Are extended warranties worth it on a car?
When are extended car warranties worth it? You might consider an extended car warranty if you’re purchasing a high-mileage vehicle. However, extended car warranties are often not worth it due to their high upfront price and coverage restrictions. 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.The short answer is “no. Mark Kotkin, Director of Consumer Reports National Research Center, says that “extended warranties tend to be a bad deal for consumers” because “most repairs do not occur during the limited time period covered by the extended warranty. Sheila Adkins, Community Outreach Manager for the Better .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.What percentage of people buy extended car warranties? About 37% of vehicle owners hold an extended warranty. Only 1 in 10, however, actually use their warranty.
What does a car warranty not cover?
A car warranty is a contract that covers manufacturer defects for a set period or mileage, but excludes normal wear, accidents, and routine maintenance. Compare the specifics of the plans you’re considering to find one that matches your needs. How long is coverage available? 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.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.Typically, the average cost of an extended warranty for a used car is around $1,000 per year, but every vehicle and contract is different. For example, some providers may require you to pay the full cost of coverage upfront, whereas others allow for monthly payments.Cons of an Extended Warranty Extended warranties require an upfront payment or are added to your financing, increasing your total cost. If you don’t end up using it, you may feel like you paid for something you didn’t need. Depending on the warranty plan, some repairs may not be included.While car insurance and extended warranties share the goal of protecting your vehicle, they serve different purposes. Car insurance is essential for addressing damages resulting from accidents and external events, while an extended warranty focuses on covering the costs of mechanical breakdowns.
What is an extended warranty in a car?
Extended Car Warranty Coverage and Exclusions Coverage. Repair or replacement costs due to mechanical or electrical breakdowns that happen after the manufacturer’s warranty ends. Covers key components such as the engine, gearbox, brakes, and electrical systems, especially when failure is due to manufacturing defects. If the idea of losing your car’s warranty leaves you worried about unexpected repair bills, an extended warranty could offer the extra security you’re looking for.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.Premier Auto Protect, CarShield, Nova Warranty, Endurance, and Fidelity are our top picks for best extended car warranties for various categories. Most vehicle service providers offer 30-day money-back guarantees if you’re not satisfied for any reason.You can also buy your extended warranty later on, so long as the car is still under the new vehicle warranty. However, buying the plan later on implies a higher cost than when buying along with the new car.Auto service contracts — sometimes called “extended warranties” — are optional contracts sold by vehicle manufacturers, dealers, or independent companies. The contract seller agrees to perform (or pay for) certain repairs or services outlined in the contract.
Is car AC covered under warranty?
Manufacturer (factory) warranty coverage: Your car’s factory bumper-to-bumper warranty will usually cover your AC compressor if you still have coverage. These warranties usually last a minimum of three years or 36,000 miles from when your car was new. Compressors are actually very dependable (lasting on average between 12-15 years) so typically, when your AC compressor has gone bad there’s an underlying cause that needs to be addressed lest the problem reemerge even after the unit has been replaced.
How much does a 5 year extended warranty cost?
The cost of your extended vehicle warranty depends on a variety of factors, like the make, model and age of your car. However, you’ll typically need to pay at least $1,000 per year of coverage, and you may need to pay as much as $3,000 per year, or even more. Many consumers and third-party companies commonly use these terms interchangeably, so we’ve done the same in this article. Extended warranties for cars over 100,000 miles cost $136 per month or $1,398 per year of coverage on average.What Is Not Covered Under an Extended Warranty. Preexisting damage: If your car is already damaged before you buy a warranty, the warranty won’t pay for repairs related to that damage. Normal wear and tear: Damage due to normal wear and tear, such as an alternator breaking down over time, may not be covered.Are any high value parts covered under the warranty? Yes. The warranty offers coverage for your car’s high value parts, including the high-pressure pump, compressor, ECM, turbocharger assembly, steering assembly, self assembly, strut, and the engine.
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 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.That’s because you can buy an extended warranty at any point before the included factory warranty expires, which means you can hang on to your money for three years and then buy an extended warranty if you decide you need one. By then, you’ll have an idea of how reliable the car has been.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.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.