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Do You Need an Extended Car Warranty?

Jason Metz

An extended car warranty lengthens a factory new-car warranty or covers a used car. Extended car warranties are sold by car manufacturers and third-party companies. Here’s what you need to know.

How long does an extended car warranty last?

The length of an extended car warranty depends on who sold it. For example, you may be able to buy a seven-year, 100,000-mile warranty (whichever comes first). The specific mechanical problems covered also depend on the company that sold the extended car warranty.

What does an extended car warranty cover?

You may hear the terms “powertrain” and “bumper to bumper.” A powertrain warranty typically covers items like a car’s engine and transmission for mechanical problems. A bumper-to-bumper warranty covers other items like a car’s computer, electrical systems, air conditioning and heating.

Some extended car warranties offer tiered plans that might have names like “premium,” “premier” or “plus” and bundle extra perks like roadside assistance, car rental coverage and trip interruption insurance, which helps cover the cost of meals or lodging if a mechanical problem leaves you stranded.

What’s not covered by an extended car warranty?

An extended car warranty typically doesn’t cover:

  • Intentional damage.
  • Routine maintenance such as oil changes and tire rotations.
  • Damage from misuse or improper maintenance, like not getting routine oil changes.
  • Normal wear and tear, like worn tires.
  • Damage caused by a car accident.

Can you negotiate an extended car warranty?

Car dealerships often mark up the cost of an extended car warranty so you may have room to negotiate the price. You can typically include the cost of the warranty in an auto loan. If you’re thinking of buying an extended car warranty, it’s a good idea to get quotes from companies that sell car warranties before you go to a dealership to buy a car.

Is it good to buy an extended car warranty?

Here are some things to think about:

  • How long do you plan to keep the car? If you bought a new car and typically get a new car every three years, you most likely won’t need an extended warranty.
  • Can you choose the repair shop? Some car warranties restrict where you can have your car repaired.
  • How long are you covered? Read the fine print to determine when the time and miles begin for coverage. Some extended warranties begin when the factory warranty expires, but some begin when you take ownership, meaning you might have some overlap between two warranties.
  • How much does an extended car warranty cost? The price of an extended car warranty depends on the length of the warranty and the company. You’ll also have a deductible if you make a claim under a warranty. You may be better off keeping money aside for repairs rather than paying for a warranty.

What’s the difference between an extended car warranty and car insurance?

An extended car warranty helps cover the cost of repair for mechanical problems. Car insurance covers theft and damage from car accidents, fire, floods, vandalism and more.

Do I have options other than an extended car warranty?

If you don’t want to purchase an extended car warranty, you have other options, such as:

  • Mechanical breakdown insurance, which is like an extended car warranty, but sold through your auto insurance company.
  • Roadside assistance, which typically doesn’t cover the cost of repairs for mechanical problems, but it can help pay for a tow or jumpstart if your car breaks down.
  • AAA membership, which offers services like roadside assistance, rental car discounts and trip continuation reimbursement.