What You Need to Know About Extended Car Warranties

Erin Gobler
Written byErin Gobler
Erin Gobler
Erin Gobler
  • 5+ years of finance writing experience 

  • Certificate of financial planning from Boston University

Erin is a personal finance writer and journalist with work featured in major publications. Her writing explores investing, credit cards, mortgages, insurance, and more.

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Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

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Updated February 9, 2023 at 11:00 AM PST

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When you buy a new vehicle, you’ll usually get a manufacturer’s warranty that will cover many things that could go wrong in the first few years. But if your car’s warranty has expired or you’re buying a used car that doesn’t come with a warranty, you’ll be on the hook for those expenses.

An extended warranty can provide some additional protection and pay for things that go wrong if your factory warranty has expired or doesn’t cover the issue. But extended car warranty types differ, and some come with high price tags.

What is an extended car warranty?

An extended warranty — also known as a vehicle service contract — is an optional coverage that can help pay for vehicle repairs.[1]

Manufacturers, dealerships, and third-party providers often offer extended car warranties that you can purchase when you buy a new car. You can also purchase vehicle service contracts on used cars.

Your extended warranty may work differently depending on the provider. But generally speaking, each warranty has a list of what it covers. If something goes wrong during the warranty period and you need to make a claim, you may need to pay a deductible.[1] Some warranties may also require you to pay for the cost of repairs up front, then get reimbursed later.

In addition to the warranty agreement listing what is covered, it may also include a list of repairs and expenses that won’t be covered.

Good to know

A deductible is an amount you’ll have to pay out of pocket before your insurance coverage or extended warranty will begin to pay for a covered event.

What do extended car warranties cover?

The exact coverage you’ll have with your extended warranty depends on your policy. A warranty you purchase from your vehicle’s manufacturer might differ somewhat from one you purchase from a third-party company.

Extended car warranties commonly provide powertrain coverage, which covers the essential systems in your car, including the engine, transmission, driveshafts, and more.

Some policies also cover almost every part of your vehicle, including everything provided with powertrain coverage, as well as your heating and cooling systems, electrical systems, safety features, and more.

Vehicle manufacturer service contracts may be identical to — or at least more closely resemble — the original manufacturer’s warranty. But regardless of where you purchased your policy, coverage may depend on you keeping up with regular vehicle maintenance.

Some extended car warranties may also come with extra perks such as roadside assistance, rental car reimbursement, and trip interruption coverage.

What do extended car warranties not cover?

Extended warranties don’t usually cover routine maintenance or regular wear and tear. For example, you shouldn’t expect to have coverage for oil changes, tire rotations, brake pad replacement, or similar maintenance.

An extended car warranty typically doesn’t cover things that your auto insurance policy covers. For example, if you’re in an accident or your car is damaged in a storm, you wouldn’t file the claim with your warranty provider. Instead — assuming you have comprehensive and collision coverage — you would file it with your auto insurance company.

Extended warranties may also exclude damage caused by modifications to the vehicle, failure to properly maintain your vehicle, and interior damage.

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How long do car warranties last?

When you buy a new vehicle, you’ll usually have a factory warranty that covers certain repairs for the first three years or 30,000 miles, but it depends on the car manufacturer. Once your factory warranty expires, you might purchase an extended warranty to further protect your vehicle.

An extended car warranty can last anywhere from just a year or two to as many as 10 years. The length of your warranty often depends on the type of coverage. Powertrain warranties might be active for as long as 10 years, while bumper-to-bumper warranties might be considerably shorter.

In many cases, a warranty will cover up to a certain number of years or a certain number of miles, whichever comes first. So if you put a lot of miles on your car, your extended warranty may expire before it would for someone who drives fewer miles.

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How much do extended car warranties cost?

The cost of an extended car warranty can range from just a couple of hundred dollars to several thousand dollars.[1] Factors that can affect your policy’s cost include the type and age of the car you drive, the type of coverage you’re purchasing, and the length of your coverage.

An extended warranty could cost $500 if you just drove off the lot, while a similar car that already has 30,000 miles on it might necessitate a cost closer to $1,800, according to warranty company Protect My Car. In addition to the cost of the policy, many extended warranties also require a deductible when you file a claim, which could be around $100.

When considering whether to purchase an extended warranty, you have to factor the cost into the other costs associated with owning a car, including your monthly car payment and your auto insurance policy.

Types of extended car warranties

Several types of extended car warranties are available. Some are comprehensive and cover nearly every system in your vehicle, while others are far more specific.

Powertrain warranty

A powertrain warranty is one of the most common options available and provides fairly basic coverage. This type of vehicle service contract covers only the most important parts of your car. Covered parts include:

  • Engine

  • Transmission

  • Transfer case

  • Driveshafts

  • Axles

  • Seals

  • Gaskets

Powertrain warranties often last around five years, but some plans can last as long as 10 years.

Bumper-to-bumper warranty

A bumper-to-bumper warranty is the most comprehensive type of extended warranty. As the name suggests, it’s designed to cover everything from your front bumper to the back.

A bumper-to-bumper warranty likely covers everything a powertrain warranty would cover. It also covers other major systems within your vehicle, such as your heating and cooling system, electrical systems, steering system, brakes, safety features, and more.

Bumper-to-bumper warranties don’t generally last as long as powertrain warranties. While it’s not uncommon for companies to offer powertrain warranties for up to 10 years, most bumper-to-bumper warranties are good for four or five years.

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Compare Car Insurance by Coverage

Dealership warranty

A dealership warranty is an extended warranty that comes from the dealership where you buy the car. Dealership warranties generally come with the same coverages as those you’d purchase from the manufacturer or a third party.

Buying your extended warranty from the dealer has some advantages. It’s convenient since you’re already at the dealer to buy a car. You may also be able to wrap the cost of the warranty into your vehicle financing.

That being said, dealership warranties can also be more expensive than those that other providers offer. And you may find yourself convinced by a pushy salesman before you have a chance to shop around.

Manufacturer’s warranty

Like dealerships, vehicle manufacturers also offer extended car warranties. Like other providers, manufacturers may offer powertrain warranties, bumper-to-bumper warranties, and other coverage options. And because you’re getting the extended warranty from the same provider as the original factory warranty, the coverage is more likely to be similar (if not identical).

It’s worth noting that manufacturers sometimes require that you stick to your vehicle’s maintenance schedule for the warranty to remain valid. Additionally, you may have to visit the dealership or a specific repair shop when you need work done.

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Rust and corrosion warranty

A rust and corrosion warranty — as the name suggests — is designed to cover rust and corrosion on your vehicle. This type of coverage can pay for surface damage to the vehicle, as well as more serious damage to the metal.

Rust and corrosion coverage is less common, and not everyone needs it. You may want this kind of warranty if your vehicle is frequently exposed to certain environmental factors, like snowstorms and road salt. However, this type of plan may also cover corrosion that occurs after an accident.

Emissions warranty

An emissions warranty is a type of vehicle warranty that can pay for repairs to your vehicle if it fails an emissions inspection. Not everyone needs this type of policy since not all cities and states require emissions or smog testing.

An emissions warranty covers systems and parts that bumper-to-bumper or powertrain warranty plans may not cover. Covered components include catalytic converters, onboard emissions diagnostic systems, and electronic emissions control units.[2]

Extended car warranties vs. mechanical breakdown insurance

Mechanical breakdown insurance (MBI) is a type of policy some auto insurance companies offer. It pays for repairs when your car breaks down. Some customers may use mechanical breakdown insurance as protection after their vehicle’s factory warranty has expired. However, some people may also carry both coverages at the same time for more protection.

Like an extended warranty, mechanical breakdown insurance won’t cover regular maintenance or wear and tear on your vehicle. However, it does cover many of your vehicle’s systems and parts.

Mechanical breakdown insurance typically lasts for a year, then you renew your policy, much like standard car insurance. However, insurance companies may deny coverage to older cars, while you can buy extended warranties for used cars. But the main difference is that you buy MBI from your auto insurance company rather than a dealership, manufacturer, or third party.

Extended car warranty FAQs

Here are answers to some commonly asked questions about extended car warranties.

  • Is it worth getting an extended warranty on a car?

    Whether an extended warranty is worth it for you depends entirely on your situation. These protection plans can be expensive, especially if you want a longer-term policy or one with more comprehensive protection. They also don’t cover every repair you might need.

    On the other hand, if you happen to need a repair that would be extremely expensive, the warranty can absolutely be worth it.

  • What is the average cost of an extended car warranty?

    Extended car warranty costs tend to range from a couple hundred dollars to thousands of dollars. Most warranties cost between $1,500 and $2,000. You might pay a few hundred dollars for a shorter-term warranty on a new car and closer to $2,500 for a longer-term warranty on a car that already has some miles on it.

  • What does an extended warranty cover on a car?

    Some extended car warranties cover just the powertrain systems, such as the engine and transmission, while others are designed to cover all the systems in a car. Warranties like a rust or corrosion warranty are designed to cover a very specific type of damage.

  • Can you buy an extended warranty later?

    You can usually purchase an extended warranty at any time. However, the cost will generally be lowest if you purchase it before your factory warranty has expired. In fact, waiting to purchase a warranty rather than buying the warranty from the dealer when you buy a car can give you a chance to shop around. But some warranty companies have limits on the age and miles of vehicles they’re willing to cover.

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Methodology

Insurify data scientists analyzed more than 90 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 50+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.

Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).

Liability-only premium averages correspond to policies with the following coverage limits:

  • Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
  • Property damage limits between $10,000 and $50,000
  • No additional coverage
Full-coverage premium averages correspond to the same bodily injury and property damage limits in addition to:
  • Comprehensive coverage with a $1,000 deductible
  • Collision coverage with a $1,000 deductible

Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.

Sources

  1. Federal Trade Commission. "Auto Warranties and Service Contracts." Accessed February 3, 2023
  2. North Carolina Consumers Council. "The Federal Emissions Warranty is Often Overlooked When Your Vehicle Needs Emissions Fixes." Accessed February 3, 2023
Erin Gobler
Erin Gobler

Erin Gobler is a personal finance writer and journalist based in Madison, Wisconsin. With more than five years of experience, Erin has covered topics such as investing, credit cards, mortgages, insurance, and more. Her work has been featured in major publications like Business Insider, Fox Business, and Time. Erin received her bachelor’s degree from the University of Wisconsin-Oshkosh in 2013, studying journalism and political science. She also received a certificate of financial planning from Boston University in 2022.

Courtney Mikulski
Edited byCourtney MikulskiSenior Editor, Auto
Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

Featured in

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