Skip to Main Content

Is an extended car warranty worth the price?

Woman and man in car, both laughing
Aaron Greene/Getty Images
Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .

An extended car warranty may help relieve you of financial stress should unexpected repairs to your car happen. But is an extended car warranty worth it? It largely depends on the details of the warranty and your needs. 

How much does an extended car warranty cost? 

When mulling over whether you want to get an extended car warranty, cost is a major factor. Extended warranties range in price, and the averages from four reputable companies — Endurance, Carchex, Protect My Car and CarShield — come out to about $1,480. 

The price tag of an extended car warranty can vary and hinges on a handful of factors, such as: 

  • The provider. 
  • What is covered in your existing warranty. 
  • The make, model and year of your car. 
  • Where you live and how much you drive. 
  • The cost of replacing parts and labor. 
  • Discounts you are eligible for. 

Other factors that impact the cost of an extended car warranty include the extent of coverage, the level of coverage and your deductible. The higher your deductible, the lower the cost. On the flip side, the lower your deductible, the higher your premium.  

Extended car warranty drawbacks 

While an extended car warranty can potentially help you save on the cost of expensive repairs, let’s take a look at some of the cons that might come with getting one.  

Not all repairs are covered 

Because an extended car warranty typically matches the warranty of a new car, it also mirrors the limits such as mileage, time period your car will be covered and exactly what repairs are included. Look at the fine print and the exclusions list when determining if the coverage offered is worth the cost.  

There’s a time limit 

Extended car warranties are only good for the period of the extended warranty. For instance, it might extend your original warranty by two years and 24,000 miles. If you started with a warranty that was three years and 36,000 miles, that would mean the full warranty is five years and 60,000 miles.  

You might not end up getting what you paid for 

Among those who did hop on an extended warranty only 45 percent ended up tapping into their extended warranty, according to a Consumer Reports survey. The remaining 55 percent did not. Of those who purchased one and used it, they suffered a net loss of more than $375.  

You might not need it in the first place 

Know the track record of the vehicle you want to purchase by doing your research, including looking at car reviews, recommends Renee Valdes, advice editor at Kelley Blue Book. “If the vehicle boasts a solid track record, think twice before signing on for an extended warranty,” says Valdes.  

That money could be put toward an emergency savings. Should you end up not getting your full money’s worth, you might be better off putting what you paid as a premium into an emergency savings fund. The advantage of going this route is that the money can be used for any car repair, and not just for what’s covered under the extended warranty — and there’s no expiration date.  

When it makes sense to buy an extended car warranty 

An extended car warranty can only be useful in very certain situations. For instance, if you intend to keep your car for a long time, explains Valdes. Extended warranties might also work well for luxury car buyers who plan to drive their cars for many years beyond the bumper-to-bumper and powertrain warranties, she adds. “There’s nothing worse than getting stuck with a big bill for a broken item on your luxury vehicle when there’s no warranty to cover the item,” says Valdes.  

If you’re buying a used car and the manufacturer’s warranty has ended, it might be a good idea to hop on an extended car warranty. This information can be found looking at the sticker tag on the window of a car. If you can afford to purchase a warranty, it can help pay for covered repairs.  

It’s helpful to do your research on what the car maintenance costs will be during the first years of ownership. And to reduce instances of costly repairs, stay on top of your car’s upkeep. “It’s always best to keep up with car maintenance so your overall repair costs remain low over the timeframe you own your vehicle,” says Valdes.  

The bottom line  

An extended car warranty is not for everyone. To see if an extended warranty is worth it, do your homework and get some quotes. It also can be helpful to see what types of repairs your car could potentially need in the next few years and make sure it’s covered under a particular warranty.  

 

 

Written by
Jackie Lam
Contributing writer
Jackie Lam is a contributing writer for Bankrate. Jackie writes about auto loans.
Edited by
Auto loans editor