Is an extended car warranty worth the cost? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial decisions by offering interactive financial calculators and tools that provide objective and unique content, by enabling you to conduct research and compare information for free – so that you can make sound financial decisions. Bankrate has agreements with issuers, including but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The deals that are displayed on this website come from companies that pay us. This compensation may impact how and when products are featured on this site, including the order in which they may appear within the listing categories in the event that they are not permitted by law. This applies to our mortgage, home equity and other home loan products. This compensation, however, does affect the information we provide, or the reviews you see on this site. We do not contain the vast array of companies or financial offerings that could be accessible to you. Aaron Greene/Getty Images
3 min read Published November 28th, 2022.
Jackie Lam Written Jackie Lam Written by Contributing writer Jackie Lam is a contributing writer for Bankrate. Jackie writes about auto loans. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are dedicated to helping their readers feel confident to manage their finances by providing precise, well-studied and well-researched data that breaks down complex issues into digestible chunks. The Bankrate promises
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This compensation could influence the manner, place and in what order products are listed, except where prohibited by law for our mortgage or home equity products, as well as other home loan products. Other factors, such as our own proprietary website rules and whether the product is available within the area you reside in or is within your own personal credit score could also affect how and where products appear on this website. We strive to offer an array of offers, Bankrate does not include specific information on every financial or credit product or service. A car warranty extension can safeguard you from financial pressure if your car requires urgent repairs. However, is an extended warranty worth the cost? It all depends on the specifics of the warranty as well as your specific needs. What is the price of an extended warranty for your car cost? When it comes to extended warranties for cars the cost is an important element. Extended warranties range in price, averaging between every year. The cost is contingent on a handful of factors like the service supplier. What is covered in your current warranty. The make, model , and year of your car. Your car’s mileage. What you live in and how much you drive. Cost of replacing components and labor. Discounts that you qualify for. Other elements that affect the cost of an extended car warranty are the amount that you are covered, as well as the amount of coverage, and the deductible. The greater your deductible, the lower the price of the insurance. On the flip side less your deductible is, higher the cost. Keep in mind that if you purchase your extended warranty with an auto loan then you’ll be paying not only for the warranty, but also interest on the amount. What does an extended warranty provide? A warranty extended to your vehicle usually covers unexpected, expensive repairs involving important systems in the vehicle, like heating/air, the engine and brakes. Your exact coverage will depend on the warranty you buy and could include labor, parts or both. Certain extended warranties include protection for roadside assistance tires , and any other costs related to the vehicle that you could encounter. Extended car warranty drawbacks While the extended warranty of your car could possibly help you save the cost of expensive repairs, let’s take a look at some of the cons that could be associated with purchasing one. There aren’t all repairs covered. since an extended car warranty usually matches the warranty of the new vehicle, but it also mirrors the limits like mileage and the repairs that are covered. Check the fine print and exclusions list when determining if the coverage offered is worth the price. There is a time limit for extended warranties on vehicles are only valid during the duration in the extension of warranty. In other words, it could extend the original warranty by two years and 24,000 miles. If you began with the warranty being three years and 36,000 miles, that would mean the full warranty will last 5 years with 60,000 miles. It’s possible that you won’t use it. In the case of those who did sign on an extended warranty only 45 percent ended up tapping into their extended warranty, as per a . The other 55 percent did not. People who bought one and then used it, suffered an overall loss of more than $375. You might not need it at all. Check the track record of the vehicle you’d like to purchase by doing your research, including reviewing reviews on cars as suggested by Renee Valdes, senior advice editor at Kelley Blue Book. “If the car is marketed as having a look at it carefully before signing to extend the warranty,” says Valdes. That money could be used for. The emergency savings fund can cover any repair to your car and not only repairs which are covered under the extended warranty — as there’s not an expiration date. When it makes sense to buy an extended vehicle warranty, an extended warranty is only useful in very specific circumstances. Extended warranties may be beneficial for buyers of luxury cars who plan to drive their vehicles for years beyond the bumper-to bumper and powertrain warranties, Valdes adds. “There’s nothing more frustrating than being faced with a huge bill for a broken item in your luxurious vehicle, especially when there’s no guarantee to cover the item,” says Valdes. If you’re and the manufacturer’s warranty has expired then it could be an ideal idea to get onto an extended warranty for your car. The manufacturer’s warranty information is on the label on the vehicle’s window. If you’re able to purchase a warranty it could help pay for covered repairs. It’s beneficial to find out what the costs is covered in the initial few years after purchasing. And to reduce instances of costly repairs, make sure you stay up-to-date with your car’s upkeep. “It’s always best to keep up with vehicle maintenance to ensure that your total repair costs remain low over the timeframe you own your vehicle,” says Valdes. The bottom line: An extended car warranty is not suitable for every person. To determine whether an extended warranty is worth it take your time and ask for a quote. Research what repairs your car may need in the next few years and make sure they’re covered under a particular warranty.
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Written by the writer who contributes to the project. Jackie Lam is a contributing writer for Bankrate. Jackie is a writer on auto loans. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain confidence to take control of their finances with precise, well-researched and informative information that breaks down otherwise complicated topics into digestible pieces.
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