Why Get an Extended Car Warranty? [Complete Buying Guide]

What is an Extended Car Warranty?

An extended car warranty is an optional vehicle service contract offered by manufacturers, dealerships, and independent providers that covers the cost of repairs or replacements of major parts and systems after the original manufacturer’s warranty expires. It typically begins at the end of the manufacturer’s coverage and can last either for a certain number of years or miles, or until the car is no longer functional. Extended warranties can cover more than the powertrain, such as heating and air conditioning, steering, and safety technology, as well as repairs for typical car wear and tear. The cost of the warranty may be covered by monthly payments, and usually require that you pay a deductible when you need a service. Buying an extended warranty is a gamble – it provides coverage in case of a mechanical breakdown, but you may not ever need it.

Why Get an Extended Car Warranty?

1. Protection Against Major Mechanical Repairs

An extended car warranty is a form of protection that provides coverage against major mechanical repairs that are not usually covered by a car’s manufacturer’s warranty, such as repairs caused by improper maintenance or modifications, weather-related damages, and accident-related damages. It typically covers a predetermined list of components, such as the engine, transmission, brakes, and exhaust. The warranty typically covers the cost of the repair, minus any required deductibles, and the car owner is usually responsible for submitting the cost of the repairs for reimbursement. A corrosion warranty can also be purchased to cover rust damage.

2. Peace of Mind During Periods of Warranty Expiration

An extended car warranty provides peace of mind during periods of warranty expiration by protecting drivers from expensive repairs. When the original factory warranty expires, an extended warranty from either a third-party provider or the manufacturer will take over. With these extended warranties, customers can choose from customizable coverage plans that last up to 15 years and 250,000 miles, depending on the provider. This helps to ensure that drivers are protected from any costly repairs that may arise in the future. Additionally, third-party providers offer more flexibility than manufacturers when it comes to cost, repair shop availability, and coverage options. By researching extended car warranty companies and looking for reputable providers, customers can be sure that they are getting the best deal and the most coverage possible. Ultimately, an extended car warranty provides peace of mind during periods of warranty expiration by protecting drivers from costly repairs.

3. Coverage for Major System Failures

An extended car warranty provides coverage for major system failures that can result from mechanical or electrical breakdowns. It pays for repairs to your car’s major mechanical parts, such as the engine, transmission and other add-ons, such as 24/7 roadside assistance, rental car reimbursement, trip interruption service, and tire protection. Depending on the coverage chosen, extended warranties may not cover routine maintenance or damage caused by normal wear and tear, and it is important to read the fine print of any warranty to ensure you know what is and is not included.

4. Ability to Negotiate Service Plans at Dealerships

An extended warranty can help you negotiate service plans at dealerships by providing you with the knowledge and confidence to ask the right questions and make an informed purchase decision. Carefully reviewing potential service contracts can help you understand upfront costs and deductibles, covered and uncovered repairs and services, and the length of the warranty coverage period. Additionally, researching plan and pricing options from warranty providers can give you a free quote and answer questions and concerns. Ultimately, an extended warranty can provide you with peace of mind and assurance that you are making the right purchase decision.

5. Ability to Compare Plans and Coverage Levels

An extended car warranty can help you compare plans and coverage levels by giving you an overview of the pros and cons of protection, purchasing flexibility, and savings on out-of-pocket repair costs. It can be difficult to compare quotes between providers due to the variety of factors that influence cost, so it is important to research each provider thoroughly. Factors such as the number of plans offered, term limits, exclusions, and additional benefits should all be taken into account. Additionally, reputation is pivotal in choosing the right warranty company, so it is important to look into Better Business Bureau ratings, customer reviews, and years in business. Finally, it is also essential to make sure that the customer service team is responsive to any inquiries or concerns. By taking all of these factors into consideration, you will be able to compare and contrast various plans and coverage levels to make an informed decision.

6. Access to 24-Hour Customer Service

Access to 24-hour customer service provides a great benefit to customers with an extended car warranty. Having access to customer service at any time of the day can be a huge help in the event of a car emergency.

7. Coverage for Rental Car Coverage

An extended warranty can offer coverage for rental cars, depending on the type of policy you choose. Generally, extended warranties will not cover routine maintenance or damage caused by normal wear and tear, but they can offer coverage for accidental damage, theft, or weather-related events. The exact coverage will vary depending on the policy you choose, so it is important to read the details carefully.

8. Ability to Use Warranty Searches to Compare Plan Options

An extended warranty can help with warranty search comparisons by offering vehicle owners a fixed cost of ownership, eliminating surprise repair bills that would otherwise bust a budget, and providing robust, extended protection. By researching different providers and thoroughly reading the fine print of any contracts, consumers can identify the provider that offers the right coverage at the best price. Additionally, shopping around and getting multiple quotes can help them find the most affordable option. With the right extended warranty, vehicle owners can be confident that they are receiving the best possible protection.

9. Ability to Save Money on Repair Costs

Having an extended warranty can help save money on repair costs by providing robust, extended protection and purchasing flexibility. An extended warranty can provide financial security by covering costs that are not covered by a factory warranty or outside of the warranty period. Furthermore, extended warranties can eliminate surprise repair bills and provide a fixed cost of ownership. Additionally, they can be transferred or cancelled with money back if the vehicle is sold. All of these benefits make them an attractive option for vehicle owners looking to save money on repairs.

10. Coverage for Mechanical Failures and Product Defects

An extended car warranty covers a variety of mechanical failures and product defects. The type of coverage depends on the type of warranty purchased.

The most common types of extended car warranties are:

Powertrain Warranty: This type of warranty covers the most critical parts of the car’s engine, transmission, and drive axle. It typically covers components like the crankshaft and piston assemblies, camshaft and valve train, flywheel, and drive belts.

Stated-Component Coverage: This type of warranty covers only specific parts and systems that are listed in the contract. This includes items like air conditioning and heating, power windows, brakes, and steering.

Bumper-to-Bumper Warranty: This type of warranty is the most comprehensive and covers almost all vehicle components. This includes the engine, transmission, electrical system, suspension, and other components not covered in the Powertrain Warranty.

How to Choose the Right Extended Car Warranty For You?

Step 1: Research coverage options

When it comes to extended car warranties, there are a variety of coverage options available. Generally speaking, there are two main types of plans – “stated benefit” plans that provide coverage for specific items and “exclusionary” plans that exclude coverage for specific items but cover everything else. When considering a plan, be sure to look at the upfront costs and deductibles, what repairs and services are covered and excluded, the warranty coverage period and mileage covered, and if your factory warranty overlaps with the extended warranty. Additionally, when purchasing an extended warranty, make sure to shop around to get the best price from a reputable provider. You can compare companies online, call the company directly to inquire about pricing, or seek out other highly-rated warranty companies for quotes. Finally, it is important to note that service contracts are optional and not required if you plan to obtain auto financing.

Step 2: Consider your needs (comfort, convenience, etc.)

When considering whether to purchase an extended car warranty, it is important to weigh the pros and cons and determine if it is the right fit for your needs. Here are some steps to consider when selecting an extended car warranty for your new or used car:

1. Determine your budget and research different levels of coverage available. Decide which type of extended car warranty best fits your budget and needs.
2. Consider your options. Most extended car warranties are offered through either the car manufacturer or a third-party provider. Understand the benefits of each option and compare the cost.
3. Shop around. The price of an extended car warranty is negotiable. Compare prices from different providers and ask them if they can beat the price.
4. Research the company. Read online reviews and customer feedback to ensure that you are dealing with a reliable extended car warranty provider.
5. Read the contract. Understand the details of the contract and make sure you are getting the coverage you need. Be sure to read the small print and understand what is and is not covered.

By following these steps, you can ensure that you are selecting the right extended car warranty for your needs.

Step 3: Compare coverage benefits and costs

When choosing an extended car warranty, it is important to compare coverage benefits and costs in order to get the best deal. To begin, consider the length of the warranty you wish to purchase, as longer term limits will typically lead to a higher overall cost. Additionally, be sure to compare rates from different providers, as they may charge different rates for similar coverage. Additionally, compare your deductible, as the higher your deductible is, the lower your premium will be. Additionally, compare the different warranty plans, as bumper-to-bumper plans may cost more than lower-level coverage. Finally, consider the age of your vehicle, as older vehicles will typically cost more to cover. By taking each of these factors into account, you can compare coverage benefits and costs and find the best deal for your extended car warranty.

Step 4: Read reviews from other customers

Reading reviews from other customers can help you choose the right extended car warranty for you by giving you greater insight into the company’s industry standing, coverage, cost, transparency, and customer service. Reviews from previous customers provide valuable feedback on the company’s reliability and responsiveness in handling claims. Additionally, customer reviews can help you identify potential problems or areas for improvement to consider before making a purchase. Armed with this knowledge, you can compare different providers and make a more informed decision about which car warranty is best for you.

Step 5: Make a comparison between different warranties

Comparing extended warranties can be a daunting task. To make the process easier, there are a few key factors to consider.

Step 1: Research the company offering the warranty. Look up reviews on Google and other sites, such as Yelp, to get an idea of how reliable the company is. Check the Better Business Bureau to make sure they are legitimate and have a good rating.

Step 2: Consider the type of coverage offered. Stated benefit plans tell you exactly what is covered, while exclusionary plans tell you what is not. Determine which type of coverage is better for your needs.

Step 3: Compare prices. Get the price of the warranty in writing, then call the company and ask for a better deal. You can also call other reputable warranty companies to see if they have a similar plan for less money.

Step 4: Consider your options. You have the choice between a car manufacturer’s warranty and a third-party provider. Research which one is best for you.

Step 5: Consider the industry standing and ratings of the warranty provider. Companies with higher ratings in industry standing, coverage, cost, transparency, and customer service are likely to be the most reliable.

Step 6: Check if the warranty is approved by your insurer

To check if your extended warranty is approved by your insurer, you should follow the steps below:

1. Check the mileage and date of purchase of your car to determine if your car is still under warranty. The owner’s manual will detail the warranty coverage when the car was initially sold, and you can check the odometer to see how many miles it has been driven.
2. If you are not the car’s first owner, ask if the warranty was transferred to you when you bought the car. Some manufacturers and model years may have different warranty terms when the car is sold as a used vehicle.
3. Buy an extended warranty before the manufacturer’s or dealer’s warranty expires to avoid any gaps in coverage.
4. Check with your local service center to see if your warranty is accepted. Some dealerships may not accept third-party warranties.
5. Read the “Driver Responsibility” or “Buyer Responsibility” section of the extended warranty plan to understand what the requirements and expectations are for coverage.
6. Be aware that regular maintenance must be done on the vehicle’s timeline, and that any modifications or use of the car for commercial purposes may void your policy.
7. Shop around for a reputable manufacturer, dealership, or independent provider that offers extended auto warranties.

Step 7: Check whether the warranty is still valid after purchase

How can you check if an extended warranty is still valid after purchase?

1. Check your car’s odometer to determine its mileage. If the mileage exceeds the warranty limit, the car is no longer covered.
2. If the car’s mileage does not exceed the warranty limit, look up the car’s original purchase date in the owner’s manual or by calling any dealership selling that car brand.
3. Ask whether the warranty was transferred to you when you bought the car.
4. If you’re buying an extended warranty, try to negotiate the price to get a better deal than what is originally offered before signing on the dotted line.
5. Purchase the extended warranty before the manufacturer’s or dealer’s warranty expires to avoid any gaps in coverage.
6. Ask if you can transfer the extended warranty to the new owner for a small fee.
7. Read the fine print of the extended warranty policy to understand what it covers and doesn’t cover, when coverage kicks in, where you can get service, and the costs involved.
8. Research the company providing the extended warranty and look for patterns of complaints.

Step 8: Ask for customer service inquiries

If you need assistance with your extended car warranty, there are a few ways to contact customer service.

1. Log in to your account. Many companies will have a way for you to access your account information online, where you can view any existing warranties you have, as well as contact customer service if needed.
2. Call customer service. Many extended car warranty companies have a toll free number you can call to speak with a customer service representative. Contact the company directly to find out the specific number to call.
3. Check your coverages. This will give you an overview of the coverages you have and any additional information you may need.

By taking these steps, you can contact customer service for extended car warranties and get the information and help you need.