If the original warranty on your car or truck has expired, you’ll want to look at your options so you can sleep more soundly at night. After all, while everybody hopes their vehicle will be as trustworthy as possible, a 2019 reliability study done by Consumer Reports does make interesting reading. In a summary by Forbes, the Asian companies Lexus, Toyota, and Mazda are at the top of the list, while some of the heavyweight US brands like Dodge, Jeep, Chevrolet, Chrysler, and GMC are all toward the bottom.
Given this news, it’s a good idea to look at coverage options, but how much do extended car warranties cost?
What Factors Influence the Cost of an Extended Car Warranty?
To begin with, it’s important to know exactly what an extended warranty is. Many people mistakenly think it is some kind of insurance policy and are unsure of what it covers.
While you might think an extended warranty would be simply an extension of a warranty that is issued by an original equipment manufacturer, most of the time you would actually be wrong! Most products in this market are actually vehicle service contracts that are provided by either third-party organizations like Protect My Car or as a service to existing customers from a manufacturer.
Extended Car Warranty Versus Original
It’s important to remember that an original factory warranty, which typically includes powertrain and bumper-to-bumper coverage, is only intended to cover defects in the original parts. For example, if a driveshaft were to fail because of a mechanical defect when this coverage was still active, this would be covered by the manufacturer's original warranty.
Extended warranties, on the other hand, will typically cover a lot more in terms of regular wear and tear and routine maintenance. These policies recognize that most car owners will encounter problems as their vehicles age and accumulate more mileage, and these vehicle service contracts provide a layer of protection. It is important to remember, however, that extended warranties do vary from provider to provider, so you also need to check what is covered when considering all the options.
How to Price Extended Warranty Options
Providers take several different factors into account when calculating the cost of each extended warranty. For example, they will consider the make and model of the vehicle and its history. They will want to know how reliable the car or truck has been and whether it is prone to a particular type of defect or failure. They will also consider the type and size of the engine and the drivetrain configuration, or whether it is fitted with four-wheel-drive or another special feature.
As they determine their element of risk, providers will also factor in the extent of the coverage and how long they will be liable for any repairs or replacement. If there is a stated deductible, this will make a difference to the annual cost potential and will be factored into the cost equation. Finally, providers will consider whether to implement a time and/or mileage limitation and whether this should affect the cost of the service.
Do Extended Warranties Cost More for Certain Vehicles?
The cost of an extended warranty will change between different manufacturers and individual models. It is very difficult to compare like-for-like, as the protection offered by individual companies will vary considerably. There will be certain exclusions or inclusions, mileage and time limits will rarely match up, and there will be plenty of small print to consider.
How Much Should a Warranty Cost?
When an extended warranty is offered by the original equipment manufacturer, it will often be provided through the dealer network, and these individual agents may have the discretion to offer their own price or discount structure. Consequently, the consumer could get 20 different price quotes from dealers in their city or state, and they could all be different.
Dodge Extended Warranty Cost
As an example of manufacturer-derived extended warranties, a Dodge product may cost as much as $3,295 for seven years of coverage, with a $100 deductible, based on a 2016 Chrysler 200 that has 36,000 miles on the clock. That can be a hefty chunk of money to find, and while some manufacturers will offer this as a bundle when you buy the vehicle, consider the long-term indications of this. If you buy on some form of finance, then you will be paying interest on that extended warranty product for the length of the loan, so you should certainly take this into account.
Ford Extended Warranty Cost
Ford has a product called PremiumCARE. As an example, for a 2016 Edge with 60,000 miles on the clock, a dealer may quote $3,095 for 48,000 miles of coverage or 60 months, whichever comes first. This will be subject to a $100 deductible.
Car Warranty Comparisons
Third-party companies like Protect My Car can provide coverage, and their quote process is a lot easier. For example, with Protect My Car, all you have to do is go to the website, fill in a small amount of information related to your vehicle, and request a quote. This company has several different product options, and coverage is usually more extensive than that provided by the vehicle manufacturer as an extension. It may also be a great deal cheaper, as the average cost of an extended warranty from Protect My Car is just $79 per month, with some policyholders paying less. Remember, this is for a full bumper-to-bumper coverage as well.
How Does a Third-Party Warranty’s Cost Compare to a Factory Warranty?
Most people will first become aware of a manufacturer-derived extended warranty when they are sitting at the dealer showroom and getting ready to acquire their car. They may be offered this product and told they can roll it into their final purchase price.
Coverage will vary from manufacturer to manufacturer with some, such as Acura, offering a true extension of the original bumper-to-bumper warranty for a certain number of years or up to a maximum mileage, whichever comes first. It’s very important for the consumer to think carefully before purchasing a product like this, however, and to compare both the coverage and the cost to a third-party provider, such as Protect My Car.
Many extended warranties provided by the factory have strict eligibility requirements. The consumer may be required to take the vehicle in to specific dealer facilities for repairs, and they may find that coverage is limited to certain components, with a long list of exclusions. The details are usually set in stone, so the buyer will need to accept the offer “as is,” with no (or few) options available.
On the other hand, extended warranties offered by companies like Protect My Car will typically come with a variety of coverage options and will also have additional benefits like rental car coverage and roadside assistance. The owner may be able to choose a policy that offers maintenance elements as well, such as tire rotations or free oil changes and partner rewards that can be traded in at retailers nearby.
Certain customers may even be able to get a special discount based if they're disabled or a military veteran. This, by itself, can make a significant difference to the cost of a policy from a third-party provider.
Making Car Warranty Comparisons
You'll need to be some careful calculations before choosing a dealer warranty. For example, it's important to consider whether the cost of the policy can be split into monthly payments or not, as otherwise, you may need to pay a lump sum upfront, which might not fit into your budget. Remember, if an extended warranty is purchased for a lump sum when the vehicle is new, this may then be subject to interest payment.
There are other factors to consider as well. Some people rack up a great deal of mileage each year due to a long daily commute. In this case, they may not be able to get coverage under a factory extended warranty, as most policies automatically expire when the vehicle’s odometer hits a certain threshold. For example, the Chevy extended limited warranty product provides coverage for five years or 60,000 miles, whichever comes first.
Just to show you the difference between the major manufacturers when it comes to the extended warranty products, let’s compare the key points.
• Bumper-to-bumper coverage — three years or 36,000 miles.
• Powertrain coverage — five years or 60,000 miles.
• Towing to the nearest dodge (or Chrysler, Jeep, Ram) dealership only.
• Bumper-to-bumper/powertrain coverage — five years or 60,000 miles.
• No additional perks.
• Includes engine, transmission, steering, brakes, suspension, electrical, etc. — eight years or 150,000 miles (Premium Care plan).
• Very strict eligibility requirements regarding age and mileage.
• Personalization plans are possible.
• Bumper-to-bumper (gold) coverage — up to 8 years or 125,000 miles.
• Powertrain coverage — up to six years or 100,000 miles.
• Extra perks like rental car or roadside assistance.
• Long list of exclusions.
As you can see, these major companies all differ in terms of their coverage options and support, so it is important to look at each product, analyze the small print, and make an informed decision.
Comprehensive Car Warranty
Third-party providers often specialize in this area, however. For example, Protect My Car’s Driveline policy provides coverage for vehicles that are up to 10 years of age with more than 80,000 miles on the clock. In this case, the company will offer a full five years and/or 125,000 miles of coverage to protect against unexpected mechanical failures.
What Repair Costs Can an Extended Warranty Cover?
Extended warranties are often classified as “exclusionary” or “inclusionary.” In the first case, this means that any item from a (sometimes) long list will be excluded from coverage, but these policies do tend to be more comprehensive. Warranties that are subject to inclusionary terms, however, will itemize exactly what is covered, and anything outside of that list will be down to the owner to cover.
Third-party companies may take a less restrictive approach. For example, Protect My Car offers coverage under their Supreme policy for:
• Transfer case.
• Drive axle.
• Differential assembly.
• Front and rear suspension.
• Cooling system.
• Air conditioning and heating.
• Select brake system components.
• Timing chain.
The company will also provide roadside assistance and rental car reimbursement.
Items that are considered to be subject to routine wear and tear won’t be covered. This includes things like air and fuel filters, belts, brake drums, pads, rotors and shoes, fluids, hoses, light bulbs, lubricants, manual clutch assemblies, spark plugs, and wiper blades.
Is an Extended Warranty Worth the Cost?
Vehicle repair costs can be dismal and may easily wipe out a consumer’s rainy-day budget. Just consider some of the average costs (in 2017) involved in repairing these key components, as reported by Protect My Car.
• Transmission repair — $2,707.
• Front and rear suspension repair — $2,930.
• Turbocharger or supercharger repair — $2,930.
• Electrical repair — $1,125.
• Engine repair — $3,250.
While most modern-day cars are built to be reliable (as the car manufacturers need to maintain their reputation in the marketplace), parts will wear out, and breakdowns will occur. Unfortunately, the vehicle owner may get no warning of an impending failure, and as the vehicle gets older, this risk can only increase.
Warranty Value Calculator
Each individual vehicle owner needs to address the scale of the risk and work out whether they can afford to shoulder it or whether they need protection. If they can maintain a rainy-day budget to cover all eventualities and can resist the temptation to dip into that pot for any other reason, then they may be able to sleep more soundly at night. If not, however, then it makes sense to get an extended warranty that meets all their needs and can provide them with coverage as the vehicle gets longer in the tooth.
Reputable Extended Car Warranty Companies
In most cases, products such as those offered by Protect My Car are more flexible and may offer coverage for virtually any vehicle, no matter the mileage or age. As an example, the Ambassador product will cover vehicles with up to 300,000 miles on the odometer, and the warranty can be tailored to meet the specific needs of the owner.
When you choose the Ambassador plan, for example, you'll get 25 to 50% off of all your repairs. You'll also get free oil changes and tire rotations, guaranteed 24/7 roadside assistance, and lock-out services. While you're paying money upfront, the money you'll save on all of these features will more than make up for the investment.
With so much uncertainty and the risk of an unexpected, hefty repair bill, it makes sense to get an extended car warranty. However, it is also important to do your due diligence before you chose, but make sure that you look at the products offered by Protect My Car as you are shopping. For many drivers, products from Protect My Car surpass the extra coverage offered by the dealer and are far more affordable.