Most people have been on the receiving end of a scam phone call regarding an extended car warranty. But what you may not realize is that many reputable companies really do offer extended warranty coverage on vehicles, and it may be worth considering. Exploring the car warranty companies that provide this option, as well as the pros and cons of purchasing a third-party extended warranty, can help you decide how to move forward.
What Is an Extended Car Warranty?
An extended car warranty is a service contract that protects the owner of a vehicle. Buying a new or pre-owned car is a significant expense, and having a major issue with your new (or new-to-you) vehicle could be financially devastating if you’re on the hook for the repair or replacement cost. Most car warranties offered by third parties apply to vehicles that are outside of any manufacturer warranty coverage periods. Nearly every new car includes at least a few years of protection against manufacturer defects, but after that warranty expires, the owner assumes responsibility for any repairs needed.
If you choose to obtain an extended car warranty, it’s important to understand the requirements of the contract. The policyholder is usually responsible for keeping up with the vehicle’s required maintenance, including oil and filter changes, tire rotations, manufactured recommended services, and system checks. Failing to maintain the vehicle properly may void your extended warranty. Some car warranty companies also require vehicle owners to use authorized service centers and genuine parts for all repairs.
What To Look for in Car Warranty Companies
Many automotive manufacturers offer extended warranty coverage on their lines, but you don’t have to go through the manufacturer of your ride to get additional protection. Third-party companies also provide car warranties for nearly all makes and models. When comparing car warranty companies, it’s helpful to consider the following aspects of how they operate:
A reputable car warranty company will offer transparency in the way it does business. You should be able to view a sample contract and ask any questions you might have before agreeing to the terms. The last thing you want to worry about is having a claim denied for a reason that you weren’t aware of when you signed the contract. The ability to read through a contract allows you to become better equipped, and you’ll get a sense of what the agreement covers. You should also feel comfortable asking questions and getting clear, helpful answers.
Finding a warranty service provider can be a challenge, but using the coverage shouldn’t be difficult. Make sure you choose a warranty company that provides access to benefits and resources. In today’s tech-forward world, reputable companies offer access to benefits and claims submission through a mobile app or website. You should also have access to emergency benefits, such as rental car reimbursement and roadside assistance.
Something else to consider when considering a car warranty company is how it makes reimbursements. Some companies issue reimbursements to policyholders, but this can take longer and require the auto owner to pay out of pocket to get their car fixed. If your ride requires extensive repairs, you could be looking at hundreds or thousands of dollars that you’ll have to pay and wait to receive reimbursement. If you’re concerned about that, make sure to select a warranty provider that can pay its preferred repair shops directly.
Reviews and ratings can tell a lot about a company and its treatment of customers. People who have had both positive and negative experiences are often willing to share through online review platforms, such as the Better Business Bureau and Google Reviews. It’s smart to look at multiple review sites when deciding which car warranty company to use. The information shared by users can help you get a sense of the level of service and treatment you’ll receive if you become a customer. Items to look for in reviews include helpful customer support representatives and a quick claims resolution process.
Looking at a company’s reputation in the industry can give you an idea of how they operate. The Better Business Bureau issues grades to companies based on the ability to handle and settle customer complaints. A high rating on the BBB website indicates that a company has a strong industry reputation and effective communication processes. You can also look at AM Best, a site that rates the financial ability of a company to manage risk and pay out on claims.
You may also look at prominent partnerships between car warranty companies and leading businesses in the industry. Major companies will typically do the research needed to make sure that their partnership with a warranty service provider will benefit their customers.
Most of the best car warranty companies have been around for more than a few years. Choosing a newer company can come with some risk, as you may not know what to expect. A newer car warranty company may also struggle financially, dealing with difficulty in paying claims or even filing bankruptcy. It’s best to look for companies that have long-standing histories in the industry.
Nearly all car warranty companies impose mileage limits on the vehicles covered. If your car has more than 100,000 miles, it’s important to look at whether it will qualify for coverage through the provider you’re considering using. Some companies will go up to 250,000 miles, while others max out coverage when a vehicle reaches 100,000 or 150,000 miles.
Car Warranty Companies to Consider
Some of the highest-rated car warranty companies to consider for your service contract include:
- Endurance (Available in all states except California)
- Protect My Car (Available in all states except Alaska, California, Hawaii, Missouri, Oklahoma, and Washington)
- CarShield: (Available in all states except California)
- Carchex: (Available in all states)
When you invest in a new or pre-owned vehicle, it’s worth considering an extended warranty. You may pay up to a few thousand dollars for the coverage, but if something major goes wrong, you’ll end up saving a lot in repair costs.
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.