In this article, our review team explains what a car warranty insurance, as well as the differences between a car warranty and car insurance, and then helps you decide whether or not a car warranty is right for you.

What Is Car Warranty Insurance?

Car warranty insurance is a common misapprehension, but car warranty and car insurance are two very different concepts. Generally, when people are looking for car warranty insurance, they are looking for car warranty.

What Is A Car Warranty?

A car warranty is a contract signed between a consumer and a dealership or third-party warranty provider that protects a vehicle from certain costly repairs. The types of auto repairs that car warranty covers are detailed in a warranty provider’s contract.

There are two types of car warranties: factory warranties and extended warranties. A factory warranty, also called a manufacturer’s warranty, covers a new car for a specified period of time or miles, whichever comes first. A new car warranty is provided free of charge by car manufacturers to encourage prospective customers to buy new vehicles.

An extended warranty is an optional warranty intended to protect your vehicle once your factory warranty expires. This warranty is also known as a vehicle service contract or a vehicle protection plan. These warranties can be purchased before or after your factory warranty expires from a dealership or third-party extended warranty company.

How Is A Car Warranty Different From Car Insurance?

A car warranty is designed to pay for natural, mechanical breakdowns which happen over time as your vehicle ages and gains miles. These breakdowns include issues with some of these systems in your vehicle:

  • Air conditioning and heating systems
  • Electrical components
  • Powertrain components (engine, transmission, drivetrain, etc.)
  • Technological systems (center console, GPS, cameras)
  • Safety components (seat belts, airbags, etc.)

The purpose of a car insurance policy is a bit different. As you may know already, car insurance is designed to repair your vehicle if it’s damaged in a collision or for other unnatural reasons, including tornadoes, hurricanes, and theft. You are required to insure your car in every state to drive legally, while a warranty is optional.

Because the protection offered by an auto insurance company is so different from the protection offered by a car warranty provider, many car owners choose to purchase both car insurance and a car warranty.

Is An Extended Car Warranty Worth It?

Whether an extended car warranty is worth it or not depends on your individual situation and personal goals.

For example, if you cannot afford unexpected repair costs between $2,000 to $4,000, it is recommended that you consider an extended auto warranty.

Owning a car warranty will protect you from having to foot a large bill in case of a major mechanical breakdown in your vehicle, especially for a high-mileage or used car.

On the other hand, if you have enough savings to easily afford a $2,000 to $4,000 car repair, it is probably not worth it to purchase an extended auto warranty. There is a good chance that you will pay more money in the long-term with an extended warranty than just paying the repair bill.

For more information on this topic, we recommend that you read our article on whether extended car warranties are worth it.

Dealership Vs. Third-Party Extended Warranty

Prospective customers who decide to purchase extended warranty coverage often want to know what company they should buy their warranty from. Car manufacturers, such as General Motors, offer extended warranties as do third-party extended warranty companies.

In general, purchasing an extended warranty from a dealership will cost much more than an extended warranty from a reputable extended car warranty company because of the name recognition. One advantage of purchasing an extended warranty through a car manufacturer is that the covered repairs are done with brand-name parts. A third-party warranty will often let you choose your own repair shop, while a manufacturer’s extended warranty often states in the fine print that you have to visit one of the brand’s repair facilities.

However, our review team has found that extended warranties from third-party providers work just as well for most customers and also save them considerable amounts of money.

In addition, third-party extended warranty companies allow you to receive free quotes and sample contracts online, and they often provide higher coverage limits than extended warranties from car manufacturers do.

For example, while Chevrolet’s extended warranty offers protection up to a total of 5 years/60,000 miles, Endurance offers protection up to a total of 8 years/ 200,000+ miles.

Below are our review team’s picks for the best extended car warranties.

Our review team has examined several warranty providers, and we believe that Endurance and CARCHEX are two of the strongest options for our readers. Each of these providers offers different coverage options, with the level of coverage ranging from a powertrain warranty to a higher coverage warranties. Both of these providers offer additional perks, such as roadside assistance including towing, gas delivery, trip interruption services, and rental car reimbursement, though Endurance only offers them as part of their Endurance Elite Benefits.

Below, we discuss both of these extended vehicle warranty providers and how to decide between them.

Best Coverage: Endurance

Endurance offers direct-to-consumer extended warranties, which means that warranty services and claims are handled directly by Endurance. There is no middleman or underwriting provider. We named Endurance as the Best Coverage provider.

Here are a few things our review team likes about Endurance:

  • Direct-to-consumer model: Our review team appreciates Endurance’s direct-to-consumer model, which avoids the complexity and inconsistency of third party warranty administrators.
  • Treats its employees well: Endurance was named a Great Employer at the 2019 Stevie Awards. The company was selected due to its “impressive set of employee benefits and activities, particularly given the size of the enterprise.”
  • Company growth: Endurance made the Inc. 5000 list in 2019 as one of the fastest-growing companies in the U.S. This quick growth demonstrates that Endurance’s plans are appealing to many customers and that the company is capturing market share in its industry.

Best For Used Cars: CARCHEX

CARCHEX offers a total of five extended warranty plans, each of which can be customized. All plans include 24/7 emergency roadside assistance, gas delivery, trip interruption services, and lockout services.

Here are a few reasons our review team recommends CARCHEX:

  • Solid reputation: CARCHEX is an eight-time Inc. 5000 Hall of Fame Honoree and received a Top Workplaces Award by the Baltimore Sun for seven consecutive years.
  • Strong industry partnerships: CARCHEX has partnered with leading industry companies such as CARFAX, Kelley Blue Book, and This is a strong indication that they are a top extended warranty provider for automobile owners.
  • Sample contracts and free, customized quotes online: CARCHEX provides sample contracts online so you can learn exactly what their plans would offer before you purchase one. Likewise, CARCHEX also allows you to receive a free quote on its website so you can discover what an extended warranty would cost for your vehicle.

Deciding Between Endurance And CARCHEX

Are you struggling to decide between Endurance And CARCHEX? Read our CARCHEX vs. Endurance article.


In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of extended auto warranty companies to formulate rankings of the best providers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.

  • Industry Standing: Warranty providers with a history of strong business practices and endorsements from experts receive the highest scores in this category.
  • Coverage: This rating is based on types of extended warranty plans available, coverage terms, and added benefits like roadside assistance.
  • Cost: Our research team reviews sample quotes for a variety of plans and vehicles. Companies with lower prices per year of coverage receive the best scores.
  • Transparency: This score takes into account contract transparency and the availability of a money-back guarantee.
  • Customer Service: We comb through customer reviews and perform our own shopper analysis to get a sense of the responsiveness and helpfulness of each warranty company.