Does an extended warranty on your car worth the cost? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make better financial decisions by offering interactive financial calculators and tools as well as publishing objective and original content, by enabling you to conduct your own research and compare information for free to help you make informed financial decisions. Bankrate has agreements with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The offers that appear on this site are from companies that pay us. This compensation can affect the way and when products are listed on this site, including, for example, the order in which they appear within the listing categories, except where prohibited by law for our mortgage and home equity products, as well as other home loan products. However, this compensation will not influence the content we publish or the reviews that you see on this site. We do not contain the universe of companies or financial offerings that could be accessible to you. Aaron Greene/Getty Images
3 minutes read. Published November 28, 2022
Jackie Lam Written Jackie Lam Written by Contributing writer Jackie Lam is a contributing writer for Bankrate. Jackie writes about auto loans. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since the end of 2021. They are committed to helping readers gain the confidence to take control of their finances by providing clear, well-researched information that breaks down otherwise complex topics into manageable bites. The Bankrate guarantee
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We are compensated for placement of sponsored products and, services, or when you click on certain links posted on our site. So, this compensation can impact how, where and in what order products appear within listing categories and categories, unless it is prohibited by law. We also offer mortgage home equity, mortgage and other products for home loans. Other factors, such as our own rules for our website and whether a product is available within your region or within your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide an array of offers, Bankrate does not include specific information on every financial or credit service or product. A car warranty extension can help you avoid financial strain in the event that your vehicle needs unexpected repairs. However, is an extended car warranty worth it? This largely depends on the details of the warranty and your requirements. How much does an extended warranty for your car cost? When you think about extended car warranties, cost is a major aspect. Extended warranties vary in cost in a range of $0 to $1000 per year. The price tag hinges on a handful of factors, such as the service supplier. What’s covered under your current warranty. The model, make and year of your vehicle. Your car’s mileage. What you live in and how much you travel. Cost of replacing components and labor. Discounts you can claim. Other factors that impact the cost of an extended car warranty include the extent of coverage, the amount of coverage, and the deductible. The greater your deductible, the less the coverage’s cost. However, more deductible you have, the higher your premium. Keep in mind that if you are paying for your extended warranty with an auto loan, you will be paying not only for the warranty, but also interest on the amount. What will an extended warranty provide? An extended warranty for your vehicle usually covers unexpected, expensive repairs involving key systems of the vehicle, such as heating/air, the engine and brakes. The exact coverage you receive will depend of the type of warranty that you buy, and may include either labor or parts. Certain extended warranties provide coverage for roadside assistance, tires , and any other costs related to the vehicle that you could experience. Extended car warranty drawbacks While an extended warranty for your vehicle could possibly help you save the cost of expensive repairs, let’s take a look at some of the cons that could be associated with purchasing one. Not all repairs are covered Because an extended car warranty usually matches the new car’s warranty. It also reflects the limitations such as mileage and what repairs are included. Check the fine print as well as the exclusions list when determining if the coverage offered is worth the price. There’s a time limit Extended warranty on cars are only valid for the period of the extended warranty. For instance, it might extend the original warranty by the amount of two years, 24,000 miles. If you had a warranty that was three years and 36,000 miles, that would mean the full warranty lasts five years and 60,000 miles. You may not want to use it. In the case of those who did sign on an extended warranty only 45 percent of them tapped to their warranty’s extended period, as per a . The remaining 55 percent did not. People who bought one and used it experienced an overall cost of over $375. It’s possible that you don’t need it in the first place Check the track record of the vehicle you want to buy by conducting your researchand looking at car reviews, recommends Renee Valdes, senior advice editor at Kelley Blue Book. “If the car is marketed as having a look at it carefully before signing to an extended warranty,” says Valdes. That money could be used for. Savings for emergencies can be used to be used to pay for any repair on a car and not only repairs which are covered under the extended warranty as there’s not an expiration date. If it’s logical to purchase an extended car warranty An extended car warranty is only beneficial only under certain conditions. Extended warranties may be beneficial for those who are planning to drive their vehicles for a long time beyond bumper-to-bumper and powertrain warranties, Valdes adds. “There’s nothing more frustrating than being confronted with a large cost for a damaged item on your luxury vehicle when there’s no warranty that covers the damage,” says Valdes. If your manufacturer’s warranty is over then it could be a good idea to hop into an extended car warranty. Manufacturer warranting information is on the label on the vehicle’s window. If you can afford to purchase a warranty, it can help to cover repairs that are covered. It’s beneficial to find out what the costs is covered in the initial few years after purchasing. To avoid costly repairs, stay on top of your car’s maintenance. “It’s always best to keep up with car maintenance so your overall repair costs are low for the duration of your ownership of your vehicle,” says Valdes. The bottom line An extended car warranty is not an option for everyone. To see whether an extended warranty is worth the cost, do your homework and request a few quotes. Learn about the repairs your vehicle may require in the coming years and check to see if they’re covered under a particular warranty.
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Written by a contributing writer Jackie Lam is a contributing writer for Bankrate. Jackie is a writer on auto loans. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are passionate about helping readers gain confidence to control their finances by providing clear, well-researched details that cut otherwise complex topics into manageable bites.
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