• What is an Extended Warranty? (2022)

A guide to the basics of extended car warranties.

LISTEN 10:47

An extended car warranty is a perplexing subject that often confuses car owners as well as car buyers. So in this article, we try to break down everything there is to know about an extended warranty to help you decide whether you really need one or not.

What is an Extended Warranty?

What is an Extended Warranty? (2022)
- image 1046329

An extended warranty refers to a service contract that covers a range of repairs after the manufacturer’s warranty is over. The coverage of an extended warranty program usually begins after the expiry of the manufacturer’s factory warranty. A typical Extended Warranty program covers repair and replacement costs of electrical and mechanical components, which in some cases include problem areas not covered by the manufacturer.

A warranty can last anywhere from one to eight years and most manufacturers offer in-house extended warranty programs while you purchase your vehicle. Both third-party and manufacturer warranty programs start from as low as $1000 and pre-repair deductibles reach as high as $100.

What is an Extended Warranty? (2022)
- image 1046332

Some of the benefits of an extended warranty program are as follow:

  • Saves you money in the long run especially when you are dealing with premium or less reliable car brands with an expensive after-sales network.
  • Most plans incorporate added benefits like roadside assistance which can prove to be highly beneficial and a lot less expensive in case of a breakdown.
  • It is a proven way to improve a car’s resale value as used car buyers prefer vehicles that are under warranty.

What do extended car warranties cover?

What is an Extended Warranty? (2022)
- image 1046334

An extended warranty provides fairly comprehensive coverage which is similar to the factory warranty offered by a manufacturer but the coverage usually starts after the manufacturer warranty ends, ensuring continued coverage and saving you from massive repair bills. It is not to be confused with auto insurance as it surpasses car insurance in terms of coverage by taking care of damage due to normal use instead of just repairs caused by collisions, vandalism, theft, or acts of nature.

To understand the different elements covered under extended warranties first let’s take a look at the types of coverage generally offered under an extended warranty and the elements that are covered under them.

Powertrain Warranty:

What is an Extended Warranty? (2022)
- image 1046333

A powertrain warranty as the name suggests is a type of limited warranty that provides coverage for curtail components associated with the drive train. This includes the cost of repairing or replacing parts of the powertrain including the engine, drivetrain, and transmission. The powertrain is comprised of essential running gear that also means it is usually the most expensive part of the car.

Similar to other forms of warranty, a powertrain warranty does not encompass parts that are prone to wear and tear or degradation with time. These elements include the battery, clutch, wheel bearings, CV joints, and certain drive belts and fluids.

Bumper to Bumper Warranty

What is an Extended Warranty? (2022)
- image 1047900

A bumper-to-bumper warranty will include a list of exclusions which usually include the list of items that are subject to wear and tear, such as tires, brake pads, and windshield wipers, and routine maintenance like oil changes and tire rotations, though it is recommended to read the terms of the policy as these components and the kind of coverage often differs from provider to provider.

Stated-component coverage

What is an Extended Warranty? (2022)
- image 1047902

This type of warranty is designed for specifically listed vehicle parts and systems. They could be expensive electrical systems such as multi-media or infotainment systems.

As mentioned above, extended warranties do not cover damages caused during an accident hence they are not to be confused with the coverage offered by auto insurance. These are strictly designated for components that break down due to normal use which are not expected to fail normally. These plans do not cover routine maintenance or nonmechanical components which are prone to wear and tear. Some of those components are:

  • Tires
  • Bumpers
  • Brakes
  • Wipers
  • External trim
  • Suspension bushes
  • Shock Absorber

Pros & Cons of an extended warranty

What is an Extended Warranty? (2022)
- image 1047904

Extended warranties are a foolproof way of ensuring continued coverage for your vehicle, for a long time. But it’s not all black and white, and though they can save you from costly repairs down the line an extended warranty isn’t cheap and one always runs the risk of never using it. So here are a few pros and cons that you should consider before dropping your hard-earned money on an expensive extended warranty.


  • Plans available with low average deductibles
  • Comprehensive coverage choices for new as well as older
    and high-mileage vehicles
  • Improves vehicle maintenance in the long run by avoiding cheap fixes
  • Typically offers a prorated refund after 30 to 60 days
  • Additional benefits like roadside assistance are also available in certain cases


  • Doesn’t cover wear and tear or routine services such as oil changes and tune-ups.
  • High monthly payments are required in some cases
  • Can be subject to steep pricing as it’s not regulated by any authority

How much do extended car warranties cost?

What is an Extended Warranty? (2022)
- image 1046335

An extended warranty can prove to be highly beneficial but before buying an extended warranty make sure you evaluate providers based on cost, coverage, and convenience. Also, don’t forget to compare policies and negotiate to get the best possible deal.

Extended warranty plans with basic coverage can start from as low as a couple of hundred dollars and can go well over $1000 depending on the type and level of coverage that you opt for. That’s not all, deductibles are another expense that will accompany an extended warranty and they can cost between $50 and $100 depending on your warranty provider.

Warranty coverage can come in handy if you don’t want to spend money later or choose to purchase a vehicle that costs higher than usual to run and maintain. In cases of affordable and reliable cars, the warranties might not be as useful especially if you walk around with enough savings to cover occasional repair bills. Before buying an extended warranty make sure you evaluate providers based on cost, coverage, and convenience. Also, don’t forget to compare policies and negotiate to get the best possible deal.

Common Auto Repair Costs

The first and foremost things car owners look for when it comes to long-term car ownership is reliability and an extended warranty can provide you the peace of mind. Even if you have factory powertrain coverage, it’s only a matter of time until your warranty expires, leaving you responsible for any repair bills. When you consider the average costs of powertrain parts, that peace of mind alone might be worth it.

Car Make and Model Repair Type Average Cost Without Extended Warranty
Honda CR-V Head Gasket Replacement $1,316–$1,575
Toyota RAV4 Brake Line Replacement $191–$216
Toyota Camry Transmission Replacement $5,200
Ford F-150 Transmission Case Shift Motor Replacement $302–$311
Honda Civic AC Compressor Replacement $1,007–$1,061
Mazda CX-5 Daytime Running LED light failure $1,130
Subaru Outback Windshield Replacement $880
Jeep Wrangler Oil Housing Replacement $710
Honda Accord Starter Replacement $710–$738
Subaru Forester Suspension Coil Replacement $1,060

Average costs are from RepairPal and CarComplaints.com
If you own a reliable car from a trusted brand like Toyota and Honda which offer affordable spares, and just protection for essential components like the engine, then you should consider a basic extended powertrain warranty. If you want full coverage for your vehicle, an extended warranty that includes both bumper-to-bumper and powertrain coverage is your best bet.

What Are The Top Extended Car Warranty Providers?

What is an Extended Warranty? (2022)
- image 1046331

When it comes to third-party warranty providers, we strongly recommend getting in touch with them to try and get the best deal since most of them will offer you a discount over the quoted price if you ask for one. Olive and Endurance are some of the best third-party warranty providers that offer the option of transferring ownership. Here’s a brief review of these providers:


Uproar is based out of Seattle, Washington, but it’s not like any other extended car warranty company out there. Uproar bills itself as an innovator, which makes a lot of sense considering it’s the first extended warranty company to offer a 100-percent digital, subscription-based experience. The main highlights of uproar include an instant quote and signup online, same-day coverage, no long-term commitments, transparency, and no aggressive salespeople or robocalls. They are BBB accredited and have five-star ratings from both Google and Consumer Affairs.


Olive is one of the newest players in the business, apart from extended warranty plans, it also offers mechanical breakdown insurance in California. It has also secured some of the best consumer ratings courtesy of its top-notch service and a wide range of plans that deliver timely resolution of claims.

  • For cars up to 10 years old/ 140k miles
  • 100% online extended warranty solution with customizable plans
  • File claims online 24/7
  • Affordable monthly payments
  • Call for a quote & get a free $5 gift card


They offer Coverage for cars up to 20 years old which makes it ideal for used car owners. They offer hassle-free inspection after which the claim can be filed, making the entire process foolproof and they aim to ensure that you don’t miss minor details which might cause you trouble in the future. They also offer membership benefits which add to the whole customer experience and help them secure the top spot.

  • Coverage for cars up to 20 years old
  • Cut repair costs with full protection for your vehicle
  • Inspection is required before a claim can be filed
  • Extra perks with all-inclusive membership
  • Join & save $300 on a protection plan


They offer coverage for cars with up to 250,000 miles which makes them a great choice for people who plan to purchase a warranty for their heavily used vehicles. They offer a wide range of policies some of which offer industry-leading claim filing processes. With an A+ rating from the Better Business Bureau, CARCHEX should be on your list when shopping for an extended warranty.

  • Covers cars with up to 250k miles
  • First-rate full-coverage protection for new and used vehicles
  • The claim filing process depends on the policy
  • No-haggle, low-price guarantee
  • A+ rating from the Better Business Bureau


Should you buy an extended car warranty on a new or used car?

Yes, an extended warranty on a used car can prove to be highly beneficial and save you from expensive repairs in the long run. You can buy an extended warranty straight from the dealership for a new or a used car as long as your car is under a factory warranty. For cars that have surpassed the factory warranty period, you can always go for a third-party extended warranty.

How Long Is a Vehicle Covered For?

Most factory warranties last anywhere between one and five years depending on the brand. However certain brands like Kia, Hyundai, and even Nissan have offered a 10-year powertrain warranty for some of their vehicles.

Can My Warranty Be Transferred?

Yes, just like any other legal contract, a warranty can be transferred. In the case of manufacturer warranty, however, there shouldn’t be a need to transfer the warranty as it is usually linked with the car’s VIN.

When Should I Purchase an Extended Warranty?

In the case of a factory extended warranty, they require you to purchase it either with the vehicle itself or before the factory warranty ends. But you can always buy a third-party warranty even after the factory warranty on your vehicle expires.

Bhavik Sreenath
Bhavik Sreenath
A keen automotive enthusiast with a love for anything with engines. He loves discovering the world of cars and technology to explore new boundaries in the field of modern-day journalism.  Read full bio
About the author

Related Articles

What Does A Car’s Factory Warranty Usually Cover?

What do you think?
Show Comments
Car Finder: