When budgeting for a new vehicle, it’s smart to plan for repair costs – especially if you’re buying a used car that may be more likely to experience mechanical issues. But are extended warranties on used cars worth it?
This article will review some of the pros and cons of extended car warranties on a used car. If you decide an extended warranty is the right option for you, you can get free quotes from some of the industry’s best extended car warranty companies below.
When are Extended Warranties on Used Cars Worth It?
An extended warranty can save you money on the cost of expensive vehicle repairs after a mechanical breakdown, but extended warranties on used cars are not the best choice for everyone. In some cases, the cost of an extended warranty will not exceed the cost of covered repairs, so you may save in the long run by starting a repair savings account when you purchase your car and paying out of pocket in the event of a breakdown.
In other cases, extended car warranties pay for themselves and then some – especially if you drive an unreliable vehicle or a car that typically incurs higher-than-average repair costs. You can check sites like RepairPal to get an estimate of your vehicle’s reliability ratings and common repair prices.
Additionally, if you’re not able to save money quickly to cover major unexpected breakdowns, extended warranties on used cars can be worth it for the peace of mind that your car repairs will be covered in full even if you’re still paying off your warranty.
The chart below describes some of the most expensive parts replacements that may be covered by an extended warranty. If you’d feel comfortable saving up enough to pay for these replacements on your own, you probably won’t need an extended auto warranty for your used car. But if not, a vehicle protection plan could be a great investment.
|Head gasket replacement||$1,287 to $1,659|
|Transfer case replacement||$2,807 to $2,905|
|Transmission replacement||$5,109 to $5,286|
|Hybrid battery replacement||$6,999 to $7,081|
How Used Car Warranties Work
If you decide to purchase an extended warranty on a used car, you will have many providers and plan options to choose from. Most manufacturers offer extended warranty plans, but third-party providers are often cheaper and offer more flexibility.
Coverage levels for extended warranties on used cars range from basic powertrain warranties that cover only the parts that make the car move – like the engine, transmission and drive axle – to exclusionary bumper-to-bumper extended warranty plans, which cover nearly all mechanical and electrical parts.
If your car needs a covered repair, contact your plan administrator and take your vehicle to a licensed repair facility. Most extended warranty providers pay the repair shop directly, minus your deductible. Typical deductible options are $0, $50, $100 and $200, but may vary by provider.
Be sure to read your contract carefully so that you have a full understanding of what is and is not covered before you sign on the dotted line. All extended warranty contracts have exclusions, and not every component will be covered, even under the most extensive plans.
Cost of Extended Warranties for Used Cars
When considering whether extended warranties on used cars are worth it, remember that the price of an extended warranty depends on a number of factors, including:
- Your vehicle make and model
- Your vehicle age and mileage
- Your location
- The plan you choose
- The deductible you choose
- The coverage term you choose
Used cars are likely to have more miles and are therefore more expensive to cover. Most providers will supply quotes over the phone, and some offer free online quotes as well.
What is a Good Price for an Extended Car Warranty?
Typically, five-year maximum-coverage extended car warranties cost between $1,500 and $3,500. Anything in the $2,000 range or below is considered a very good price, but you may find that you prefer to pay a little more for more comprehensive coverage.
We determined these figures by collecting quotes for the same vehicles from over a dozen extended warranty companies. Because each company offers different coverage levels and terms, it’s hard to compare prices – but not impossible.
We looked at the cost of each provider’s exclusionary plan and divided the total price by the number of years of coverage to determine which companies provide the best value. On average, a top-tier extended warranty costs between $300 and $700 per year of coverage – or about $1,500 to $3,500 for a five-year contract.
How to Find the Best Used Car Extended Warranty
So, how do you know whether extended warranties on used cars are worth it when shopping providers? The best used car warranty companies will combine comprehensive coverage with low costs and superior customer service.
Drivers looking for extended warranties on used cars typically have two options: a manufacturer extended warranty or a third-party vehicle service contract. Most manufacturer extended warranties can only be purchased before your factory warranty expires. If you purchase a used vehicle no longer covered by its original factory warranty, you’ll need to turn to a third-party provider for your extended warranty needs.
Price is an important factor in choosing an extended warranty, but it should not be your only consideration. Make sure you choose a reputable extended car warranty company with a known claims-servicing record, and remember that if a quote seems too good to be true, it probably is.
Who Has the Best Extended Warranty for Used Cars?
Our review team examined every major extended auto warranty provider in the industry, taking a look at plan options, costs, customer reviews and more. Based on this, we found that Endurance, CARCHEX, CarShield, Protect My Car, and autopom! offer the best used car extended vehicle service contracts on the market. Read more about our top two choices below.
Top Recommendations for Extended Warranties on Used Cars
When shopping for a used car extended warranty, it’s smart to get quotes from more than one provider so you can compare options to find the plan and price that best suits your needs. Two of our top recommended providers are Endurance and Protect My Car.
Endurance: Best Provider
Endurance offers one of the most comprehensive coverage and benefits packages on the market. There are six levels of Endurance coverage, which range from a basic powertrain plan to an exclusionary, bumper-to-bumper warranty. There’s even a plan specially designed for high-mileage vehicles.
Every Endurance contract comes with one free year of Endurance Elite Membership. The Endurance Elite program provides customers with 24/7 roadside assistance, identity theft services, key fob replacements, access to a personal concierge service, a $250 entertainment voucher and more.
Endurance’s top-level coverage, called the Supreme plan, is sold at a fair price. We asked Endurance to supply a Supreme quote for a 2018 Honda Civic with 30,000 miles and were offered the following terms:
- Term Length: 6 years/71,000 miles
- Financing: $74.60 for 36 months
- Down Payment: $161.35
- Deductible: $100.00
- Total Cost: $2,846.95
- Cost Per Year of Coverage: $474.49
However, your used car extended warranty may cost more or less, depending on your vehicle. Learn more about the provider in our complete Endurance warranty review, and get a free quote below to see how much you would pay for your vehicle.
Protect My Car: Best Long-Term Financing
Protect My Car offers superior coverage and excellent financing options. There are three levels of coverage sold by Protect My Car:
- Supreme: For newer vehicles with low mileage, this comprehensive plan covers most vehicle components, except for a short list of non-covered parts.
- Select: For cars with more than 50,000 miles, this plan covers everything in the lower-tier Driveline plan, plus the suspension and braking systems.
- Driveline: For vehicles that are between four and ten years old with up to 150,000 miles, this plan covers many components, including the engine, transmission, drive axle, cooling system, air conditioning and timing chain.
Each Protect My Car contract also comes with roadside assistance, rental car reimbursement and trip interruption coverage.
Protect My Car offers competitive rates with long-term financing options. We asked Protect My Car for a quote on its Supreme plan for a 2018 Honda Civic with 30,000 miles and were offered the following terms:
- Term Length: 4 years/unlimited miles
- Financing: $58.00 for 48 months
- Down Payment: $50.00
- Deductible: $100.00
- Total Cost: $2,834.00
- Price Per Year of Coverage: $708.50
To get your own personalized quote from Protect My Car, click below.
The Detroit Bureau collects data from every major car warranty provider to formulate rankings of the best warranty companies. Our in-depth rating system takes into account coverage, pricing, transparency, customer satisfaction and ratings from industry experts. Each provider is given a weighted score in five categories, as well as an overall score out of 10.0.
We recommend auto warranty companies based on these rankings, but we also encourage you to perform your own research and compare quotes to find the best coverage.