk of breakdowns.
What is a downside to purchasing an extended warranty?
Upfront Cost: Extended warranties can be expensive, and you might never use them. Weighing the cost of the warranty against the potential repair bills is crucial. Limited Coverage: Many warranties have exclusions and may not cover all types of repairs. It’s not too late to get an extended warranty on your car, even if it’s been out of warranty for years. Commonly referred to as a Vehicle Service Contract, an extended auto warranty offered by third parties is the best bet to keep out of control repair costs in check.May have coverage limitations: All extended warranties have limitations, so it’s crucial to review the terms and conditions to understand exactly what’s covered. You may realize after the fact that an expensive repair isn’t covered and will require you to pay out-of-pocket.Extended car warranties can be worth it if you have an older vehicle with a high mileage but may not be worth it if your vehicle isn’t likely to break down.Negotiating a Better Deal Speak with the finance and insurance managers, explain that you want to buy a new car and need to talk to them about the factory extended warranty on the vehicle. You may find that three different dealerships will give you three different prices on the same coverage.You can typically purchase an extended car warranty from your car manufacturer or a third party before your car reaches a certain age or mileage. Extended car warranties may also be referred to as vehicle service contracts.