Why Should I Buy Extended Vehicle Protection Now? I Am Still Covered By The Manufacturer’s Auto Warranty

What is Vehicle Extended Protection?

Vehicle extended protection, also known as a vehicle service contract or an extended car warranty, is an optional form of protection that can be purchased to help cover the cost of repairs and other vehicle-related expenses once a manufacturer’s warranty has expired. It is not the same as a manufacturer’s warranty, but rather a supplemental service agreement that can be purchased for a specific set of repairs and vehicle-related expenses. It is important to note that an extended warranty is not technically considered a warranty by the Federal Trade Commission, and is therefore not regulated by the federal government.

The terms and coverages of an extended warranty vary widely depending on the provider, so it’s important to read the fine print carefully to make sure that the length of the contract, the terms, and the coverages meet your needs and don’t contain any exclusionary circumstances. Extended warranties are usually purchased through a dealership, the automaker, or an independent third-party service provider, and can provide additional protection for used cars that are outside the manufacturer’s warranty or extended coverage for new vehicles.

Comparing different extended warranty plans is highly recommended since rates and protection options vary between providers. This can be especially important if your vehicle is getting along in years and showing its true mileage, as this is the time when you would need protection the most.

Why Should You Buy Extended Vehicle Protection Now?

1. Car Warranty Coverage Gives Added Protection Against Repairs and Replacement Costs

A car warranty helps protect car owners against costly repairs and replacements. By purchasing an extended warranty plan, car owners can enjoy the benefit of extended coverage that can help finance repairs, choose the coverage best suited for them, and receive additional perks, such as 24/7 roadside assistance. With a car warranty, if a covered part breaks, the warranty provider will pay to fix it, eliminating the burden of the cost from the car owner. Additionally, car warranties don’t cover routine maintenance, normal wear and tear, or damage from accidents, giving car owners peace of mind that their warranties are only covering necessary repairs.

2. Auto Warranty Plans Cover Common Mechanical Failures and Defects

Auto warranty plans typically cover mechanical breakdowns due to normal wear and tear, extreme heat or cold, mechanical defects (including vehicle recalls), and poor maintenance. Covered components typically include the engine, transmission, drivetrain, brakes, suspension, steering, audio system, electrical system, air conditioning system, and related seals and gaskets. It is important to note that third-party warranty plans usually do not cover wear and tear items like brake pads, windshield wipers, and air filters, and do not cover damage from accidents, as that’s the purpose of car insurance policies.

3. Car Warranties May Cover Roadside Assistance and Rental Car Reimbursements

Car warranties typically include coverage for major mechanical parts such as the engine and transmission, as well as additional features such as 24/7 roadside assistance, rental car reimbursement, trip interruption service, and tire protection. Routine maintenance and damage caused by normal wear and tear are usually not covered.

4. Car Warranty Plans May Cover Component Powertrain, Bumper, and Tire Damage

Extended vehicle protection plans can cover a wide range of damages, from mechanical failures to rust and corrosion.

Bumper-to-bumper coverage is the most comprehensive type of plan and covers most car parts in the event of a mechanical failure.

Powertrain warranties only cover the parts of your vehicle that make it move, such as the engine, transmission, and drive axles.

Enhanced powertrain plans cover other major systems like air conditioning and brakes.

Restraint system warranties cover seat belts and airbags, while corrosion warranties cover rust and corrosion damage.

Emissions control warranties cover emissions-related parts, while hybrid and electric vehicle component warranties cover components specific to those types of vehicles.

Finally, accessory warranties cover a wide range of non-mechanical OEM parts including navigation and sound systems.

5. Car Warranties May Cover Mechanical Failure due to Factory Defects

The warranty coverage for mechanical failure due to factory defects is typically provided by the manufacturer’s warranty. This type of warranty covers any defects in workmanship or materials present in the vehicle when it was manufactured, as well as any problems that arise due to normal wear and tear. This type of coverage can include repairs for the vehicle’s major parts and systems, as well as the engine, transmission, and any power components that connect to the car’s wheels. However, it does not cover routine maintenance or damage from improper use and lack of maintenance. Additionally, manufacturer’s warranties typically do not cover cosmetic items, car accidents, or environmental damages.

6. Car Warranties May Cover Powertrain and Engine Coverage

Car warranties typically provide two types of engine and powertrain coverage: bumper-to-bumper coverage and powertrain coverage.

Bumper-to-bumper coverage, also known as an exclusionary warranty, covers most car parts in the event of mechanical failure, except for a few specific components. It is usually more expensive than powertrain coverage but provides more comprehensive coverage.

Powertrain coverage focuses on the parts of your car that make it move, such as the engine, transmission, drive axles, and related parts. It usually costs less than bumper-to-bumper coverage but also covers less.

Some companies also offer levels of coverage in between these two, which may vary in coverage and cost.

7. Car Warranties May Cover Labor Costs and Parts

Car warranties generally cover parts and labor costs related to mechanical defects, poor maintenance, extreme heat or cold, and normal wear and tear. More specifically, parts and labor costs related to the engine, electronics, air conditioning systems, and the transmission are typically covered. However, routine maintenance such as tune-ups, adjustments, alignments, tire replacement, oil and filter changes, and fluid refills are usually excluded. In addition, betterment and consequential loss clauses may prevent certain parts from being fixed. Extended warranties also typically do not cover cars used for commercial purposes, such as taxis, commercial delivery vehicles and cars used for ride-hailing. In some cases, these types of coverage may be available for an additional cost.

8. Car Warranties May Cover Emissions and Corrosion Warranty A

Car warranties usually include emissions and corrosion coverage in the form of an emissions warranty and a corrosion warranty. An emissions warranty covers the components that limit a car’s emissions and is often complex, warranting some parts for shorter periods and others for longer periods, depending on the state. A corrosion warranty covers damage associated with rust and corrosion and helps pay for the damage if a car starts to rust.

9. Car Warranties May Cover Vehicle Eligibility and Coverage Eligibility

Car warranty eligibility and coverage requirements can vary depending on the type of warranty, the manufacturer and the third-party vendor. Generally speaking, most warranties cover defects and malfunctions due to normal use, such as extreme heat or cold, mechanical defects, poor maintenance, and factory-installed parts.

Manufacturer’s warranties generally cover basic parts and systems, as well as bumper-to-bumper protection, powertrain coverage, and sometimes secret car warranties. Aftermarket warranties, on the other hand, can offer extended protection, adjustment coverage, wrap coverage, and corrosion coverage.

It’s important to keep in mind that most contracts have exclusions. Commonly excluded items include routine maintenance such as tune-ups, adjustments, alignments, tire replacement, oil and filter changes, and fluid refills; wear and tear, such as brake pads, tires and clutches; and betterment and consequential loss clauses that can limit repair options and nullify claims. Additionally, extended car warranties usually don’t cover cars used for commercial means, such as taxis, commercial delivery vehicles and cars used for ride-hailing.

10. Car Warranties May Cover Travel Services and Car Care Expenses

Car warranties typically cover a range of services and repairs related to major mechanical parts, such as the engine, transmission, brakes, and suspension. Additionally, certain extended warranty plans may offer additional benefits such as roadside assistance, rental car reimbursement, trip interruption services, and tire protection. However, car warranty companies do not cover routine maintenance like oil changes, scheduled maintenance items like transmission fluid, cosmetics, normal wear and tear, or damage from lack of maintenance or improper use. Furthermore, car warranties do not cover car accidents or environmental damage, which are typically covered by car insurance policies.

When Does Your Manufacturer’s Auto Warranty Expire?

When does your manufacturer’s auto warranty expire? Generally, most automakers provide three years/36,000 miles (whichever comes first) of bumper-to-bumper coverage and five years/60,000 of powertrain warranty protection. Some can even go as long as 10 years or more, but repairs are usually limited to authorized dealers or where you initially purchased the vehicle. You may need to purchase an extended warranty from the manufacturer at the time you purchase your car or before your factory warranty expires to continue coverage past the manufacturer’s initial warranty period.

Best Extended Vehicle Protection Plans

1. Who stands behind the extended vehicle warranty?

The extended vehicle warranty is typically backed by either the vehicle’s manufacturer or a third-party provider. The manufacturer will often offer an extended warranty when buying a new car or a manufacturer-certified pre-owned vehicle, while third-party providers offer a more flexible coverage with regards to vehicle and repair shop eligibility, coverage limitations, and payments. It is important to thoroughly research any third-party provider to ensure that they have a good track record and are able to back the warranty in case of any issues. Additionally, you should review the terms of the warranty to ensure it meets your needs and budget.

2. Have you shopped for the best price?

Comparing the price of an extended vehicle protection plan is an important step when looking for the best coverage option for your vehicle. To ensure you are getting the best deal, it is essential to shop around, compare plans, and investigate the claims and repair process of a company.

When researching plans, look at sample contracts to get an idea of the coverage, limits, and exclusions offered. Prices will vary depending on the year, make, model, and mileage of your car; however, it is still helpful to compare plans from different providers to ensure you are getting the best deal. Additionally, investigate how well companies handle claims and repairs. Look for companies that handle claims in-house, allow customers to choose a certified repair shop, charge fair prices, and allow customers to choose a deductible that meets their budgets.

By shopping around, comparing plans, and investigating the claims and repair process of a company, you can be sure you are getting the best deal on an extended vehicle protection plan.

3. Do you know what’s covered?

Extended vehicle protection plans usually include coverage for major mechanical parts, such as engines and transmissions, as well as add-ons like 24/7 roadside assistance, rental car reimbursement, trip interruption service, and tire protection. However, they typically don’t cover routine maintenance items like oil changes, scheduled maintenance like transmission fluid, car accident or environmental damage, or normal wear and tear. Additionally, some plans have betterment and consequential loss clauses that limit the types of repairs that can be made and may nullify any claims.

4. What’s your history with repair costs?

What’s your history with repair costs? Before you consider purchasing an extended warranty, it’s important to assess how much you have spent on out-of-warranty repairs in the past. Consider adding up the total amount you have already spent and compare it to the cost of the extended warranty to help you decide if it’s worth the investment. Additionally, if you’ve had several flat tires in a short span of time, a road-hazard warranty may be something to consider as it could save you money in the future.

5. Do you really need this warranty?

When it comes to deciding whether or not to purchase an extended warranty, it’s important to consider the pros and cons. For some drivers, the peace of mind of a warranty may be worth the cost, and for others, self-insuring with an emergency fund may be a better option. To make the best decision for your own situation, it’s important to ask yourself a few questions. Do you get nervous when the standard warranty expires? Do you have the discipline to save the money you would have spent on an extended warranty? Will a costly repair bill have a major impact on your budget? Are you likely to keep your car for a long time?

Overall, the data suggests that most cars are reliable, so it may be wise to weigh the cost of the extended warranty against the cost of potential repairs. If the cost of the warranty outweighs the cost of the repairs that you might need, then purchasing an extended warranty can be a good decision. Additionally, if the peace of mind is worth the cost to you, then it may also be a good decision. However, if you can save the money and still have security, then self-insuring may be the best option.

6. How much does it cost?

When it comes to extended car warranties, how much does it really cost? The price tag for extended warranties can range from $1,000 to $5,000, depending on factors such as the car’s make, model, condition, and the contracted length of coverage. Most providers also charge a monthly payment, which is typically two times the amount you will likely pay for repairs.

When you compare the cost of an extended warranty to the 5-year average repair costs, it’s easy to see why you may not be getting the greatest value for your money. The average cost of an extended warranty is around $3,025, which is more than double the average amount US drivers spend on auto repairs over a 5-year period. So, if you only need coverage for a shorter period of time, it’s likely that you will be paying more than you need to.

To get the best value, it’s important to negotiate with the dealer to get the price down. Offering 60% of the cost of the contract is a good place to start. And if you decide to roll the cost of the warranty into your car loan, make sure you factor in the long-term cost, including interest payments.

7. Is there a deductible?

Yes, there is a deductible associated with the extended vehicle protection plan. The deductible amount varies depending on the company and the plan, but it typically ranges from $50 to a few hundred dollars. The deductible may be “per visit” or “per repair,” meaning you may have to pay a deductible for each part that needs to be repaired. Higher deductibles usually result in lower premiums, while lower deductibles typically cost more.

8. Does the warranty cover future vehicle purchases?

No, most extended warranties do not cover future vehicle purchases. Extended warranties are usually specific to the car they are purchased for and cannot be transferred to another vehicle. However, some extended warranties may offer the option to purchase additional coverage for future vehicles.

9. Does the warranty require a lawyer?

No, a car warranty does not require a lawyer. When purchasing a car warranty, you do not need to hire legal counsel, as the process is typically straightforward. However, it is important to read the fine print of the warranty contract and be aware of the repair approval process, as well as any potential voiding factors. It is also a good idea to get quotes from multiple warranty companies and to not accept the first price quoted.

10. Does the warranty have any limitations?

The limitations of the warranty depend on the type of coverage you have. Generally, manufacturers provide three years/36,000 miles (whichever comes first) of bumper-to-bumper coverage and five years/60,000 of powertrain warranty protection. Some can even go as long as 10 years or more. Third-party warranty providers tend to offer more flexibility than manufacturers in terms of cost, repair shop availability, and coverage options, with term lengths up to 15 years and 250,000 miles.

In terms of limitations, all contracts will have exclusions, so it is important to read through the fine print of the contract before signing it. Additionally, repair services may be limited to authorized dealers or the place where you initially purchased the car. Moreover, repairs may be subject to deductibles or service fees, so make sure you are aware of these costs before signing.