Compare Pros and Cons of Extended Car Warranties
An Expert Comparison of Car Warranties
Extended warranties provide coverage in the event of a part failure or breakdown that occurs after the factory warranty has expired. Extended warranties are not for everyone, but they’re invaluable to some.
Extended warranties can be purchased through the factory at the time of the initial purchase or later through a third party. They usually span two to five years, and some plans have mileage limits.
Types of Extended Car Warranties
Generally, there are three coverage levels available:
- Powertrain plans are the least expensive, covering only the parts that generate power.
- Mid-priced plans cover the powertrain plus some additional parts and components.
- Bumper-to-bumper plans are the most expensive, covering most parts and components.
How Much Does an Extended Car Warranties Cost?
Extended warranties usually start at about $1,000 for a two-year plan and range up to about $3,000 for a five-year plan. The total price depends on the level of coverage you select, the age and condition of the car, and your deductible.
Deductibles usually range from $50 to $250.
Extended Car Warranties Pros
- Eliminates the expense of major repairs - With an extended warranty, you’ll never have to worry about paying for major repairs. This is especially important if you’re on a tight budget and struggle with unexpected expenses.
- Provides peace of mind - Some people simply feel more comfortable knowing that they’re covered in the event of a breakdown, even if the breakdown never happens. There’s value in being worry-free.
Extended Car Warranties Cons
- Inflated prices - Some dealerships or third-party companies inflate extended warranty prices beyond what is fair. Keep in mind that the prices are always negotiable. You don’t have to buy directly from the dealer, either. Shop around until you find the right price.
- Coverage exclusions - Almost all extended warranties, including bumper-to-bumper plans, exclude certain parts or components. Be sure to read the fine print before signing so you know exactly what is covered.