Is it a good idea to purchase an extended warranty?
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. 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.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.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.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 are two reasons not to buy an extended 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. Manufacturer’s warranty: Components still under the manufacturer’s or supplier’s warranty at the time of breakdown may not be covered by the Extended Warranty. Service and maintenance items: Routine service items like oil, filters, and spark plugs usually aren’t covered. These are considered regular maintenance costs.Changing your own oil won’t directly void your car manufacturer’s warranty. However, the manufacturer won’t cover the repairs if you damage your car while trying to change your own oil. If you’re going to do your own oil changes, use the type of oil recommended by the car manufacturer.The short answer to this question is yes: Some oil leaks are covered under warranty. The longer answer is that it depends on the coverage, the cause of the leak, how long it has been going on and related failures. In some cases, a leak would be covered if another issue caused it — but not always.
How much should an extended warranty cost?
The average monthly extended car warranty cost in the united states ranges from $125 to $325. Annually, you can expect to pay between $1,500 and $4,000 for coverage. Some vehicle owners choose to pay the full price upfront, while others prefer having a low monthly payment. Average cost of an extended warranty the cost of extended car warranties typically start around $1,000 per year, but costs can climb well beyond $4,000 for comprehensive plans—especially for high-mileage or luxury vehicles. More basic coverage may come at a lower price, but the trade-off is often fewer covered repairs.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.Extended warranty providers should be willing to give you specific information about the extent of coverage for each plan they offer. Even basic coverage can include a long list of components that are covered. Compare the specifics of the plans you’re considering to find one that matches your needs.Extended warranties offer peace of mind by providing additional coverage beyond the manufacturer’s warranty. They can be particularly beneficial for vehicles, where expensive repair costs can quickly add up.
How long do extended warranties last?
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. 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 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.Consider how long you plan to keep the vehicle. Then have a mechanic inspect the vehicle you’re interested in and draw up an estimate for any problems that may need fixing down the road. If the vehicle isn’t very reliable or prone to specific types of issues, an extended warranty is worth considering.If you are looking to trade-in or sell the car you currently own before the extended warranty has expired, then don’t worry you are able to get a pro-rated refund for the amount of that unused warranty if you have purchased a refundable warranty.
Is extended warranty a ripoff?
While a service contract might sound like a good idea, it could duplicate coverage you have through your manufacturer’s warranty. And you might actually pay more for a service contract than you get back in benefits. What’s more, some companies pitching warranty extensions are scammers. 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 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.The best coverage can save car owners money in the long run by preventing costly trips to the repair shop due to unexpected mechanical breakdowns. An extended auto warranty may be especially useful for high-mileage vehicles if potential repair bills are greater than the cost of a used car warranty.In addition to warranties on parts, some warranties also cover the labor costs associated with replacing a defective engine. This type of warranty ensures that if the replacement engine fails due to a covered issue, you won’t have to pay for labor to have it replaced again.
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. If you’ve decided that the extended car warranty you’ve purchased through your dealership isn’t the right fit for you, In most cases, you can cancel your warranty contract with just a few simple steps. However, the cancellation process varies based on the provider.An extended car warranty may help cover the cost of certain repairs to your vehicle when the manufacturer’s warranty expires, but they’re not for everyone. While it may sound like a good idea in theory, extended warranties often come with a high price tag and don’t necessarily cover everything that could go wrong.As for transferring an extended warranty when you sell your car, often, these warranties are transferable. However, there is almost always a transfer fee.Negotiate the Price: Extended warranties are often negotiable, so don’t hesitate to ask your dealership if there’s room for a better deal. If you’ve received quotes from other dealerships, you can use those as leverage to negotiate a better price.How to get your money back. You can cancel an extended warranty at any time and you’ll get a prorated refund for the unused portion of your policy. If the warranty was included in your loan, your car payment won’t drop, but you may pay off the car sooner after the refund is deducted from your balance.