When you buy a car whether it’s brand new or used, you always try to determine how reliable the vehicle is and the cost of future repairs. At one point in the buying process, the dealership might offer you an extended car warranty. This is supposed to protect your vehicle after the manufacturer’s coverage expires. It can also help cover the costs of repairs and services that may not be included in the manufacturer’s coverage. But not all extended car warranties offer the same coverage.

What is an extended car warranty?

An extended car warranty covers the cost of repair when a vehicle breaks down due to regular use. There are different plans that cover air conditioning, electrical system, powertrain, and more. The best extended car warranties will offer comprehensive coverage for your vehicle and even some bonus perks. There are some factors that could affect the cost of your extended warranty including the level of coverage, the maximum payout, deductibles, and other charges such as insurance adjuster, and recurring fees.

What are the different types of extended warranties?

Extended warranties for vehicles are categorized into five main types.

Powertrain warranty covers the internal parts of the engine and transmission. This is a good option if you have an older vehicle or one that has accumulated a lot of mileage.

A bumper-to-bumper warranty provides the most comprehensive vehicle coverage. These types of plans will cover the cost of repairing major mechanical systems. If there are any exclusions, these should be outlined in the contract.

Named component warranty covers specific car parts that are outlined in the contract. Opposite to a bumper-to-bumper contract, a named component warranty specifies the items that are covered.
The drivetrain warranty covers the parts that make the car move such as the wheels, transmission, axle shafts, and driveshaft. Car engines, however, are usually not included in drivetrain warranty coverage/
Wrap policies allow you to extend your bumper-to-bumper warranty once it expires to cover parts of the car.

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How do you benefit from extended car warranties?

The advantages of getting an extended car warranty outweigh the cost of paying for one.

1. It protects complex vehicle parts that are more likely to get damaged such as smart systems

2. It offers coverage to protect you after the expiration of the manufacturer’s warranty.

3. You can get benefits such as towing service, roadside assistance, and replacement rental coverage.

4. It allows car owners to file a claim for worn out or broken parts that are not usually covered by the manufacturer’s warranty.

5. You get peace of mind knowing that an extended car warranty can back you up during an unexpected vehicle expense.

6. Having an extended car warranty can also help you sell the vehicle since it reflects responsible ownership and that the vehicle was kept in good condition.

These factors help owners get a better resell value.

What items are excluded?

Just like any type of insurance or warranty policy, an extended car warranty will have a list of exclusions. For starters, extended car warranties will not cover damages to the vehicle due to an accident or any damages that were already present before the warranty was signed.

Similar to health insurance, it’s not a good idea to wait for anything to happen before you sign up for one. If you wait too long, you might become ineligible for some plans or you’ll be given higher rates for limited coverage.

What to look for in an extended car warranty?

1. Look for plans that can pay the car mechanic directly instead of a reimbursement where scheme where you pay and file a claim.

2. If someone else other than you drives the car, make sure that they are also covered by the extended warranty.

3. Read closely and understand the exclusions outlined in your contract.

4. Look into customer feedback to see what previous customers experienced.

5. Ask your agent about the flexibility of the plan.

How to avoid extended warranty scams?

Extended car warranties have a bad name due to the swindlers and fraud callers who want to take customers’ money. Make sure you avoid scammers and stay safe while you get access to a trusted provider.

Auto warranty spam call scams are infamous. It’s not just bothersome but they can also use personal details without the customer’s permission. The best move is to ignore these types of callers. Ensure that the warranty provider is trustworthy and reputable by checking their Better Business Bureau profile.

Lastly, if a deal looks too good to be true, then it most likely is.

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Frequently Asked Questions