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Should I buy an extended car warranty?

Purchasing an extended auto warranty can be a good way to protect your vehicle and your wallet against unexpected repairs. An extended warranty can provide peace of mind that you won’t have to pay for many common repairs out of pocket.

However, there are also some potential downsides to consider before making the decision to purchase an extended warranty. It’s important to weigh the pros and cons to be sure that you’re getting the best value for your money.

In this article, we’ll explore the various pros and cons of purchasing an extended auto warranty, so you can make an informed decision as to whether it’s the right choice for you. If you’re still not sure, one of our licensed insurance agents at YourPolicy can give you some guidance as to whether or not this type of warranty is a practical addition to your auto insurance coverage.

Photo by Kei Scampa

What is an Extended Auto Warranty?

An extended auto warranty is a type of service contract that provides coverage for a period of time after the expiration of the original manufacturer’s warranty. It can provide coverage for repairs, parts, and labor, depending on the plan you purchase.

It can also provide other benefits, such as rental car coverage and roadside assistance. Extended auto warranties are typically offered by third-party providers, such as dealerships, car repair shops, and independent companies. They can be purchased for a variety of vehicles, including new and used cars, trucks, vans, and SUVs.


  • The chief advantage of an extended warranty is that it can save you money on repairs. If your car needs a costly repair that is covered under the contract, you’d be responsible only for the deductible amount (if you have one). This may be especially beneficial if your vehicle is older or has higher mileage.
  • Some extended auto warranties offer additional benefits, such as rental car coverage and roadside assistance.
  • An extended auto warranty can help to increase the resale value of your vehicle.


  • You could spend thousands of dollars over the life of the warranty and never use it. It’s important to realize that the cost of the repair is often less than the cost of the warranty.
  • An extended auto warranty may not cover certain types of vehicles or may not be available in your state. It’s important to check with the provider to make sure that your vehicle is eligible for coverage.
  • Some extended auto warranties may not cover all parts or repairs, or they may have certain restrictions that could limit your coverage.
  • You may be reimbursed for only a portion of the cost to repair based on the car’s mileage.
  • Under most extended warranties, either the dealer, manufacturer, or an independent third party is responsible for paying for repairs. If any of these entities go out of business, you may be stuck with a warranty you can’t use.
What to Consider Before Purchasing an Extended Warranty

Before you make the decision to purchase an extended auto warranty, there are a few things you should consider.

First, you should research different providers to find the best plan for your needs. Make sure to compare the coverage, price, and any additional benefits. It’s also important to read the fine print to make sure you understand exactly what is covered.

In addition, it’s important to consider how much coverage you need. Purchase a plan based on the length of time you plan to keep your vehicle. Whether you plan to keep your vehicle for a long time or only a few years, be careful that you don’t end up paying for coverage that you don’t need.

Finally, you should consider the cost of the extended auto warranty. Make sure to compare the price of the plan to the cost of potential repairs.

What is the Cost of an Extended Warranty

Coverage options for these warranties vary widely and are based on the make and model of your car. The upfront cost can range from $1,000 to $3,000 or more. If you roll this cost into your auto loan, you’ll pay interest on it.

Another key point that is often overlooked is deductibles. They can be charged in two different ways: per repair or per warranty service visit. Make it a point to know how deductibles work for your plan. If your car can’t be repaired in one trip to the auto shop, you could end up paying multiple deductibles for one repair.


Before purchasing an extended auto warranty, make sure to research different providers to find the best plan for your needs. Compare the coverage, price, and any additional benefits that are offered. Also, make sure to read the fine print and understand exactly what is covered and what is not.

Finally, read customer reviews to get an idea of the quality of the provider’s customer service.