We explore the industry’s top extended protection plans so you can make sure your vehicle is covered in the long run.

 

Are you looking for a way to protect your car, and your wallet, against costly repairs? You have probably heard of extended warranties, but maybe you aren’t sure if they’re worth it.

We rounded up all of the important things you should know about extended warranties, including what they cover, how they work, and how to find the right one. Learn whether an extended warranty for cars is right for you. We’ve also sorted through some of the top-ranking providers to give you the best recommendations for coverage.

Use the tool below to get free quotes from our top three picks:

 

In this article:

 

Everything You Need To Know About Extended Warranties

An extended warranty, also called a vehicle service contract, is designed to protect your vehicle from costly auto repairs. You generally make a small monthly payment toward your contract, and then pay a deductible if and when you need covered services from a mechanic.

The best way to find a reputable extended car warranty company is to understand just what an extended warranty is, and what it’s not.

Common Myths About Extended Warranties

There is a lot of misleading information out there when it comes to extended warranties. We break down some of the biggest myths below.

Myth Fact

An extended warranty for cars is an extension of your manufacturer’s warranty.

A manufacturer’s warranty comes with new vehicles (and some used ones) and covers defective or faulty parts. Extended warranty service contracts are an additional purchase that can help pay for certain repairs after the manufacturer’s warranty expires.

Some manufacturers like GM and Mercedes have extended warranties that actually are extensions of the factory warranty. They simply add years and miles to the term length. But this is not the norm. Most extended warranties are standalone plans separate from the factory warranty.

My car still has the manufacturer’s warranty, so it’s completely protected.

 Most manufacturer warranties only last for a few years. Vehicles tend to experience more issues as they age, so by the time your car breaks down, your factory warranty could be expired.

An extended warranty pays for all repairs to my car.

Since your extended warranty is a service contract, you’ll choose the level of coverage you want. While there are comprehensive, bumper-to-bumper plans available, no warranty will cover your car for every ding, dent, or breakdown.

The biggest mistake people make with extended warranties is not reviewing the details of the contract and winding up with the wrong type of coverage for their driving needs. Your contract tells you what is and isn’t covered by your plan. Understanding your contract is vital to getting the most out of an extended warranty for cars.

An extended warranty is a scam that won’t pay for any repairs.

Unfortunately, fake warranty companies do exist to scam people out of money. But there are many reputable providers too. If you research your provider before making a commitment, you can avoid these scams and find a great vehicle protection plan.

Again, the worst thing you can do when buying an extended warranty is not thoroughly read your contract. Too many people assume their service contract pays for certain repairs when, in fact, it doesn’t.

Extended warranties are expensive.

While some extended warranties can certainly be expensive, there are countless options for protecting your car. Try to find a warranty company that offers the coverage you want at a price that fits your budget. Many warranty providers let you make monthly payments so your plan is more affordable.

You can’t get an extended warranty on a used car or one with high mileage. Most warranty companies offer protection plans specifically for older or high-mileage vehicles. Drivers today are keeping their cars for longer than ever before, so it makes sense for a warranty provider to offer coverage for older cars.
 

How Does An Extended Warranty For Cars Work?

Buying a used car is always a bit of a gamble. Even certified pre-owned vehicles that undergo a manufacturer's inspection and come with a used car warranty can come with issues from previous owners. An extended warranty, which differs greatly from car insurance, helps protect you by providing coverage for your vehicle in case it has a breakdown or a covered part needs a repair and provides peace of mind. You can choose to get comprehensive coverage, also called exclusionary coverage, or a named component plan.

  • Exclusionary Coverage: This type of extended warranty covers all parts of your vehicle from mechanical breakdown due to normal driving activities, except for a short list of excluded parts and components.
  • Named Component: This plan type is essentially the opposite of exclusionary coverage. Your contract will have a list of the parts and systems that are covered, and any unlisted parts are not covered.

After purchasing your contract, you’ll have to go through a waiting period until it can be used. This helps protect the warranty provider from someone purchasing a car warranty right after discovering an issue with their car. Most extended warranties require you to wait 30 days and 1,000 miles before you can make a claim for car repairs.

If you have a covered breakdown after your waiting period is up, you’ll file a claim with your warranty provider. Depending on your contract, you may have to use a dealership, or you might be able to use your favorite repair shop. Most plans require you to pay a deductible, and the extended warranty covers the rest of the repair cost.

car repair costsHow Much Does An Extended Car Warranty Cost?

The cost of any extended warranty varies by provider. Generally, you can expect the cost to be based on the following factors:

  • Amount of coverage
  • Make and model of your car
  • Age of your car
  • Mileage
  • Whether or not you have a luxury vehicle

With so many different factors, it’s hard to say what an extended warranty for cars might cost. You can pay upwards of $1,000 for a service contract from a dealership, while the same type of coverage from a third-party provider could be significantly less. The best way to find the right price on extended protection is to shop around and get multiple quotes customized for your vehicle.

Remember, however, that the cheapest option isn’t always the best choice. You’ll get the most out of an extended warranty if you find a plan that fits both your budget and coverage needs.

Where To Buy An Extended Warranty

Finding a reputable warranty provider is the most important thing you can do when shopping for an extended warranty on a used car. To find a trustworthy provider that fits your needs, you’ll first need to decide between buying a warranty from a dealership or buying from a third-party warranty company.

Dealership Warranties Vs Third-Party Warranties

Dealerships usually offer extended warranties on new cars at the time of sale. If you’re buying a relatively low-mileage, used car from a dealership, there’s a good chance you’ll be offered a warranty, too.

There are some important things to consider before you sign up for extended protection with the vehicle manufacturer.

  • Repair Shop Limitations: Most dealership extended warranties require you to have covered repairs completed at a branded dealership. For example, a service contract from your Lexus dealership may require you to only visit a Lexus dealer for repairs. This means your preferred mechanic is not an option.
  • Name Brand Parts: Manufacturer-branded service contracts almost always require repairs to be made with genuine branded parts. Branded parts are usually more expensive than their generic counterparts. If you have any local repair shop work on your car for regular maintenance, it may have to use genuine parts in order to not void your extended warranty contract.
  • Greater Expense: Dealership service contracts are generally more expensive than third-party contracts. Your dealer may even suggest you roll the cost of the warranty into your car’s financing. This might sound convenient, but you will then be charged interest on the cost of your warranty.

Reputable third-party companies present a more flexible alternative for an extended warranty for cars. Unlike a dealership service contract, a vehicle protection plan from a trustworthy third-party provider usually means:

  • Choice of Repair Shop: Because they are not tied to a dealership, third-party warranty providers allow you to take your car to a network of local auto repair shops and national chains. As long as your favorite mechanic is certified by the provider, you should be able to go there for covered repairs.
  • Lower Costs: Without dealership markup, third-party companies may be able to provide much better pricing on a service contract. Many third-party providers are brokers, meaning they offer plans from a variety of warranty administrators and have competitive pricing. Additionally, you’ll be able to customize your coverage to walk away with a plan that fits your budget.
  • No Pressure: There’s no need to purchase your extended warranty on the day you buy your car. Other providers allow you to purchase a plan anytime.
  • Coverage for Older Used Cars: If you buy a used car with high mileage, you may not qualify for a dealership service agreement – even though you probably need it more for an aging vehicle than for a new car. A great third-party provider will offer plans for cars with upwards of 100,000 miles.

What To Look For In A Used Car Warranty Provider

In order to find the right warranty company, it’s important that you do your homework. Always consider these steps when shopping for a third-party warranty provider:

  • Check the BBB Rating: A high rating from the Better Business Bureau helps you understand how the company handles customer comments and complaints.
  • Check Online Reviews: Look at reviews to make sure your potential warranty company is honoring contracts and taking care of customers. Oftentimes, you learn the most about a company by what customers have to say.
  • Read the Contract: The contract is the only legally-binding document that guarantees what is and isn’t covered under your plan terms. Always go through your contract.
  • Get a Guarantee: Reputable extended car warranty companies often offer a money back guarantee if you decide the plan isn’t for you after all. Find out when you need to cancel in order to receive a full refund.
  • Stay Away from Sales: This might seem backwards. After all, who doesn’t want to get a great deal? However, a third-party company that offers you a “today only” price is only trying to pressure you to make a decision. Look for a company that offers you its best price and gives you time to think it over before making a commitment.

The Best Extended Warranty Companies

There are plenty of extended warranty companies to choose from, but working with a highly respected company can help you save money and headaches in the long run. In our recent review of the most popular third-party car warranty providers, we’ve done the research for you on these five top-rated warranty providers and more. 

 

Best For

Our Rating

Coverage Levels

Years in Business

 

 

1. Endurance

Drivers looking plenty of coverage options and good customer service

★★★★★

5

13

Get Quote

 

2. CARCHEX

Coverage of used cars with almost any age or mileage

★★★★1/2

5

20

Get Quote

CARCHEX

3. CarShield

Drivers looking for long term lengths or month-to-month payments

★★★★1/2

6

14

Get Quote

CarShield

4. Protect My Car

A variety of plans, including one for motorcycles and ATVs

★★★★1/2

3

14

Get Quote

Protect My Car

5. AA Auto Protection

Drivers with newer cars or lower mileage cars

★★★★1/2

5

30

Get Quote

AA Auto Protection

 
Data updated November 2019

Endurance

Endurance is a direct provider of extended warranties, which means the company services the contracts it sells. If you need a covered auto repair, you’ll talk with the Endurance customer service team directly. Most other providers are brokers for service contracts, serving as the middleman between you and a warranty administrator.

 

Endurance provides its own contracts and offers five levels of coverage for drivers. Benefits to using Endurance include the ability to choose any licensed repair shop, claims paid directly to repair shops, and zero-interest monthly payment plans. It also offers one free year of the Endurance Elite Membership, which includes roadside assistance, ID theft protection, and key fob replacement service if you lose or break your electronic key fob. 

CARCHEX

One of the industry leaders in extended warranties for cars, CARCHEX provides plenty of coverage options to satisfy almost any car or budget. You’ll be able to choose from five levels of coverage, with various contracts within those levels. Every CARCHEX plan comes with extra perks like 24/7 roadside assistance and trip interruption services, too.

 
 

CARCHEX holds an A+ BBB rating and has been BBB accredited for a decade. The company has also been in business for 20 years, so you don’t need to worry about it folding as soon as you need a repair. CARCHEX has numerous endorsements and partnerships with top automotive industry leaders like CARFAX, RepairPal, Edmunds.com, and Kelley Blue Book.

CarShield

Our choice for Best Value extended warranty provider is CarShield. Month-to-month contracts can be cancelled at any time, and there is a money back guarantee for contracts cancelled within the first 30 days. CarShield offers roadside assistance and other great benefits with most plans. 

 

In addition to four versatile plans ranging from comprehensive to powertrain warranty coverage, CarShield has a plan designed specifically to protect high-tech components and a plan for specialty vehicles like motorcycles and ATVs.

Plus, CarShield is one of the most popular providers, having covered more than one million vehicles since opening its doors 14 years ago.

Protect My Car

 

Protect My Car offers several service agreements that are ideal for older or high-mileage vehicles. The company also has some of the longest term lengths available for extended warranties, ranging from 36 to 60 months.

 

 

The only speed bump we ran into with Protect My Car was the quotes process, which we found to be a little confusing. Most warranty providers have intuitive online quote forms, but Protect My Car makes it hard for you to get your quote.

Why Endurance Is Your Best Bet

A variety of coverage options at an affordable price makes Endurance our top recommendation for an extended warranty for cars. Get the most out of your long-term protection with added perks and exceptional service, including:

  • 30-Day Money Back Guarantee: Cancel your service within 30 days, and get your money back with no questions asked.
  • Repairs Paid Directly: Endurance pays your preferred repair shop for covered repairs. You won’t be forced to pay for a repair up front and then have to wait months to get a reimbursement check.
  • Roadside Assistance: Free for the first year, you'll get the protection of 24/7 roadside assistance, including trip interruption services and coverage for rental cars and lodging if you’re stranded due to a breakdown.

Endurance Coverage Overview

With five levels of coverage from comprehensive to named component, Endurance has a service contract for almost every vehicle. Here’s a closer look at the plans:

  • 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 warranty. It includes coverage for most parts with only some exclusions.

Although Endurance came out on top in our research, it's a good idea to get quotes from several different providers so you can find the extended warranty coverage that is right for you.

Read our guides to other warranty providers: