Is an extended car warranty worth it? Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make smarter financial decisions by offering interactive tools and financial calculators that provide objective and unique content, by enabling you to conduct research and compare data for free - so that you can make informed financial decisions. Bankrate has agreements with issuers, including but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The deals that are displayed on this website come from companies that pay us. This compensation can affect the way and where products appear on the site, such as the order in which they may be listed within the categories of listing and other categories, unless prohibited by law. Our mortgage or home equity, and also other products for home loans. But this compensation does have no impact on the information we publish, or the reviews appear on this website. We do not contain the entire universe of businesses or financial deals that might be accessible to you. Aaron Greene/Getty Images
3 min read Published November 28, 2022
Jackie Lam Written Jackie Lam Written by Contributing writer Jackie Lam is a contributing writer for Bankrate. Jackie is a writer on auto loans. Written by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate from late 2021. They are committed to helping readers gain the confidence to take control of their finances with concise, well-studied information that breaks down complicated topics into manageable bites. The Bankrate promises
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So, this compensation can impact how, where and in what order products appear within listing categories in the event that they are not permitted by law. This is the case for our mortgage home equity, mortgage and other home loan products. Other factors, such as our own proprietary website rules and whether a product is available within the area you reside in or is within your self-selected credit score range can also impact the manner in which products are featured on this site. While we strive to provide an array of offers, Bankrate does not include specific information on each credit or financial service or product. An extended car warranty can safeguard you from financial pressure when your vehicle requires emergency repairs. What is the best way to determine if an extended car warranty worth the cost? It all depends on the details of the warranty as well as your requirements. How much does an extended warranty for your car cost? When it comes to extended warranties for cars the cost is an important aspect. Extended warranties vary in cost in a range of $0 to $1000 every year. The price tag hinges on several factors, such as: The provider. What is covered in your existing warranty. The make, model and year of your car. Your car's mileage. The location you live in and how often you drive. The cost of replacing parts and labor. Discounts you can claim. Other factors that impact the cost of an extended warranty include the length and coverage offered, extent of coverage, and the deductible. The higher your deductible, the lower the price of the insurance. On the flip side the lower your deductible, higher your cost. Remember: 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 exactly does an extended warranty cover? A warranty extended to your vehicle typically covers unforeseen costly repairs that affect the key systems of the vehicle, including heating and air conditioning, the engine and brakes. Your exact coverage will depend on the warranty you purchase and could include labor, parts or both. Some extended warranties offer optional coverage for roadside assistance, tires and other vehicle-related expenses you may encounter. The drawbacks of extended car warranties While an extended warranty for your vehicle could be a great way to save money on the cost of expensive repairs, let's take a look at the negatives you might encounter when purchasing one. Not all repairs are covered because an extended warranty typically matches the warranty of the new vehicle, but it also reflects the limitations such as mileage and the types of repairs covered. Check the fine print and the exclusions list before deciding if the coverage offered is worth the cost. There's a limit on time. car warranties are only good for the time period that the warranty is extended. For instance, it might extend the original warranty by 2-years and 24,000 miles. If you had a warranty that was 3-years and 36,000 miles. That would mean the full warranty lasts 5-years and 60,000 miles. You may not want to use it. In the case of those who did sign on an extended warranty only 45 percent of them tapped to their warranty's extended period, according to a . The other 55 percent did not. The people who bought one and used it experienced an overall gain of greater than $375. You might not need it in the first place. Be aware of the history of the vehicle you'd like to buy by conducting your research, including looking at car reviews, recommends Renee Valdes, senior advice editor at Kelley Blue Book. "If the car is marketed as having a look at it carefully before signing on for an extended warranty," says Valdes. This money could be used for. Emergency savings can be used to pay for any repair on a car and not only repairs that are covered by the extended warranty as there's not an expiration date. When it makes sense to buy an extended car warranty, an extended warranty can only be used in very specific circumstances. Extended warranties may be beneficial for luxury car buyers who plan to drive their cars for many years beyond the bumper-to-bumper and powertrain warranties, Valdes adds. "There's nothing more frustrating than being stuck with a big bill for a damaged or broken part on your car that there's no guarantee to cover the product," says Valdes. If your manufacturer's warranty has ended, it might be beneficial to sign onto an extended warranty for your car. The manufacturer's warranty information can be found on the label on the vehicle's window. If you can afford to buy a warranty, it can help pay for covered repairs. It's beneficial to find out what the costs is covered in the initial year of owning the vehicle. In order to avoid costly repairs, make sure you stay up-to-date with your car's upkeep. "It's always best to keep up with maintenance on your car so that overall repair costs remain low over the period you own your car," says Valdes. The bottom line is that an extended car warranty is not suitable for all. To see if an extended warranty is worth it take your time and ask for a quote. Research what repairs your car may need in the coming years, and ensure that they're covered under a particular warranty.
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Written by Contributing writer Jackie Lam is a contributing writer for Bankrate. Jackie is a writer on auto loans. Written by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are passionate about helping readers gain confidence to manage their finances through providing precise, well-researched and informative information that breaks down complex topics into manageable bites.
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