Best Extended Car Warranty: Top Providers Reviewed for 2025

skynesher / Getty Images/iStockphoto

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

Extended car warranties can help you save money if your older car needs emergency repairs. Nearly half, or about 47%, of Americans have an extended car warranty, including 54% of 16- to 24-year-old car owners, according to ConsumerAffairs.com.

Here’s what you should know about extended car warranties and where you can find the best options.

What Is an Extended Car Warranty?

An extended warranty covers the some or all of the cost of your vehicle repairs. Depending on the coverage type, it might help pay for engine and transmission repairs or replacements, drive axle components, and even electric or hybrid vehicle batteries.

What Are Manufacturer’s Warranties?

Manufacturer’s warranties often cover these components, as well, but they don’t usually apply to older cars. Most new vehicles come with manufacturer warranties that provide bumper-to-bumper and powertrain coverage.

If anything fails on your vehicle due to a factory defect, the car company will pay to have it repaired or replaced at an authorized service center or the dealership. Manufacturer warranties only last for three years or 36,000 miles, whichever comes first.

Extended Warranty vs. Manufacturer’s Warranty: What’s the Difference?

An extended warranty provides peace of mind that repairs due to factory defects will be covered after your manufacturer’s warranty expires. You can purchase an extended warranty from the dealership that sold you the car or from a third party warranty company.

Common types of extended warranties include:

• Bumper-to-bumper: Covers virtually everything on the vehicle
• Powertrain: Covers the engine, transmission, fuel pumps and other components that power the car
• Drivetrain: Sometimes included in a powertrain warranty and sometimes sold separately, a drivetrain warranty covers the drivetrain and related components
• Emissions: Emissions warranties cover the catalytic convert, electronic emissions control unit and onboard emissions diagnostic computer
• Corrosion: Covers rust and holes not caused by environmental elements, such as driving your car on the beach and failing to wash the salt water off

Are Extended Car Warranties Worth It?

A warranty essentially helps you budget for surprise repairs by spacing out the warranty costs monthly. Although 47% of car owners have an extended warranty, only 10% report using it, according to ConsumerAffairs.com. However, for higher mileage or older vehicles, the peace of mind that comes with knowing you won’t have to pay the full cost of repairs out of pocket is worth it.

How Much Does an Extended Warranty Cost?

Generally, an extended warranty costs between $2,000 and $5,000 over the span of the warranty, according to ConsumerAffairs.com.

Vehicle repairs can range from $164 for an alignment to more than $1,200 for a fuel injector, based on ConsumerAffairs.com research. An engine replacement can cost between $2,500 and $15,000, according to CarBrain.com. A warranty might pay off if you have an older vehicle, an unreliable vehicle, or a pricey sports car or luxury vehicle, where parts cost more.

Keep in mind an extended warranty doesn’t cover damage due to accidents, negligence or normal wear-and-tear.

The Benefits of Having an Extended Car Warranty

A warranty, similar to an insurance policy, is something you purchase in the hopes of never having to use it. If your car does needs repairs, and the cost to fix the vehicle is higher than what you’ve paid for the warranty over time, you come out ahead.

If you can accrue emergency savings for car repairs, this could be a smarter option that will also provide peace of mind. Plus, if you decide the vehicle isn’t worth repairing, you can put that money into a down payment for a new car, instead and then start rebuilding your emergency fund.

Should You Buy an Extended Warranty on a Used Car?

Today’s cars are designed to last 200,000 miles without a catastrophic breakdown, according to Progressive. However, the odds of components breaking before that time increases as the vehicle ages. An extended warranty can help you avoid the need to put car repairs on a high-interest credit card or, worse, skip repairs because you can’t afford to pay for them.

What Does Certified Pre-Owned Warranty Mean?

When you purchase a used car, it might come with a certified pre-owned warranty, which covers many of the same things a comprehensive extended warranty would cover.

The CPO warranty is factored into the vehicle price and often comes with extras like roadside assistance and a loaner car while your vehicle is being repaired. However, they might require that you get the vehicle serviced at a dealership, not your choice of mechanic.

Most CPO warranties only last for one year or 12,000 miles. After that, you’d need to purchase a third-party warranty if you want to extend your coverage.

What Is a Dealership Warranty?

Some dealers may sell warranties on used cars that aren’t certified, as an alternative to a third-party extended warranty. Like CPO warranties, they often require that you have the vehicle repaired at the dealership.

Dealer extended warranties may cost more than those from third-parties, according to Endurance, a top-rated extended warranty company. They might also have shorter terms, limited coverage and additional fees. If the extended warranty cost is rolled into your auto loan, you’ll also pay interest on the warranty.

Unlike a third-party extended warranties, most dealer warranties aren’t transferable if you sell the vehicle before the warranty has expired.

Best Auto Warranty Companies Compared

What To Look For in an Extended Warranty

When you’re shopping around for an extended warranty, you want to compare more than just the cost of the warranty. Take a look at these tips:

• Read the contract fully to determine what is and isn’t covered.
• Know the deductible — do different types of repairs have different deductibles?
• Research the claims process and read reviews.
• Find out how long the claim filing process takes, how many claims are denied and how easy the general process is.
• See if you can choose your own repair shop or know where you can bring in your vehicle.
• Ask if you can transfer the vehicle to another driver if you sell.
• Find out if there are cancellation fees or penalties.
• Learn about other benefits, such as rental car coverage, roadside assistance or trip interruption coverage.

When you compare warranties, make sure you are factoring in these features to compare apples to apples.

Pros and Cons of Extended Warranties

Pros:

• Reduces out-of-pocket repair costs
• Can increase resale value
• Helpful for owners of older or less reliable cars

Cons:

• May cost more than it saves
• Restrictions and fine print
• Possible claim denials

Final Thoughts

If the thought of an emergency auto repair you can’t afford keeps you up at night, it might be smart to consider an extended warranty. If you have a car with less-than-average reliability ratings or a luxury vehicle that’s expensive to fix, an extended warranty may pay for itself over the long haul.

Choose an extended warranty based on your budget, driving habits and the features you want. These might include such as transferability, coverage inclusions and exclusions and deductibles.

Take your time choosing a warranty company, because it’s a big, long-term investment. You don’t want to regret your decision down the road.

Share This Article: