Find out whether extended protection is right for you and your vehicle.


If your car came with a three-year/36,000-mile manufacturer's warranty that’s about to expire, you may be considering buying an extended warranty coverage plan. Choosing the right extended auto warranty can make the difference between an expensive mistake and saving hundreds to thousands of dollars on repair bills.

Here, we’ll take a look at different types of extended car warranties, the factors that affect cost, and ultimately whether extended protection is right for you. We’ve also included reviews of the best extended car warranty providers, so you can shop for a plan that gives you the best possible coverage and peace of mind.

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In this article:

What Is An Extended Auto Warranty?

An extended warranty, also known as a vehicle service contract, is a contract between you and a provider designed to protect your vehicle from costly repairs. Generally, you make small, monthly payments toward your contract and pay a deductible if and when you need covered services from a mechanic.



Should You Get An Extended Auto Warranty?

Buying an extended warranty is a gamble – investing in an extended warranty gives you peace of mind and provides coverage in case of a mechanical breakdown, but you may not end up needing it. So if you think you can save your money, know that you risk paying a lot more out of pocket if your car breaks down.

car repair costs



How Much Does An Extended Vehicle Warranty Cost?

There’s no one-size-fits-all answer to how much an extended auto warranty will cost you. Costs can range from a few hundred dollars to well over $1,000 a year. There are many different factors that play a role in the cost of an extended vehicle warranty, including:

  • Age of the vehicle
  • Mileage of the vehicle
  • Buying from a dealership versus a third-party provider
  • Vehicle year, make, and model
  • Level of coverage
  • Number of high-tech components in the vehicle
  • Driving habits and routine vehicle maintenance

Of course, there are other costs that may go along with your extended warranty, such as repair deductibles. The choices you make when purchasing an extended warranty can greatly affect the overall price of your service contract.

Let’s break down how you can get the best coverage without breaking your budget when purchasing an extended vehicle service contract.



How Do Extended Auto Warranty Deductibles Work?

Both dealership and third-party extended warranties come with a deductible, which is the amount of money you’re responsible for paying on a covered repair.

If your deductible is $100 for a covered repair that will cost a total of $2,000, you would pay $100 toward the mechanic’s fee, and your warranty provider would cover the remaining $1,900.

Your actual deductible will depend on the provider and plan you select. Some third-party providers offer plans with deductibles as low as $0 that require nothing out of pocket when your car needs a covered repair.



Dealer Extended Warranties Vs. Third-Party Warranties

There are plenty of good reasons to purchase a car from a dealership, but your extended auto warranty doesn’t have to come from a dealership. In fact, dealership vehicle service contracts often come with both restrictions and added costs. Limitations may include:

Limitations Details
Increased Total Cost

Dealerships offer extended warranties with a high retail markup. A warranty that costs $800, for example, might cost $2,500 from a dealership. 

Hidden Interest

In addition to being more expensive up front, a dealership extended warranty often involves rolling the cost into your vehicle financing. This might seem like a convenient way to pay for your warranty, but unfortunately, you’re also going to be paying interest. This could add potentially hundreds of dollars to the cost of your extended warranty over the life of your auto loan.

Limited Repair Shops

An extended warranty from a dealer requires you to have covered repairs completed by the dealership. You may be able to go to another dealer of the same manufacturer, but this still greatly limits your repair options – for example, if you don’t live close to a dealership and experience a breakdown. 

Limited Coverage Options

Most dealership extended car warranties are limited in plan options. Generally, your coverage choices include a comprehensive plan, an intermediate plan, and a basic powertrain plan.

Vehicle Restrictions

You’re not going to be able to get a dealership extended auto warranty on an older vehicle or one with higher miles. Sometimes, dealerships don’t offer extended warranties once the manufacturer’s warranty expires. This means you probably can’t protect your car with 100,000 miles using a vehicle service contract from a dealership.


You don’t always have to buy an extended vehicle warranty from your dealer at the time you purchase your car. Some dealership representatives might claim you can only get a certain interest rate or financing approval if you buy your extended warranty at that time. This is not true.

Your search for the right extended protection should also take into account reputable third-party warranty companies. Unlike a dealership-branded service contract, a third-party warranty can offer flexibility in coverage and benefits like your choice of repair facility. Here are some of the top perks:

  • Flexible pricing and payments: Third-party warranty companies offer a range of coverage levels and pricing models to fit almost any budget. A third-party service contract also won’t have the markup of a dealership contract. Most warranty providers offer monthly payment plans, but third-party contracts won’t have the added interest of an auto loan.
  • Choice of repair shop: You won’t be limited to a dealership service center under a third-party extended warranty. Instead, you’ll be able to choose from any licensed repair shop for your covered repairs.
  • Variety of coverage options: Many third-party vehicle service contracts allow you to customize your coverage. Some provide multiple plans within each level of coverage, making it easy to find the plan that’s right for your car and budget.
  • Coverage for most vehicles: Depending on your provider, it is possible to obtain coverage for a vehicle with well over 100,000 miles. Dealerships don’t normally have coverage options for cars with high mileage. With vehicle owners keeping their cars longer now more than ever, according to USA Today, it’s important to have the option to protect an older vehicle from expensive breakdowns.



Common Car Repairs And Costs

Owning a car is expensive. After spending thousands on the purchase of the vehicle, you’ll need to add car insurance, fuel, and regular maintenance like oil changes to the total cost. Additionally, the longer you keep the car, the more likely it will need repairs.

According to data from the 2019 CarMD Vehicle Health Index, common car repairs include:

Repair Average Cost
Ignition Coil and Spark Plug Replacement $391
Catalytic Converter Replacement $1,371
Mass Air Flow (MAF) Sensor Replacement $341
Fuel Injector Replacement $450

On top of common repairs, there’s always the chance that your car could experience a larger issue. For example, you might need to replace an engine, which CarMD estimates could cost $7,150, or a transmission assembly, which it estimates at $3,905.



The Best Extended Warranty Providers

Don’t be wary of extended warranties because of scam warranty companies. These scammers contact you to let you know that your vehicle is no longer protected by a warranty. They’ll pressure you to buy an extended warranty contract, usually at a high price. When it comes time to get a repair, the company may have dissolved or gone out of business.

You can protect yourself from these scams by researching auto warranty companies before making a purchase. Reputable and trustworthy third-party warranty providers won’t use high-pressure sales tactics to get you to buy service contracts.



What To Look For When Buying An Extended Auto Warranty

Make sure you know you’re working with a legitimate extended warranty provider by looking for the following qualities:

Qualities Details

Easy-to-Find Sample Contracts

The best extended auto warranty companies provide sample contracts of their plans online. This way, you can tell if the plan is right for you. You won’t be pressured to buy anything because you can choose not to get a quote if the contract isn’t what you need.

Industry Partnerships

Automotive industry partnerships or endorsements help you verify that a company is trustworthy.

 Insurance-Backed Plans

Reputable warranty providers offer contracts that are backed by a financially stable insurance company. This gives extra assurance that your covered claims will be paid.

 Years in Business

The longer a car warranty company has been in business, the less likely it will fold when you need a claim. Most untrustworthy or scam companies haven’t been in business very long and don’t stay around long, either.

 Coverage Options

The more coverage options available, the more likely you’ll find a plan that covers your biggest repair concerns without draining your wallet.


Top Warranty Providers

Wondering how to find a reputable extended car warranty company? It’s important to do your research and find a company that fits your needs. To get you started, we’ve analyzed some of the top providers and named our recommendation below.

  Our Rating Coverage Levels Years in Business Customer Service Grade Insurance Backed Plans  






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Data updated October 2019


Is An Extended Auto Warranty Worth It?

As long as you do your research and understand your contract, an extended vehicle warranty can be a smart buy. To find the service contract that’s right for you, you’ll need to research plan and pricing options.

One of the best ways to make sure an extended warranty is worth it is to get a quote directly from a warranty provider. Ask the provider what plan options are available for your vehicle and thoroughly read your contract before signing up. The best providers will offer you a free quote and answer all of your questions and concerns in a straightforward manner without pressuring you to buy.

Get a free quote from our top picks below:


Read our guides to other warranty providers: