If your car is nearing the end of its factory warranty, you may be considering a vehicle protection plan to extend your vehicle coverage and keep your peace of mind on the road. But what, exactly, does a vehicle protection plan entail, and is it really worth the financial investment?
In this article, we’ll take an in-depth look at the ins and outs of vehicle protection plans, giving you insight into how they work, how much they cost, what they cover and where to get the best extended car warranty.
When purchasing a vehicle protection plan, it’s always smart to get quotes from multiple companies before deciding on a plan. To start getting free, personalized quotes from our top recommended providers, click below.
What is a Vehicle Protection Plan?
A vehicle protection plan – also called a vehicle service contract, extended car warranty or extended service contract – is one way to protect yourself against having to pay for mechanical vehicle repairs after your factory warranty expires.
There are two main types of vehicle protection plans: powertrain warranties and bumper-to-bumper extended warranties.
- Powertrain warranty: This vehicle protection plan is usually the most basic coverage offered by a provider. It covers only the parts of your vehicle that make it move, including your engine, transmission, drive axles and related parts.
- Bumper-to-bumper warranty: This is the most comprehensive type of vehicle protection plan. It covers almost all components of your vehicle, aside from a few exclusions.
Providers often offer more than just these two options. For example, you might have a vehicle protection plan that covers powertrain components as well as a few additional parts, like your air conditioning, brake system or electrical components.
It’s important to note that vehicle protections typically don’t cover:
- Routine maintenance services like oil changes
- Wear-and-tear parts like filters, brake pads and wiper blades
- Appearance parts including interior upholstery and exterior dents, dings and paint
- Collision damage
- Damage from environmental events like floods, fires and acid rain
Vehicle protection plans also won’t cover pre-existing issues. Usually, you’ll need to wait 30 days and drive 1,000 miles before your coverage kicks in to ensure your vehicle is in proper working condition when you purchase your warranty.
Most reputable extended car warranty companies include a number of added benefits with their vehicle protection plans. These typically include:
- 24/7 roadside assistance: If you’re in need of a service like winching, emergency fuel delivery, battery jump-starts or lockout assistance, it will likely be included with your extended auto warranty coverage.
- Courtesy towing: If your vehicle becomes inoperable, your provider will cover towing to the nearest repair facility.
- Trip interruption coverage: If your vehicle breaks down far from your home and you need to stay overnight while repairs are made, your provider will reimburse your meals and lodging expenses up to a certain amount.
- Rental car reimbursement: If your vehicle is in the shop for a covered repair, your provider will reimburse you for a rental car or other alternate transportation up to a certain amount.
How Does a Vehicle Protection Plan Work?
A vehicle protection plan can be purchased from either a car manufacturer or a third-party provider. It’s important to weigh the pros and cons of extended car warranties offered through either option. This way, you can make an informed decision on which provider is best-suited to fulfill your car warranty coverage needs.
Here are a few key differences between manufacturer-backed plans and those from third-party providers:
|Manufacturer Vehicle Protection Plan||Third-Party Vehicle Protection Plan|
|Repair Facilities||You’ll be required to take your vehicle|
to a dealership for repairs.
|You’ll be able to take your vehicle|
to any authorized repair shop, including dealerships.
|Repair Options||Repairs are guaranteed to be made|
by factory-trained technicians
using genuine replacement parts.
|Repairs can be made by factory-trained techs|
if you take your vehicle to a dealership
for repairs, but there’s no guarantee your provider will cover the full price of genuine replacement parts.
|Time Limits for Purchasing||Typically, coverage must be purchased|
at the time you buy your vehicle
or before your factory warranty ends.
|Contracts can be purchased at any point|
in your vehicle’s lifetime.
|Plan Options||Manufacturers usually have fewer plan options|
to choose from.
|Third-party providers typically offer many plan options so you can cover only what you need.|
|Contract Details||Contracts may be tailored to the unique needs|
of your car brand.
|Contracts are more generalized to the needs|
of all vehicles.
|Term Limits||The longest contract terms typically|
only last up to about 150,000 miles.
|Contract terms are much longer, with top providers offering coverage|
up to 200,000 or 250,000 miles.
|Price||Manufacturer-backed vehicle protection plans are |
typically more expensive and may be subject to dealership markups.
|Third-party plans are typically cheaper|
and are not subject to dealership markups.
|Claims Process||Claims are handled directly through dealership repair facilities.||The claims process may be more involved.|
How Long Does Coverage Last?
A vehicle protection plan can last anywhere from a few months to over 10 years, depending on the provider you choose. Manufacturers typically offer shorter term limits than third-party providers, and the length of coverage you’re eligible may vary depending on the current age and mileage of your vehicle.
To give you more insight into how long coverage lasts, here are the maximum term limits of a few popular manufacturer and third-party vehicle protection plans:
|Type of Vehicle Protection Plan||Company||Maximum Term Limit|
|Manufacturer Vehicle Protection Plan||Toyota||8 years or 125,000 miles|
|Manufacturer Vehicle Protection Plan||Hyundai||10 years or 100,000 miles|
|Manufacturer Vehicle Protection Plan||Ford||8 years or 150,000 miles|
|Third-Party Vehicle Protection Plan||Endurance||8 years or 200,000+ miles|
|Third-Party Vehicle Protection Plan||CARCHEX||10 years or 250,000 miles|
|Third-Party Vehicle Protection Plan||CarShield||200,000 miles|
The term length you choose will affect the overall cost of your vehicle service plan, so make sure you’re aware of what you’re opting into.
How Do Claims Work?
Typically, in the event of a mechanical breakdown, you’ll need to take the following steps:
- Take your vehicle to an authorized repair shop and have the mechanic perform a diagnosis to determine the cause of the issue
- The repair facility will reach out to your warranty provider to confirm your coverage and have repairs authorized.
- After gaining prior authorization, the mechanic will begin repairs.
- Once repairs are completed, you’ll pay your deductible and your provider will cover the rest of the bill. Some providers will have you pay the total cost upfront and send you a reimbursement check, but the best providers will pay the repair shop directly.
How Much Does a Vehicle Protection Plan Cost?
According to our research, the average cost of a vehicle protection plan is between $1,700 and $4,000. This is such a wide range because there are many factors that influence the cost of coverage. These include:
- Deductibles: A higher deductible leads to a lower premium cost, and vice versa.
- Levels of coverage: A comprehensive plan is more expensive than a basic plan.
- Term length: As you’d expect, a longer contract is more costly.
- Vehicle age, make and model: Older, less-reliable cars are often more expensive to protect.
Many providers offer customers the choice to pay upfront for coverage or with monthly payment plans.
Are Auto Protection Plans Worth It?
Auto protection plans are worth it for many drivers. In fact, in a recent survey by Pegasystems Inc., 60% of drivers with vehicle protection plans reported benefitting from their coverage within the past year. However, they’re not a great investment for everyone.
There are a few reasons to consider purchasing a vehicle protection plan, like if you don’t have an especially reliable car, if you don’t have the ability to pay for repair costs outright or if you just want added peace of mind on the road. On the other hand, if you do own a highly reliable car or if you’re able to save on your own for repairs, you probably don’t need a vehicle protection plan.
If you’re on the fence, get free, no-obligation quotes from a few different providers and see whether the cost outweighs what you think you may pay in repair costs over the warranty period. (You can accurately estimate this using a site like RepairPal.) This will help you determine whether a vehicle protection plan would be worth it for your car.
Our Top Recommendations for Vehicle Protection Plans
As mentioned, purchasing a vehicle protection plan from a third-party provider is an excellent choice if your car’s factory warranty has expired or if you want more flexibility in terms of plans, deductible options, term limits and repair facilities.
Our review team has evaluated every major vehicle protection plan company, rating them on factors like coverage options, affordability and overall customer satisfaction. Below, we outline our two top recommended providers.
Endurance: Best Provider
Based on our research, Endurance is a high-performing extended warranty provider across the board. It scored well in all of our review categories, including industry reputation, coverage, affordability, transparency and customer service.
The provider offers six coverage plans, which can extend up to 8 years or 200,000 miles. Endurance has sample contracts online, so prospective customers can see what to expect before even reaching out for a quote.
If you’d like to read more about this provider, read our full Endurance warranty review. Or, get a free, personalized Endurance quote by clicking below.
CARCHEX: Best for High-Mileage Cars
If you’re looking to protect a car with more than a few miles on its odometer, we encourage reaching out to CARCHEX for a quote. The provider has five coverage levels to choose from, and its vehicle protection plans can extend up to 10 years or 250,000 miles.
CARCHEX currently holds an A+ rating from the Better Business Bureau and has a positive industry reputation, partnering with major companies such as CARFAX, Kelley Blue Book and Edmunds.com.
Read all the ins and outs of the provider in our comprehensive CARCHEX review, and click below to get a free quote.
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.