How To Buy Extended Warranty
Buying a new or used car involves lots of decisions. What color do you want? How will you finance your purchase? Should you buy an extended warranty? An extended warranty can give you peace of mind after buying a new or used car, but these agreements have their limits and aren't always worth the cost. Learn how extended warranties work, when you may want one and other ways to cover the cost of car repairs.
how to buy extended warranty
New vehicles are covered by the manufacturer's warranty (or factory warranty) for a certain number of years or miles. Factory warranties are free and usually include both bumper-to-bumper and powertrain warranties.
Powertrain warranties cover the parts that put the vehicle in motion, including the engine, transmission, driveshaft, axles and differential. The average powertrain warranty lasts five years or 60,000 miles, whichever comes first.
You can buy extended warranties from auto dealers, vehicle manufacturers and independent companies. Dealers often suggest purchasing an extended warranty when you buy a car, but you can buy one at any time.
The cost of extended warranties varies depending on coverage, warranty length, the vehicle's predicted reliability and other factors. Warranty companies aren't regulated the way insurance companies are, so there are no restrictions on what they can charge. A recent survey reports the median price of an extended warranty was $2,458, but prices ranged from $1,615 to $3,208.
It's generally best not to buy an extended warranty at the time you buy a car, since you won't use it for several years. Wait until the manufacturer's warranty is nearing expiration or the deadline to purchase coverage is approaching.
Similar to an extended warranty, car repair insurance covers mechanical breakdowns and repairs that car insurance doesn't pay for. Car repair insurance is usually limited to newer cars, so it's not an option for everyone. However, it generally costs less than an extended warranty.
Purchasing a new car with a long factory warranty can help safeguard against expensive repairs. Hyundai, Kia and Mitsubishi vehicles all boast bumper-to-bumper warranties of five years or 60,000 miles and powertrain warranties of 10 years or 100,000 miles, whichever comes first.
Rather than purchase an extended warranty, your money might be better spent paying a bit more for a car whose predicted reliability is better than average. (Consumer Reports and J.D. Power are good sources of reliability data.) Then follow manufacturer recommendations for regular maintenance to keep your car in good shape.
are usually restrictive and offer less protection over time than other warranty options. You may be required to use only the dealership repair shop and their choice of parts, which can be inconvenient and more expensive.
Third-party providers specialize in extended car warranties. Where a dealership is focused on selling as many cars as possible, a third-party warranty company is focused on offering you protection that makes sense for your vehicle. A CARCHEX Extended Vehicle Protection Plan, for example, allows you the freedom to repair your vehicle wherever you like.
An extended auto warranty from a third-party company also gives you the option of customizing your coverage. A dealership likely only offers a couple of extended warranty options with limited miles and years. Reputable third-party warranty companies provide several coverage levels. CARCHEX even has several plans options within each coverage level.
When looking for the best extended car warranty, a trusted provider can make all the difference. You will want to find a company with a great Better Business Bureau (BBB) rating and endorsements from other reputable businesses in the industry. They should also offer plans that are backed by reliable insurance companies.
While companies like Endurance, Protect My Car, Concord Auto Protect, Delta Auto Protect, AutoAssure, and AA Auto Protection provide extended car warranties, they are not BBB accredited. Additionally, many of these companies have been in business less than 15 years. Companies like CARCHEX, for example, have been providing extended car warranties for more than 20 years.
With 89% of cars on the road today needing some kind of repair or service, an extended car warranty can save you money on those inevitable repair expenses. As you research buying a protection plan, be sure to ask potential providers these important questions. Knowing information about the coverage, cost, and length of contract can help you make the best decision for your extended warranty.
For example, an extended warranty may only need to cover major repairs for a few years before the car is sold or traded. A new car owner probably feels more comfortable with a comprehensive bumper-to-bumper warranty to protect their investment and most components of their vehicle.
If you have an older car that needs protection from just the most expensive repairs, a powertrain warranty may be the best fit. Powertrain warranties cover the engine, transmission, and related parts.
Each year, our research team collects hundreds of data points on warranty companies to rank the most reputable providers. We compare quotes and customer service through secret shopping, evaluate contract transparency, and analyze warranty coverage options. After our industrywide review, we found the best extended warranty companies to be:
This rating is based on types of extended warranty plans available, coverage terms, and added benefits like roadside assistance. A company scores high if it offers more than three plans and mileage limits over 150,000 miles. We also note if a company offers coverage for maintenance items like brake pads, because this is uncommon in the industry.
Transparency is an important quality to look for in extended warranty providers. Some companies make it easy to find sample contracts and read the fine print, while others make it difficult. Our transparency score takes into account sample contract accessibility as well as the presence of a money-back guarantee.
Our goal is to present a range of reputable extended car warranty providers for shoppers to compare. There is no one-size-fits-all answer. However, there are a number of extended car warranty companies that rise above the rest. We will review our top picks in this article.
Our team surveyed 1,000 extended warranty customers to learn what matters to consumers. When asked which factors are most important when purchasing an extended warranty, most respondents said coverage was the most important factor. Here are the top five things people look for when shopping for extended coverage:
These answers influenced how we weighted different categories of our methodology. We also asked customers if they were satisfied with their extended warranties or not. Overall, 65% were satisfied, while 13% were dissatisfied to some degree.
You can get extended warranties from manufacturers, like Honda and Ford, or from third-party companies like Endurance and CarShield. Manufacturer extended warranties offer factory-trained technicians and OEM parts, but they require you to visit a dealership for repairs and may not last as long as third-party options. Below are a few pros and cons of each.
Reputable extended car warranty company that offers six levels of coverage and has excellent customer reviews. It is our choice for Best Coverage and our top overall pick for extended warranty providers.
In the extended warranty industry, $50 a month is a great monthly payment. All the ForeverCar quotes our team received were around $50 per month for 36 months. Plans last three years regardless of mileage, so once the payment is over, the plan is over. Once your plan expires, you can reapply and start another contract if your car is still eligible.
With each of the plans, you can get benefits such as towing and rental car reimbursement. As for pricing, Olive is cheaper than many other top providers of vehicle service contracts. Our team reached out for quotes for different vehicles and received extended warranty rates that were consistently lower than other leading companies.
CarShield sells plans from multiple providers, including American Auto Shield, and operates as the liaison between the customer and a warranty company. It has several levels of coverage for new and used cars, but we especially like its protection for specialty vehicles and high-tech systems and components.
Protect My Car stands out because it has high customer satisfaction ratings, which is fairly unusual for the extended warranty industry. On the BBB, customers rate Protect My Car 4.1 out of 5.0, and on Trustpilot customers rate it 4.4 out of 5.0.
Protect My Car offers three plans: Supreme, Select, and Driveline. The Supreme plan is similar to a factory warranty, while the Driveline plan covers the powertrain plus a few more systems. Protect My Car can cover up to 200,000 miles, which makes it another good option for high-mileage vehicles.
Based on our research, autopom! tends to cost between $130 to $160 per month depending on the coverage level you choose. The total cost of an extended warranty from autopom! ranges from $4,700 to $5,800, which is slightly higher than the average range.
Based on our research, extended warranties lasting between three and six years cost anywhere from $1,600 to $4,500 on average. Bumper-to-bumper warranties tend to be more expensive, as they cover more components. Longer-lasting coverage also increases the contract price. Other factors that affect car warranty costs include:
A good price for a comprehensive extended car warranty is between $2,000 and $3,500 in total. Prices vary depending on the coverage and limitations you select. Many companies offer monthly payments that range from $80 to $125.
You can buy an extended warranty from a reputable third-party provider at almost any time after purchase. Manufacturers, on the other hand, usually require you to buy an extended warranty before the factory warranty expires. Some only allow you to buy one when you purchase the vehicle. 041b061a72