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How to Find the Best Extended Car Warranty

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An extended car warranty or vehicle service contract (VSC) could protect you against surprise car bills. But that piece of mind comes at a steep price if you wind up paying for identical coverage that came free with your manufacturer warranty.

We’ll help you ask the right questions to make sure you’re getting the coverage you want for a fair price from reputable providers.

3 questions to ask before you get an extended warranty

A VSC is an optional product sold through dealerships and by extended auto warranty companies. Dealerships push them when you’re car shopping, but you could buy a VSC at nearly any time. Steer toward plans offered by reputable extended car warranty companies such as the ones we list below. Avoid shady providers that pump out the junk mail and robocalls telling consumers that you absolutely need one right now.

Extended warranty contracts can be long and complicated, each offering different types of protection. Experts say the best way to understand them is to get a copy of the contract and read it carefully. But if you’re squeezed for time, use these questions to get the answers you need from a salesperson or when reading over a brochure or plans online.

1. How long does the extended car warranty last?

All extended car warranties expire after a certain amount of time or number of miles. A VSC’s term may be as short as one year/12,000 miles or as long as 10 years/100,000 miles. Keep in mind this typically refers to the total time and miles on the vehicle. So, if you bought an extended car warranty of six years/72,000 miles, that’s the total time and miles the car would be covered, not an additional six years or 72,000 miles.

Extended warranty vs. manufacturer warranty

It’s standard practice for carmakers to include a warranty promising to cover certain defects or malfunctions for the first part of a car’s life: three years/36,000 miles “bumper-to-bumper” and five years/60,000 for powertrain coverage is typical. This manufacturer warranty is included in the price of a new car, no extra charges and follows the car, even if you sell it. Extended warranties are always extra, anywhere between $1,200 and $2,500 or higher.

2. What does the extended warranty cover?

Most providers offer three main types of extended warranty based on the level of coverage and the age of your car: new, used and certified pre-owned. Manufacturers like Toyota provide a tool on its website where users can sort by vehicle type and compare available plans. Extended auto warranty companies like Endurance provide sample contracts on its site.

You’ll want to answer:

  • What parts are covered (or excluded)? Components may fall under these categories:
    • Powertrain or drivetrain: What powers the vehicle: the engine, transmission and drive axle.
    • Electronics: Computers, electronic components and electrical systems.
    • Chassis: Suspension, steering and brake systems.
    • Heating/cooling: Air conditioning, heating and cooling systems.
    • Technology: Touch screen, navigation, audio and communications devices.
  • Is roadside assistance included?
  • Will you be reimbursed for rental car expenses while your car’s in the shop?
  • Can you get repairs done anywhere in the nation? Do they have to be preapproved?
Important: Compare extended warranties with your manufacturer warranty. As we mentioned earlier, automakers provide warranties on all of their vehicles automatically. Ask how much of that manufacturer warranty remains or search for yourself by your Vehicle Identification Number (VIN). For example, if you buy a two-year-old Ford with 24,000 miles on it, then you still have one year and 12,000 miles left of the three-year, 36,000-mile bumper-to-bumper warranty and you have three years, 36,000 miles left of the five-year, 60,000-mile powertrain plan.
Is an extended warranty right for you?

It doesn’t make sense to pay for coverage you’re already receiving, but it might be worth the cost of an extended car warranty if it covers those parts for longer or provides extras like roadside assistance that are important to you. An extended car warranty also might be worth it if you have an exotic car with high-end technology or parts that are hard to find. Car clubs like AAA or plans through your insurance provider may provide things like roadside assistance for less.

3. What does the extended warranty cost?

Extended warranty prices vary depending on the type of car and coverage. A typical price for a six-year, 72,000-mile warranty for a vehicle up to six years old is around $2,000. Lenders often allow you to fold the cost of the extended auto warranty into your auto loan if you purchase it at the same time that you buy your vehicle. And in some cases, the only time you could purchase a manufacturer-provided VSC is at the same time you purchase your car from the dealer. But keep in mind you’ll also pay interest, which means the VSC becomes that much more expensive. You can always buy one separately from an extended warranty company, which might allow you to pay for it through monthly installments.

Negotiate an extended warranty
Unlike some other dealer fees, you may be able to negotiate the price of an extended warranty. If you plan to buy a VSC at the same time you’re buying a car, ask the dealer to reduce the price of the car to make up the difference.
Extended warranty vs. mechanical breakdown insurance

These products are essentially the same thing, each meant to pay the repair bills when your car breaks. Differences might come down to price — mechanical breakdown insurance (MBI) tends to be less expensive — and whether providers are licensed. In order to be considered an insurance product, your state insurance commissioner might require that it’s only offered by a licensed insurance agent and even provide a searchable database of MBI providers.

Research extended car warranty companies

Don’t just go with the first car warranty company you see. Whether you’re sitting at a dealership about to buy a car or your manufacturer warranty is set to expire and you have some mail advertisements in hand, do your research. Customer reviews on sites like the Better Business Bureau (BBB) can give you insight, but see if consumers have filed complaints with your state’s attorney general. Some states, including Michigan and Florida, offer resources by phone or online.

Here are three popular auto warranty companies.

Endurance

Endurance offers five coverage levels, but all include roadside assistance and substitute transportation. You may use your plan at any licensed, authorized repair facility in the U.S.

Carchex

Carchex also offers five levels of coverage, with terms up to 10 years. Unlike Endurance, which is a direct provider, Carchex is a marketplace for other VSC providers.

Concord Auto Protect

Concord offers three levels of protection plans and like Endurance, only sells its own plans.

What about seller-provided warranties?

In addition to manufacturers like Toyota or Honda, used car dealers such as CarMax, Carvana, Vroom and more provide some type of used car warranty or money-back guarantee with each car they sell plus a VSC.

  • Carvana offers the Carvana Limited Warranty for 100 days or 4,189 miles. It also sells an extended warranty called Carvana Care.
  • Vroom provides a 90-day, 6,000-mile limited warranty. It, too, sells a vehicle service contract.
  • CarMax provides a 90-day, 4,000-mile limited warranty. Like the others, it sells an extended service plan, MaxCare.

Change your mind? Cancel. Most vehicle service contracts come with a cancellation policy — a full refund within 30 days is standard — whether you buy it through a dealership or extended warranty company. It’s a potentially big buy, so if you get home and think twice, especially when buying a new or used car at the same time, call right away.

Consider extended auto warranty alternatives

Many buyers, especially used car buyers, want the reassurance an extended warranty could provide. But it’s not the only way to prepare for breakdowns or repairs. Aside from befriending a mechanic, you could start or keep a rainy day fund for when something breaks. You hopefully won’t need it if you’ve bought a reliable and well-rated vehicle that holds its value, but you’d still have a nice nest egg when it’s time to buy or lease your next car.

 

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