If you’re wondering whether car extended warranties are worth it or not, the answer depends on the condition and value of your car. The cost of the extended warranty can also help you determine if it’s worth the investment. You may consider an extended warranty if your factory warranty is coming to an end and you want to avoid paying for expensive repairs that your car may need over time. Read on to learn more about these warranties and whether they might be worth it for you.
Is a Car Extended Warranty Worth It?
Whether buying a car extended warranty is worth it or not for you, namely whether it makes financial sense, depends on many factors. For one, it’s important to consider the current value and repair costs of your vehicle. Consider how reliable your car is and how likely it is to need repairs in the near future. Depending on the year and condition of the vehicle, the cost of repairs may be lower than what you’ll pay for an extended warranty.
Buying an extended warranty may also give you peace of mind. An extended warranty can limit the financial risk of owning a vehicle. Some people may prefer to make this purchase now knowing that they’re covered if their vehicle requires expensive engine or transmission repairs in the future.
You may decide that an extended warranty isn’t for you if you have a dependable vehicle and enough funds in the bank to cover repairs. Additionally, if your vehicle is still covered under the manufacturer’s warranty, then you don’t yet need an extended warranty.
If you do buy an extended warranty, you could end up saving thousands depending on the type of repairs your vehicle needs. Some repairs, like an engine rebuild, can cost up to $7,050. Other tasks, like replacing transmission fluid, are typically more affordable, ranging between $230 and $475. However, even smaller repair costs can add up if your vehicle requires a lot of them.
What Is an Extended Warranty?
An extended warranty is a type of coverage that you can buy after your factory warranty runs out. When you buy a new car, the manufacturer may offer a warranty included with the price of the car. This warranty covers bumper to bumper, which includes engine or transmission repairs. A manufacturer warranty may also cover defective products or workmanship.
A typical manufacturer warranty only covers a vehicle for a certain time period or number of miles. Once the warranty ends, the manufacturer no longer covers the vehicle. Some people may decide to buy an extended warranty for an additional cost, while others may consider purchasing an insurance policy that covers unexpected damages or defective car parts.
What Types of Extended Warranties Are Available?
The specific type of warranty that you have determines what it covers. The following types of warranties are available:
- Bumper-to-bumper warranty: A bumper-to-bumper warranty covers most mechanical parts from one end of the vehicle to the other end. This includes aspects like the fuel and steering systems.
- Powertrain warranty: A powertrain warranty covers the mechanical components of your vehicle, including the engine and transmission.
- Drivetrain warranty: A drivetrain warranty is a powertrain warranty without the engine coverage. It covers the transmission, drive shaft, axles, and wheels.
Other types of warranties may also be available, like a corrosion warranty, which helps pay for damage from rust. Some dealerships may also offer an adjustment warranty, which is shorter and covers the cost of repairs in the first few weeks or months after buying a vehicle.
Extended warranties are commonly sold with used car purchases. You don’t need an extended warranty with a new car purchase because it’s likely already covered under the factory or manufacturer warranty. However, you might decide to buy an extended warranty after the manufacturer warranty expires on your new car purchase. You can buy an extended warranty from the manufacturer, the dealership, or a third-party provider.
How Much Does an Extended Warranty Cost?
The average cost of an extended warranty is $1,500. Depending on your warranty, you may also be subject to a deductible. This is a price that you pay to access your benefits.
The actual cost of your extended warranty will vary depending on the vehicle’s value and current condition. Vehicles that are more expensive to repair or replace, or ones with a lot of mileage, are likely to cost more for an extended warranty. The level of coverage you choose also affects how much you can expect to pay for an extended warranty.
What Does an Extended Warranty Cover?
Before investing in an extended warranty, it’s important to know what it does and doesn’t cover. An extended warranty may cover the car’s engine, suspension system, electrical components, and air conditioning. Some extended warranties may also cover technological components in the car, like the audio or navigation systems.
An extended warranty doesn’t cover normal wear and tear or routine maintenance. It also doesn’t cover repairs necessary due to a lack of maintenance. Typical things not included in an extended warranty are brake pads, tires, and oil changes. Extended warranties also typically only cover manufacturer parts. This means that if you make any mechanical changes to your vehicle, it may not be included in the warranty.
Tips for Buying an Extended Warranty
If you do decide that an extended warranty is right for you, follow these tips to help you choose the right one:
- Compare warranty providers. Not all extended warranty providers are the same. Compare each one, including the cost and what’s included with each warranty, to help you choose the best one.
- Inquire about dealership warranties. Sometimes, an extended warranty is available at the dealership where you purchased your car.
- Keep up with routine maintenance. Failing to keep up with routine maintenance can void your warranty.
- Ask about manufacturer warranties. Before investing in an extended warranty, find out if your new car purchase includes any existing warranties.
Comparing extended warranty providers can help you choose one within your budget that also fits your needs. Extended warranties can be a good investment, as long as you know what you’re getting.
Car extended warranties may be worth it for some drivers and a waste of money to others. Keeping up with routine maintenance is one of the best ways to protect your investment and avoid costly repairs. Check out the FIXD scanner and app to track your repair needs.

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.