Extended warranty companies can range from honest, fair providers, to call center flim-flammers whose only goal is to separate you from your hard earned money. There are many excellent reasons to purchase an extended warranty, but identifying the reputable companies from the bad apples can be a difficult task.
We found that the manufacturers' extended warranty contracts tend to be among the best. Based on our extensive research of third-party contract providers, we recommend CARCHEX or Endurance.
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CARCHEX is one of the largest, most highly-rated providers of vehicle extended warranties in the market. They have been a trusted name in the business for 20 years.
autopom! is well known in the industry for customer service and responsiveness. The company works directly with 2600 certified repair facilities and has a dedicated customer advocacy program.
Endurance Extended Car Warranty company is one of the most popular and trusted providers in the business. Endurance coverage is accepted at any dealership and at any ASE-certified mechanic, and features a 30-day money back guarantee.
If your car doesn’t fall into one of the brand-specific service contract companies, check out CARCHEX. They offer service plans for all brands, both new and used. They also have an A+ rating from the Better Business Bureau, meaning that they respond to whatever complaints they get, and they’re probably not hounding you on the phone late at night.
CARCHEX is a service contract broker, so within every tier of their coverage, they have several offerings from third party vendors that can meet your needs. For example, at the highest level, (Titanium Coverage) CARCHEX offers plans from six agencies that run from seven to 10 years worth of coverage.
That’s very important to understand. CARCHEX does NOT administer these plans. They only sell them. Several of the vendors in this list are going to be the same, but others are direct providers, meaning that they administer what they sell. All things being equal, we’d choose a direct provider over anything else. The not-so-hot part of the coverage is that the plan is a reimbursement. Remember the health plan you had years ago that paid for nothing until you paid for it first, then you had to go through a labyrinthine procedure of filing claims with receipts and that whole deal? That’s kind of what’s happening here. It’s not the most convenient thing in the world, and you’re still going to have to pay for the repairs up front. To us, that really defeats the purpose of having an extended warranty in the first place. The whole idea is to AVOID paying for costly repairs, not to pay for them and hope some other company is going to cover them at a later date.
You’ve also got a paradox of choice going on with CARCHEX. They have 21 different plans ranging from Titanium, Platinum, Gold, Silver, and Bronze, and then down at the bottom somewhere Brass, Tin, Wax Paper, and Doublemint Gum Wrapper (we’re kidding about the last ones.) This makes it REALLY, REALLY DIFFICULT to figure out what one plan offers versus one of the other CARCHEX plans. Again, all things being equal, we’d choose a vendor with, oh, maybe SIX plans that are easy to understand. The number of plans alone makes it feel like you’re missing something, and you probably are.
In addition to the service contract coverage, the plans also provide some added benefits, such as:
CARCHEX Pros and Cons
For more in-depth information, read our full CARCHEX review »
autopom! (the exclamation point is part of the name, don’t blame us for terrible marketing) stands for “automotive peace of mind,” and claims to be protection from expensive auto repairs.
What’s important to note right up front is that autopom! is one of those extended warranty brokers, meaning that they don’t actually provide the services that you’re paying them for. Every one of its plans is administered by another company. The question you have to ask yourself is “Why would I pay money to this company, when the services are being rendered by yet another company?”
It’s a good question. You can look at any one of autopom!’s plans, figure out who administers it, and buy it directly through them, which cuts out the middleman. For example, if you look at the plans detailed, several are administered by Mercury. Why not just go directly to Mercury Insurance yourself and buy that plan there?
The answer is one part convenience and one part cost. Because autopom! is a very large client of the plans it acts as a broker for, it can offer you a plan for about the same cost that the plan’s creator will sell it to you directly for. This is similar to shopping for other consumer products. The manufacturer of an item may sell directly, but they try hard not to undercut the large retailers they work with as partners. Have you ever compared the prices of a smartphone from your cell service provider to the price of the same model from the manufacturer? The convenience part comes from these specialist brokers’ ability to quickly know which contract provider will offer which contract for your situation at the best price.
autopom! appears to have a fairly decent reputation on Yelp, as well as a strong profile on BBB with a 4.5 out of 5 rating with 40 reviews there.
It’s important to note that none of the plans autopom! offers are available in every state, and several of the plans are only available in California.
Depending on which contract you purchase, there are some side benefits to the warranty as well:
autopom! Pros and Cons
For more in-depth information, read our full autopom! review »
Endurance is the provider you’re likely to hear the most about because they spend a gazillion dollars marketing everywhere. If you’ve ever searched “extended warranty” in Google, these people have been following you around like they used to threaten you about your “permanent record” in junior high. Kidding aside, the Better Business Bureau posts a warning on its website about Endurance. However, the company’s practices seem to be improving. BBB has monitored mailers recently being circulated by Endurance Warranty Services, LLC and the most recent mailers appear to meet the BBB Code of Advertising.
Although Endurance isn’t accredited by the BBB, they have a solid 4.4-star rating with TrustPilot.
Unlike CARCHEX, Endurance is a direct provider, meaning that they not only sell the plan, but they also administer it, too. That’s a benefit that we can’t stress enough. In the business world, it’s known as “one throat to choke” when things go wrong. The same company that sold you the plan is the one that’s administering it, so a problem is less likely to turn into a circular firing squad.
Unlike some of the other providers, there aren’t 839 confusing plans to figure out. They have four levels of coverage: Select Premiere, Secure, Superior, and Supreme. The difference in those plans is how much the plan is going to cover. Secure, for example, appears to only cover what a Powertrain warranty would. As you step up the ladder, you get coverage on other ancillary services. Supreme appears to be a fairly comprehensive, bumper-to-bumper-style service contract.
If you're not exactly sure which level of coverage is right for you and how it may impact pricing, Endurance does a great job of making themselves available to answer questions. They can be reached at (855) 534-1173, or they have a chat function on the website that’s actually responsive and helpful.
Again, with a program like this, you’re going to pay for the repair up front and get reimbursed for the repair when you’ve submitted receipts, which, frankly, kind of stinks. If you’re going to have to have money available to pay for repairs, you might as well just put money in a savings account and not pay for an extended warranty, right?
One of the positives is that you can get your car serviced at any ASE-certified shop, which means you’re a lot closer to getting your car fixed if you’re in the middle of nowhere with a breakdown. That’s not an unwarranted concern. For example, if you are away on a ski vacation in the Great White North, towing the car all the way to a dealer is going to be a problem.
Other benefits to the program include:
Endurance Pros and Cons
For more in-depth information, read our full Endurance review »
Car Talk has spent the last two years diving deeply into the warranties industry for the benefit of our readership and long-time listeners. Our process for deciding on the best warranty companies is exceptionally thorough, involving in-depth research and our unique secret shopper initiative. We compiled over 700 data points across all reviewed companies to refine and inform our selection process. Car Talk reviewed the following important criteria for each company:
Everybody -- including us now -- is using “car warranty” incorrectly. The only car warranty that exists is the warranty your car came with when it was new. Everything else -- Literally everything else -- is a prepaid service plan. It’s not an “extended warranty,” no matter what these companies, or people like us who have to live by the vagaries of Google search optimization would like to call it.
With all that out of the way, what is a prepaid service plan? It’s a service contract, where you pay a monthly fee to avoid having to pay a huge bill if something really bad happens to your car when your original new car warranty runs out of time or mileage. Prepaid service plans will vary all over the place in terms of both time and mileage. Thinking of keeping your car to 120,000 miles? There are service plans out there that will cover you. Figure you’ll trade this car in at no more than 80,000 miles? You can find a service plan that will cover the gap between there and the end of your original warranty.
How these plans differ is the rules under which they’ll pay for a repair. Say your transmission falls out at 92,000 miles: Some of these plans are only affiliated with franchised new car dealerships, so you’ll have to have it towed to a dealer. Some plans will let you use any ASE-certified mechanic for a repair, so you can use the guy you like who happens to work out of a gas station in your town.
The plan that makes you use a dealership might seem like it’s at a disadvantage, but consider this: Those plans also require the repair to be performed by factory authorized technicians, using only OEM replacement parts. The plan that allows you to use your gas station guy might force him to select the cheapest replacement parts available, which you’ll be replacing again in a much shorter period of time.
That’s why reading the contract and understanding the advantages and disadvantages is so critical.
Extended car warranties are coverage policies that help cover the cost of repairs on your vehicle, after your factory warranty has expired. These policies consist of a monthly fee that is designed to give you peace of mind for the future health of your car. The idea is, should something fail on your car, the policy will then kick in and the cost of the repair will be covered, if that certain repair is covered in your contract.
A good car warranty is one that clearly explains what it’s going to cover and not cover long before you need to use it. At this point, we’ve read about 93,397 complaints about car warranty companies in our research on this topic. The complaints about “bad” car warranty companies come in two categories: The first is “They won’t stop calling me.” The second is “I thought my timing belt was covered but it wasn’t.” Frankly, if you didn’t know what was covered in the warranty, you should never have signed the contract. That’s on you.
In general, we’d choose a warranty provider using factory trained technicians and OEM parts before we chose anything else. If you’re within the strict mileage and year of manufacture caps on some of these service plans, they offer a much better product, with repairs that are going to last longer than those using aftermarket parts.
The other thing a good car warranty provides is additional services when you’re out of town. About the worst thing that can happen is a major automotive failure when you’re on the road with your family, loaded with a week’s worth of luggage, on your way to a vacation. You want an extended warranty that is going to get you on the road as fast and as cheaply as humanly possible with things like towing assistance, rental car coverage and even lodging if you need to stay overnight before you hit the road again in the morning.
First, stop reading and go back to the top of the section above this one and read it again: What’s covered in a warranty is only what’s detailed in the contract. Read the contract. Then read it again.
You also need to understand that there are two main types of warranties offered in the industry. Exclusionary policies and inclusionary policies. It may appear that they offer similar coverage, but they do so in dramatically different ways. This is why it is of vital importance that you read your contract thoroughly. An exclusionary policy lists the items that are NOT COVERED under the policy. Anything not listed under the list of exclusions is covered under that policy. An inclusionary policy, sometimes referred to as listed-item coverage, works the exact opposite way. These policies provide a detailed listing of what is covered. If something is not listed specifically in the policy, it is not covered under that plan.
In general, most warranty providers are going to offer several levels of service, and what’s covered in those levels of service varies wildly from plan to plan. A basic extended warranty will typically cover engine and transmission components, drivetrain components, transmission, cooling, steering, drive axel, brakes, AC, suspension, possibly hybrid and EV components.
At the risk of being repetitive: READ THE CONTRACT. It will detail exactly what’s not included in the plan. Also, remember the very significant difference between exclusionary and inclusionary policies. Exclusionary policies list what is NOT COVERED, while inclusionary policies list what IS COVERED. So, one more time, with feeling… Read your contract.
In general, there are categories of things that an extended warranty is never going to cover:
Ah, that’s the eternal question and we’re providing a slippery answer: It depends.
There are simply too many factors to nail down exactly what a service contract or extended warranty is going to cost. In the table, we’ve provided some sample costs from research we’ve done, but we can’t cover every single car, every single plan and all the variables that impact cost, like the length or mileage of the contract, or the mileage on the car. The cost to you depends entirely on a bunch of unique factors, like the age of your car, the make and model, the mileage, the reliability of it, and the actuarial tables used by the warranty providers to determine the probability of the life of your vehicle.
The greatest cost advantage you’ll realize is if you’re buying a service contract at the time you purchased a new car. In general, the company providing the service contract is going to be more likely to cut you a deal on a service contract if your original warranty is still in effect. They’re also more likely to be less expensive if you’re attempting to buy a service contract for a one-owner, low mileage vehicle than something that’s had more owners than your local newspaper.
If we looked at an average cost for a warranty, you’re looking at around $1,400. The thing to consider, though, is based on surveys from consumer groups, the average savings for repairs paid for with a service contract only amounts to about $900. In other words, if you end up getting more repairs paid for than you paid in service contract fees, you’re kind of a rarity.
One of the few providers of extended warranties who doesn’t hide their pricing like it’s the formula for Coca-Cola is Subaru. You can view what Subaru charges here. We suspect these prices are similar to what you’ll end up paying if you find a quality extended warranty product for a similar vehicle.
You’re going to read all kinds of nonsense elsewhere that will tell you that a warranty should cost around $1,500. If you can find a warranty that covers anything but a Toyota Corolla with zero miles for any more than two years and 24,000 miles, buy it. Most warranties are going to be WAY more expensive.
The staff and research team at Car Talk has now spoken with a good amount of players in the warranty industry. It appears that the average price across all categories, all make/models, all car types is roughly $3000. Again, this figure will depend on all the factors listed in the section above. Reliable cars will cost less, unreliable cars will cost more. Expect to pay significantly more if you are driving a luxury car, like an Infiniti or an Acura. Each provider has a number of plans, and payment options available, including monthly installments which make things easier on the consumer.
We took a look at what a bunch of random internet dopes told us they were quoted for a range of warranties, and whether or not they came with a deductible. There was ONE that was $2,000. All the rest were significantly more expensive. Warranties for cars like the BMW X5 are breathtakingly expensive, especially if you’re trying to buy one for a used car.
| Vehicle* | Term* | Total Cost | Deductible** |
|---|
As with everything, it depends. If you’re driving something with an exceptional reputation for reliability, you probably shouldn’t spend the money. However, if you’re driving something dodgy, you should’ve bought that service contract already. What are you waiting for? Your electrical system has already consumed itself.
The best thing to do is spend some time researching your car’s (or your intended car’s) repair history. There are services like RepairPal and CarComplaints that can give you a good idea of the potential trouble issues. You also want to research the cost of specific repairs. Your car might be generally reliable but prone to failures of the Engine Control Unit, which might be particularly expensive for your model. You’d want to know that before you make a decision on whether to purchase a warranty or not.
We found a Dear Car Talk letter with Tom and Ray that we think does a great job summarizing how you should decide whether an extended warranty is worth the extra cash. Here it is:
Dear Tom and Ray:
We just picked up a new Fiat 500C, and we were pondering the lifetime warranty. Before the car hits 10,000 miles, we have to decide whether to buy it. The cost is around $3,000. Is something like this worth it? We would like to keep the car for 10-15 years. Cheers!
Karl
RAY: Generally speaking, extended warranties are not worth it. Why? Because if insurance companies didn't take in more money from premiums -- overall -- than they spent on repairs, they would stop selling the things.
TOM: But that doesn't mean it's not worth it to you. Maybe you're buying a car with unknown long-term reliability? Hint: You are.
RAY: Or maybe you're someone who sleeps better knowing for certain that you'll never get a call from the service manager telling you that the estimate for your new engine is $6,400.
TOM: But there are two variables to consider. The most important is the fine print.
RAY: What does this "lifetime warranty" actually cover? Is it a complete extension of the factory warranty? Is it just the powertrain? Does it cover body hardware and electrical issues? What, specifically, is excluded? "Wear items," like brakes and shocks?
TOM: What's the deductible? Are there conditions you have to meet to keep the warranty in force? For instance, do you have to get your car serviced regularly at the dealership? Do you have to keep written records of all of your services and oil changes?
RAY: If you don't feel capable of doing a "close read" of the warranty's fine print by yourself, then it's worth paying an independent mechanic you trust to read it and go over it with you. You want to know what is and isn't covered. Your mechanic also can talk to you about how often he sees the kinds of repairs that are covered, and how often he sees those that aren't.
TOM: Once you know what kind of warranty you're actually buying, then you can try to guess the likelihood that you'll spend $3,000 on those kinds of repairs in the years that you own your car.
RAY: Also keep in mind that the price of the warranty is negotiable. Like most "parts," an extended warranty is bought by the dealer at one price, and sold to you at a higher price -- sometimes double. So you often can negotiate a lower price.
TOM: But don't do anything until you understand what the warranty actually covers. It may be a great warranty, with a low deductible and very few exclusions or requirements. And it may help you sleep well for the next 15 years.
RAY: Or it may have more holes in it than my brother's favorite underwear. And you may decide you're better off buying a second Fiat 500C and just driving whichever one is working on a given day. Good luck, Karl.
The biggest thing to consider when you think about buying an extended warranty is how much you could possibly cover if your car suffered a significant failure. According to the internet, half of Americans have less than $5,000 in liquid cash. A third of us have less than $1,000. As you can see in the “Cost of Service of a Modern Vehicle” section below. You can see that a thousand bucks doesn’t provide a lot of service if you really need it. But that’s not the only consideration when thinking about a service contract like this. You should ask yourself the following questions:
There are more questions to answer in our “Should I Get an Extended Warranty” infographic.
