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While extended warranties are a great way to protect your vehicle and your wallet, you may not be thrilled about being locked into a contract for years. Companies like CarShield offer the ability to pay as you go for extended warranty coverage. These plans give you the level of coverage you want with the flexibility to cancel whenever you no longer need it.

So, what is a pay-as-you-go warranty? We’ll explain what a car warranty is, what coverage terms mean, and how paying month to month may be the right choice for your needs. Our team has researched the best extended car warranty companies to determine which ones offer you the most flexibility.


In this article:

What Is A Car Warranty?

Generally, a vehicle warranty covers the cost of repairs and parts replacement due to mechanical breakdowns or poor workmanship. When researching car warranties, you’ll come across two main types: factory warranties and extended warranties. Factory warranties come standard with all new vehicles and last for a certain time frame or mileage limit at the beginning of a new car’s life. Extended warranties lengthen your car’s coverage and can be purchased either from your car’s manufacturer or from a third-party car warranty provider. 

If you opt for a manufacturer’s extended warranty, you must purchase it before the terms of your factory warranty expire. If you decide on an aftermarket warranty, you can purchase one from a third-party provider at any time.

How Long Does A Car Warranty Last?

A warranty’s coverage terms depend on the manufacturer or third-party provider. Most factory warranties last 3 years/36,000 miles or 5 years/60,000 miles. The coverage terms for extended warranties depend on the level of coverage you select, but some companies – like CarShield – offer vehicle service contracts that can last up to 10 years.

What Are Month-To-Month Coverage Terms?

In most cases, the warranty coverage tier you choose will dictate the length of your warranty. However, some companies, like Toco and CarShield, offer flexible contracts with month-to-month terms that can be canceled at any point. These companies have a mileage limit – Toco covers cars up to 250,000 miles and CarShield’s coverage can last up to 300,000 miles – but because you pay month to month, there is no year limit on your coverage.

Other companies have term lengths for their coverage but still operate on a pay-as-you-go model. Olive, for instance, sets a 36-month limit on coverage plans. However, these warranties can be renewed until the car reaches 185,000 miles, and you can cancel coverage at any time. 

Pay-as-you-go car warranties with month-to-month payment terms put a bit more control in the hands of the consumer. If you feel like you’ve gotten enough out of your particular plan, you have the ability to end it at any point rather than waiting until the end of your contract terms.

CarShield Extended Warranties

CarShield is the most popular extended warranty company on the market, and it’s an excellent choice if you’re looking for affordable coverage. Most CarShield plans have monthly payments of around $99, and coverage is available for vehicles up to 300,000 miles – one of the highest mileage limits in the industry. CarShield also offers pay-as-you-go contracts, meaning you have control over the length of your warranty coverage terms. 

Because of CarShield’s economical prices and month-to-month payment plans, our research team named CarShield the company with the Best Value and rated it 4.2 out of 5.0 stars overall. Find out more about the warranty company by reading our full CarShield review.

CarShield Warranty Plans

Warranties through CarShield can offer peace of mind if you’re ever faced with expensive repair bills. However, covered repairs differ based on the warranty plan you choose. Here is a list of the six coverage plans CarShield offers and what each covers:

CarShield Plan What It Covers
Diamond CarShield’s most comprehensive plan is exclusionary, meaning the components it does not cover are listed in the contract. Exclusions include wear-and-tear items, hoses, and belts.
Platinum With the highest level of stated-component coverage, the Platinum plan protects parts of the engine, transmission, electrical system, steering, and more.
Gold This enhanced powertrain warranty covers the engine, transmission, and drive axle, and adds coverage for the alternator, starter, and more.
Silver CarShield’s basic powertrain plan is the provider’s most affordable extended warranty, covering your vehicle’s transmission, drive axle, and water pump.
Aluminum Designed for luxury vehicles with complex electrical systems, the Aluminum plan covers power-seat control, voice activation control, sensors, and GPS.
                            Motorcycle and ATV CarShield offers a range of plans that cover motorcycles and ATVs.

Additional Benefits Of CarShield Extended Warranties

In addition to covering the cost of repairs and replacements, CarShield offers a few perks with every extended warranty plan. These include:

  • 24/7 roadside assistance
  • Towing
  • Trip interruption reimbursement
  • Rental car reimbursement
  • Choice of any repair shop certified by the National Institute for Automotive Service Excellence (ASE®)

Pay-As-You-Go Car Warranty: FAQ

Are aftermarket car warranties worth it?

If you drive a newer car that’s known for costly repairs or a used vehicle with high mileage, you may want to consider extended car warranty coverage. Use sites like RepairPal to learn what repairs on your vehicle may cost before deciding to purchase extended coverage. You should also compare quotes from several reputable providers to determine a fair price for the coverage you need.

Are brakes covered under warranty?

No, brakes are generally not covered under warranty. Some warranty companies offer maintenance packages as add-ons for coverage plans. Those packages often cover routine maintenance items like brake pads, oil changes, and tires.

What’s the cheapest car warranty?

Based on our research, CarShield often has the most affordable extended warranty coverage on the market. Because the company offers month-to-month payment plans, you can cancel at any time.

Editor's note: CarShield markets vehicle service contracts on behalf of American Auto Shield.

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