What exactly is an extended car warranty?

An extended warranty, also known as a car service contract, is an extra plan that you may purchase to assist you to pay the full cost of some services that the car could require as it is still under your ownership. It normally starts when the manufacturer’s warranty runs out, however, the two might sometimes extend.

An extended warranty is a type of insurance that ensures that things like automobiles and electrical goods will be fixed or replaced if they break down. A manufacturer’s or retailer’s warranty, which normally lasts one or two years and covers mechanical or electrical failure during that time, is usually included with products. On top of the manufacturer’s or retailer’s warranty, you may purchase an extended warranty. While your original manufacturer’s or retailer’s guarantee is still valid, an extended warranty will provide you with additional protection against things like accidental breakage. 

What is the procedure for purchasing an extended warranty?

At the time of purchase, your shop will almost always offer you an extended warranty. Extended warranties can also be purchased straight from insurance providers or through a price comparison website. Following an examination by the OFT, this website was developed to allow customers to shop around and make educated decisions. Check with your bank to verify what your policy covers if you already have extended warranty coverage through your bank account insurance. You can then select whether you require additional coverage.

What are the costs of extended auto warranties?

When you purchase a new car, you’ll almost certainly be asked whether you want to add on an extended warranty. However, in the same way, that dealerships mark up the cost of extended warranties to generate a profit, they do the same with finance. Whether you’re intent on getting one, talk to the dealer about lowering the price or look for some independent suppliers. Levels of coverage vary greatly, as does the cost, which is determined by the plan’s coverage and the make and model of your vehicle. The warranty might cost anything from $1,000 to $3,000 or more upfront. You’ll also pay interest and maybe charges n the warranty if you roll it into your vehicle loan. You could also have to pay a deductible. Deductibles are normally assessed on a pre-repair or per-warranty-service-visit basis. It’s critical to understand how your plan’s deductibles operate since if a problem can’t be corrected in a single trip to the repair shop, you might end up paying numerous deductibles for a single service.

Should you buy a new or used car with an extended warranty?

Whenever you purchase a new automobile, usually you don’t need to purchase an extended warranty immediately since the manufacturer guarantee which is usually included in the purchase price protects many maintenances for the first few years. However, if you purchase some used automobile from a dealership, the company’s warranty may not apply. Look for the Buyer’s Guide on the car window to find out. This should state whether the vehicle is covered by a warranty. If that’s the case, you could have to pay a charge to get it switched to you. You may get an extended warranty for a price if you’re buying a car that’s no longer protected by the manufacturer’s warranty or if you want more coverage after it expires.

What is the duration of the company warranty?

company warranties differ extensively, but many provide bumper-to-bumper coverage for three years or 36,000 miles, whichever comes first. Warranties on powertrains can run up to 60 months or 60,000 kilometres.

Is it worthwhile to invest in extended automobile warranties?

It’s tempting to buy an extended warranty plan to shield yourself from unwanted costly repairs. So when you do, think about the advantages and disadvantages.

Advantages of an Extended Warranty

The most significant advantage of an extended warranty is that it can save you money when your vehicle requires an expensive repair that is covered by your contract. Instead of paying the full price out of pocket, you’d just be obligated for the deductible and the remainder would be covered by the warranty provider, as long as the problem is covered by the service contract.

If you’re worried about how you’ll pay for a repair, an extended warranty might help you sleep better.

The disadvantages of an extended warranty

There are certain downsides to consider before deciding if the expense is worth it.


A large percentage of customers who buy an extended auto warranty never utilize it. And, when they do, the cost of the repair is frequently less than the guarantee.


 If the extended warranty’s coverage term crosses with the manufacturer’s warranty, users may be charged for a warranty that you already have for free. And, in the case of a new automobile, the extended warranty will most likely not kick in until the manufacturer’s warranty has expired. Extended warranties don’t always cover everything that may go wrong with your automobile. Read the small print to find out what it covers and what it doesn’t, so you’re not caught off guard by a repair fee you believed was covered by the warranty

Service restrictions 

You may be limited to having your automobile repaired at specific repair shops.

Depreciation limitations 

Depending on the car’s mileage, certain extended warranties may only cover a fraction of the cost of repairing or replacing items that need to be replaced.


Most extended warranties require repairs to be paid for by either the dealer, the manufacturer, or an independent third party. You may be stuck with a warranty you can’t utilize if the corporation responsible for paying the fees goes out of business.