Everything you need to know to make the most of your car’s warranty.
All car manufacturers offer a car warranty on their new and certified pre-owned vehicles. Some are better than others, but essentially, all car warranties protect buyers from costly repairs due to manufacturer defects in materials or workmanship. To find the best coverage for your needs, it is important to understand what a car warranty does and does not cover. This article explains how car warranties work and what to do when your manufacturer’s factory warranty runs out. We also suggests the best providers for extended car warranties.
In this article:
- What Is A Car Warranty?
- What Does A Car Warranty Cover?
- Should I Buy An Extended Car Warranty?
- What’s The Cost Of An Extended Car Warranty?
- Third-Party Extended Car Warranty Providers
- Best Coverage: Endurance
- Best Service: CARCHEX
- Best Value: CarShield
- The Bottom Line on Car Warranties
We’ve reviewed every automakers’ warranty ranked from best to worst and learned that the average bumper-to-bumper car warranty last for 4 years/50,000 miles, whichever comes first. Some large-volume automakers like Ford, Toyota, and Nissan offer less warranty coverage at 3 years/36,000 miles, whereas lower-volume automakers such as Genesis and Jaguar offer some of the longest warranty coverage at 5 years/60,000 miles.
Your decision to choose a car brand with a better warranty could potentially save you hundreds if not thousands of dollars on repairs. If you plan on holding on to your vehicle after the warranty terms have expired, don’t think you’re on your own to tackle the expense of repair costs. There are a number of reputable extended car warranty companies that provide the coverage for repair mechanical defects while still remaining within your budget.
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What Is A Car Warranty?
A car warranty is a contract that promises to pay for the cost of parts and labor to repair or replace specified vehicle components. Car warranties help pay for repairs after a vehicle breaks down due to mechanical failure.
Car Warranty Vs Car Insurance
An extended car warranty is not the same as car insurance. For starters, car insurance is mandated by state law, whereas an extended car warranty is optional.
There are also coverage exclusions in extended car warranties that can only be covered through the purchase of collision or comprehensive insurance. If you are involved in a collision with another car or object, you would use collision insurance to pay for the cost of the damage.
Similarly, if your vehicle gets damaged due to vandalism, bad weather, or theft, comprehensive insurance would cover those loses, not your car warranty.
What Does A Car Warranty Cover?
Manufacturer warranties on new and certified pre-owned vehicles can generally be divided into two coverage types: comprehensive coverage and powertrain coverage.
Comprehensive coverage, also known as a bumper-to-bumper warranty, will pay for the repair and included labor costs for any defects caused by poor workmanship or manufacturer error.
These repairs include most of your vehicle’s components including:
- Air conditioning and heating
- Electrical components (power windows, door locks, sunroof, etc.)
- Safety components (airbags, seat belts, etc.)
- High tech systems (cameras, GPS, center console, etc.)
- All major vehicle systems (excludes a short list of components)
Powertrain coverage protects from costly repairs to your vehicle’s powertrain. This can include items such as:
- Drive shafts
- Transfer case
Generally, powertrain warranties last longer than bumper-to-bumper warranties with coverage ranging from 4 years/50,000 miles to 10 years/100,000 miles. Some car manufacturers, like Volkswagen, combine comprehensive and powertrain coverage into a single warranty, whereas other manufacturers might offer powertrain coverage as separate warranty.
Though the powertrain is less likely to break down than other components on your vehicle (which is why the length of coverage is longer for powertrain warranties), the cost of repairs is often much higher. For example, the average cost for a transmission replacement is between $4,931 and $5,107, according to RepairPal.
In addition to bumper-to-bumper and powertrain coverage, your manufacturer’s warranty may also mention protection for corrosion perforation, replacement parts, accessories, seat belts, and emissions control systems. Terms vary widely across brands and contracts, so it’s best to check your vehicle’s specific warranty.
Exceptions And Exclusions
There are exceptions and exclusions with every car warranty. Typically, you should not expect your car warranty to cover any of these items:
- Regular maintenance (oil changes, tire rotations, etc.)
- Wear and tear items (tires, brakes, brake pads, clutches, windshield wiper replacements, light bulbs, etc.)
- Exterior body damage (door dings and paint scratches)
- Interior damage (holes in the upholstery, broken plastic, etc.)
- Damage caused by driver negligence (skipping regular maintenance, reckless driving, etc.)
- Damage from an accident (exterior dents, broken glass, broken internal components)
- Damage from environmental factors (salt, hail, fire, etc.)
It’s possible that some new or certified pre-owned warranties will offer limited coverage on some of the items listed above. For example, there may be a value-added sales promotion to cover all maintenance for the first two years or provide free roadside assistance. However, you should always read the fine print on your car’s warranty to know exactly what’s covered and what the car manufacturer quietly omits. If you do not have a copy of your car’s warranty, contact your dealership or visit the manufacturer’s website for more information.
Should I Buy An Extended Car Warranty?
When your factory warranty runs out, either from the age of the vehicle or the mileage, you become solely responsible for any repairs. Depending on the type of repair or frequency of repairs, the cost can be significant. Purchasing an extended car warranty from either the manufacturer or a third-party provider will greatly offset the cost of repairs as your car ages, providing you with peace of mind.
You do not need to wait until your factory warranty runs out to purchase an extended warranty. You can purchase an extended warranty for additional protection not covered in the factory warranty. Furthermore, the earlier you sign up for an extended warranty, the less it will cost.
Extended car warranties are often broken down into different levels (tiers) of coverage and can last anywhere from 1 to 10 years. Instead of a guarantee from the manufacturer that the vehicle is free of defects due to poor workmanship or faulty components, an extended warranty is a vehicle service contract that promises to pay for the cost of repairs should a mechanical breakdown occur. The owner is then only responsible for a monthly payment and/or deductible as part of the policy.
What’s The Cost Of An Extended Car Warranty?
There are a number of factors that contribute to the final cost of an extended warranty, including:
- Make and Model: Premium vehicles will have a higher warranty cost because replacement parts are more expensive.
- Age: The older your vehicle, the more expensive the warranty because there is an increased likelihood of repairs.
- Mileage: Higher mileage will drive up the cost of the warranty, even if the vehicle is relatively new.
- Level of Coverage: The more systems covered under your warranty, the more the plan will cost.
- Deductible: Warranties with a deductible will have a lower monthly premium.
- Provider: The provider of your extended warranty can impact the cost of your plan. Dealership extended warranties may get wrapped into your vehicle’s financing, which means you’re paying interest on top of your monthly premium.
Third-Party Extended Car Warranty Providers
When purchasing an extended car warranty, you’re not limited to your automaker’s policy. There are third-party warranty providers that can offer lower prices and more options depending on your needs. We’ve researched and reviewed the leading extended warranty companies based on a variety of different criteria:
- Coverage: Number of plans offered, customization available, contract duration, inclusions or exclusions
- Customer Service: Quote and claims process, money-back guarantee, availability, Better Business Bureau (BBB) accreditation, BBB rating, BBB complaints, sample contracts available online
- Company Reputation: Customer reviews, number of years in the warranty business, partnerships and endorsements
- Additional Perks: Roadside assistance, rental car reimbursement, emergency gas delivery, towing, trip interruption coverage for meals and lodging
Best Coverage: Endurance
Overall, the highest ranking extended warranty company we reviewed is Endurance, which also scored highest for coverage options.
Unlike most extended warranty companies that work as brokers between customers and various plan providers, Endurance directly administers its warranty plans and is involved at every step of the claim process. The company’s one-stop-shop service speeds up claims and offers peace of mind knowing you have only one company to contact if you need assistance.
Endurance Extended Vehicle Protection Plans
The coverage options offered by Endurance are comprehensive and account for different ranges in price and protection. Plans are offered with up to 20 years/200,000 miles of protection.
- Select Premier Coverage: Endurance’s plan for high-mileage vehicles, the warranty has a fairly extensive inclusion list that focuses on the powertrain.
- Secure Coverage: Endurance’s most basic auto warranty only covers parts of the powertrain, meaning the engine, transmission, and drivetrain.
- Secure Plus Coverage: This mid-level warranty provides the shortest wait time out of all the plans. The waiting period for coverage is only 30 days or 1,000 miles.
- Superior Coverage: This high-tier comprehensive plan provides great coverage for hundreds of listed parts throughout the vehicle.
- Supreme Coverage: This top-tier plan is Endurance's exclusionary, bumper-to-bumper car warranty. It includes coverage for most parts with only some exclusions.
Unlike some dealership extended warranties, many Endurance contracts don’t charge a deductible, nor do they require you to visit a specific dealership. You are free to choose any repair shop you like, and are only required to pay a monthly payment that fits your budget.
Best Service: CARCHEX
CARCHEX has provided extended warranties for 20 years, is fully accredited by the BBB with an A+ approval rating, and has won the endorsement of industry leading companies such as Kelley Blue Book, the Vehicle Protection Association, CARFAX, and Edmunds.com. The company’s customer service is also highly regarded, providing transparent coverage and pricing with its No-Haggle, Low-Price Everyday Guarantee™ philosophy.
We like that CARCHEX has been recognized through numerous customer service awards over the years, including:
- 2017 ThoroughlyReviewed Top Pick
- BestReviewsHub.com Best Choice Award for 4 consecutive years
- TopConsumerReviews.com 5-star rating for 6 consecutive years
- 2017 Golden Bridge Award® “Silver Status” for 3 consecutive years for customer service
Best Value: CarShield
Since 2005, CarShield has provided extended car warranty protection on over one million vehicles, and can attribute its widespread success in large part to the quantity of its customer reviews:
- 4,934 Trustpilot reviews
- 2,460 Google reviews
- Featured on HGTV, CNN, ESPN, CNBC, TBS, and more
CarShield is also noteworthy for its flexible coverage, offering plans that are month-to-month contracts rather than fixed-year terms. Additionally, customers enjoy low or $0 deductibles, 24/7 roadside assistance, courtesy towing, claims paid directly to the auto repair facility, and free rental car or reimbursement depending on your plan.
The Bottom Line On Car Warranties
Factory car warranties and extended car warranties are both intended to increase buyer confidence that the vehicle they purchased will be able to go the distance. If any malfunction should occur, car warranties help customers get the repairs they need without heavy financial loss. Extended warranties offered by dealerships and third-party vendors can provide security and relieve the mental and financial burden of expensive repairs.
Read our guides to other warranty providers: