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Is a Car Extended Warranty Worth It?

A car’s extended warranty is a great asset for drivers who plan to own their vehicles longer than a few years. They’re also a good buy for anyone who has a car notorious for needing repairs.

Read on to find out how to narrow down the many plans and providers and find the perfect coverage for your car and needs. CARCHEX has affordable, flexible coverage options that work for almost any vehicle.

What Is a Car Extended Warranty?

Let’s start with the working definition:

  • An extended warranty is basically a vehicle service contract that covers the repair costs after you purchase a vehicle.
  • You pay a certain amount each month for this service plan until it is paid off. You can also opt for a one-time, annual payment.
  • Repairs approved in the service contract are paid for regardless of price.
  • A car’s extended warranty is sold separately—either by a dealer or a third-party company—from a basic new car warranty, which is often referred to as a factory warranty.
  • An extended warranty may be folded into the cost of your car (if purchased from the dealer) or billed separately (if purchased from a third-party seller).

Is an Extended Warranty Worth It on a New Car?

When you purchase a new car, you will get a manufacturer’s warranty included in the price of the purchase. Under the manufacturer’s warranty, specific repairs are covered for a certain number of years or miles. Once this warranty expires, your car is no longer protected.

If you plan to keep your new vehicle for a long time, and your manufacturer’s warranty only lasts a few years or less than 50,000 miles, then an extended warranty is worth the extra financing to pick up where the factory warranty leaves off.

Research the common repairs you should expect with your new car’s model and choose the appropriate amount of coverage for your vehicle.

Young Latin American woman at a garage talking to a mechanic about her car

Should I Purchase an Extended Warranty for a Used Car?

You probably don’t expect your new vehicle to require repairs, but an extended warranty for a used car can extend save you thousands of dollars in repairs and extend the life of a high mileage car.

A new transmission could cost almost $4,000 in some vehicles. This is a hefty bill to foot, especially all at once. However, the right vehicle service contract or extended warranty can cover this type of repair for thousands less. Would you rather pay $4,000 out-of-pocket for a repair or $1,500 for a service contract? With monthly payments and low deductibles, you could save on costly replacements.

Powertrain vs. Bumper-to-Bumper Extended Warranties

Extended warranties can come with many levels of coverage. In order to gauge the level of coverage offered, you need to know the two most common coverage plans.

Powertrain Warranty

A powertrain extended warranty covers repairs for the most essential systems in your vehicle:

  • Engine
  • Transmission
  • Drive axle

These systems are also typically the most expensive to repair, and many factory warranties will cover the powertrain for more years and miles than their basic limited warranty.

Bumper-to-Bumper Warranty

A bumper-to-bumper extended warranty is sometimes known as an exclusionary plan because it lists only items that are not covered. It may cover hundreds of your car’s components. These plans cost more money, but they could save you money in the following areas:

  • Steering
  • Electrical
  • Accessories (e.g. GPS)
  • Suspension
  • Air conditioning and heating

Does a Car Extended Warranty Cover Repairs Due to Regular Wear?

A new or pre-owned vehicle will need maintenance after many years and miles on the road, but an extended warranty is not meant for routine repairs. Your service contract is meant to cover faulty items that fail despite proper care.

Extended warranties do not cover the following:

  • Routine maintenance (e.g. oil changes)
  • Wear and tear items
  • Damage caused by weather or acts of nature
  • Neglect
  • Regular replacements (e.g. tires, wiper blades, or brake pads)

What You Should Know About the Cost of Extended Warranties

Typically, the warranty provider will offer a variety of coverage plans from basic to top-notch, with a corresponding range of prices.

For example, an extended car warranty with the heaviest coverage available might give you bumper-to-bumper coverage at a price higher than a warranty with less.

Consider that if you choose to buy an extended car warranty from a dealer, many will add that into your car’s monthly payment—which means that you could be paying interest on your warranty. Because third-party providers bill separately, you won’t accrue interest.

What Should I Expect to Pay for a Vehicle Service Contract?

Generally, you will find more competitive prices with a third-party provider. You will also pay more for luxury vehicles, and the model and year of your car can also influence the price.

Expect to pay several hundred dollars for a service contract, as well as a deductible between $100 to $200 for each repair. The amount can be paid in smaller monthly payments for your convenience.

CARCHEX offers affordable payment plans to our customers. For example, an extended auto warranty for a 2014 Toyota costs an average of just $56 per month. That’s under $700 for the year. If your car needs a $1,200 repair, then the price is easily justified. What’s more, we offer service contracts that have $0 deductible.

Car Extended Warranties at CARCHEX

Given the moving parts you face when shopping for your car warranty, it certainly helps if you can trust your provider. CARCHEX has maintained the trust of the car warranty industry for more than 20 years. We hold an A+ rating from the Better Business Bureau and consistently rank at the top of the industry.

CARCHEX Extended Vehicle Protection Plans are available in several coverage levels with multiple plan options under each tier. All of our plans are backed by trusted providers. Here are our five levels of coverage:

  • Bronze—Cover your vehicle’s powertrain for up to 6 years with this basic plan.
  • Silver—Get coverage for your powertrain, AC, and fuel system components for up to 7 years.
  • Gold—This plan is perfect for cars with more than 60,000 miles, and it covers many major system components for up to 10 years.
  • Platinum—Platinum plans cover 100s of components with plans between 5 and 10 years.
  • Titanium—Get bumper-to-bumper coverage for your vehicle with terms between 7 and 10 years.
CARCHEX Vehicle Protection Plans

What Else Will You Receive as a CARCHEX Customer?

Our services don’t end at repairs. We’re just getting started. As a CARCHEX customer, you’ll also receive:

  • Peace of mind benefits, including roadside assistance, trip interruption coverage, rental car reimbursement, and more
  • Excellent customer service from our expert specialists
  • A network of over 30,000 repair shops and mechanics to choose from for your repairs
  • Direct payments to the repair facility, so you don’t have to come up with the money up front
  • Easy claims process
  • Transferable coverage for a small fee
  • 30-Day Money Back Guarantee
  • Plans backed by reputable providers to ensure repairs are paid for
  • Industry trust and endorsements from CARFAX, Kelley Blue Book, Edmunds, and more
Why CARCHEX? Icons

How Does CARCHEX Compare to Competitors?

There are many third-party, extended auto warranty providers, but they don’t all provide the same customer satisfaction. See how CARCHEX ranks among its competitors.


Years in Business BBB Rating BBB Accreditation Sells Insured Plans

Partnerships and Endorsements

CARCHEX 21 A+ Yes Yes CARFAX, SiriusXM, RepairPal, DMV.org, CarAdvise, AutoBlog, Zubie, Kelley Blue Book, Edmunds.com, and many more
Endurance 14 C+ No Yes Katie Osborne, Courtney Hanson, Vehicle Protection Association
Protect My Car 14 Not Rated No Yes ACVPP, Contact Center Compliance, DataOne Software
AutoAssure 9 B No No Vehicle Protection Association, D&B Verified

Updated May 2020.

Call CARCHEX Now to Learn More

When it comes to car extended warranties, CARCHEX customer service representatives can help you decipher the jargon, the options, and the prices of any extended warranty for you car. Finding an online quote is fast, free, and easy. You can also call CARCHEX at 866-261-3457 to speak to a vehicle protection specialist today.


Better Business Bureau: https://www.bbb.org/greater-maryland/business-reviews/extended-warranty-cotract-service-companies/carchex-in-hunt-valley-md-23015869

Thoroughly Reviewed: https://thoroughlyreviewed.com/car-warranty/carchex-reviews/



CARCHEX 118 Shawan Road, Suite 210 Baltimore, MD 21030 (FL License # E155490)

© 2018 Carchex. All rights reserved.

We proudly offer the CARCHEX No-Haggle, Lowest Price Everyday Guarantee™ for all of our auto warranty and car inspection programs.
Consistent with consumers’ understandings and expectations of the market in which CARCHEX operates, CARCHEX uses the terms “warranty”; “extended warranty”, “extended auto warranty”, “extended service protection plan” and similar terms to describe the more technical term “vehicle service contracts”. For more information, see this FTC link or learn more here or by reviewing CARCHEX’s website.
CARCHEX markets and sells extended warranties on behalf of third party extended warranty providers, and your extended warranty will be between you and the provider. This website site is intended solely for the purpose of providing general information regarding the purchase of extended warranties. Specific contract terms, rates, taxes, fees and other charges are determined upon validation of vehicle information and acceptance by the extended warranty provider, for which CARCHEX is not responsible. Extended warranties may not be sold where prohibited by law.
CARCHEX 118 Shawan Road, Suite 210 Baltimore, MD 21030 (FL License # W469753)
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