Best Extended Auto Warranty Companies

What do extended auto warranties cover?

Before spending money on an extended auto warranty or vehicle service contract (VSC), it’s important to know what will be covered. Many consumers believe all extended warranties cover their vehicle bumper-to-bumper, but every policy has limitations. You can opt for a full-coverage plan or choose a plan that only covers the major systems on your vehicle. Here's a list of the most common things extended auto warranties will cover:

• New and used cars: Extended auto warranties can be purchased for both new and used cars. A used car is more likely to need major repairs, and an extended warranty usually pays for itself with the first major repair. Maintenance plans can help a used car owner keep their vehicle on the road longer. New car owners are likely to be more focused on protecting their investments and taking care of small repairs as they happen. A ding or a dent can be a major issue to a new car owner who may initially be interested in premium auto protection plans. Maintenance plans may also be beneficial in helping new car owners meet the maintenance requirements of their manufacturer’s warranty.
• Major and minor vehicle parts: Standard auto protection plans usually cover common repair services for major and minor vehicle parts. If your air conditioner breaks down or you have an engine or transmission failure, your vehicle service contract will probably cover it. Brakes, cooling systems and electronic components are just a few examples of services that might not be covered. Be sure to read the fine print and choose a plan with the coverage you actually need.
• Additional benefits of coverage: Some providers–like Endurance and Protect My Car–offer additional benefits like 24/7 roadside assistance and reimbursement for a rental car if you need one while your car is in the shop. Some providers cover anything from flat-tire changes and locksmith services to jump-starts and towing. A few car warranty providers even reimburse incidental costs, like hotel lodgings, if you have to wait for repairs.

How long is the extended car warranty effective?

Length of service is another consideration when dealing with auto warranties. Some cover the entire vehicle, while others have limitations on certain parts and components. Vehicle service contracts that cover everything will be more costly.

• Mileage exclusions: Many auto protection warranties cover a vehicle for a length of time or for a certain number of miles, whichever is reached first. For example, a warranty might last for five years or 75,000 miles.
• Waiting period: Often, vehicle service contracts purchased separately from the manufacturer's warranty cannot be used for 30 days or 1,000 miles, whichever comes later, after they are purchased. This policy prevents people from buying a vehicle service contract only after a problem develops.

How are auto warranty claims handled?

Like health insurance, an extended auto warranty provider will often have a network of mechanics and repair shops that car owners can use. Any repairs outside the network may not be covered or may only be covered up to a specific dollar amount. The FTC offers advice on their website for consumers who need to file a claim with their service contract provider. They recommend asking if you need prior authorization for any repair work or towing services before choosing an auto repair shop.

Most extended auto warranties cover repairs only through authorized service providers. Be sure to look at the available network of garages before settling on a specific warranty company. Preferably the repairs are done at the dealership or by an ASE (Automotive Service Excellence) Certified technician.

Not all mechanics are created equal. If there’s a problem following a repair, find out how the warranty handles service issues and complaints. An ASE Certified technician can perform work on your vehicle but cannot perform TSB’s (Technical Service Bulletins) or Factory Recalls; this work should be done at the dealership.

Depending on the terms of your service contract, you may have to pay for repairs then wait for reimbursement from the service company. If you aren't sure how long it will take to be reimbursed for your expenses, talk to your extended warranty provider.

What are the terms of a vehicle service contract?

Some factory and extended warranties take care of repairs, but only if all their terms are met. Part of the warranty agreement is the understanding that the vehicle owner will perform routine maintenance recommended by the vehicle manufacturer. Many extended auto warranty providers require you to follow the manufacturer's recommendations for routine maintenance on your vehicle. Failing to do so could void your contract. Keep track of all maintenance records and receipts, and be sure to ask your provider if there are any rules against performing maintenance work yourself.

Typical maintenance responsibilities required by most vehicle service contracts include:

• Oil changes: While a single delayed oil change is unlikely to void a warranty, repeated misses could leave a car owner facing a full bill on a major system repair.
• Changing filters: Bad filters can cause build-up that impacts the engine, intake systems, transmission and more. It is important to change filters regularly.
• System checks and service schedule: Regular testing and visual inspections can catch problems before they become major hazards. They are typically included in the recommended maintenance schedule.
• Using recommended gasoline types: Every vehicle requires a certain octane rating to help the engine get its best life and performance. Using the wrong or lower octane rating than is specified can cause possible engine damage and a voided warranty. Make sure to use the proper octane rating every time.

Are extended auto warranties worth it?

If you purchase a vehicle and plan on keeping your car after the manufacturer's warranty has expired, purchasing an extended auto warranty could be worth it. In some cases, purchasing an extended auto warranty before the manufacturer’s warranty expires could come with added benefits too. For example, if any part of your vehicle is repaired under the manufacturer’s warranty (and the repair is also covered by your extended warranty), some providers will reimburse you for a portion of the manufacturer’s deductible.

The peace of mind that comes with additional coverage of an extended warranty could be enough to make it worth it for you. Here's a list of other things to consider along the way:

• Service contract coverage: Extended auto warranties cover a wide range of vehicle parts and systems, but every auto protection policy–and provider–are different. Think about the amount of money you've spent on out-of-warranty repairs on similar vehicles you've owned in the past, then compare that to the total price of an extended warranty. If you're worried you won't have cash set aside to pay for repairs out of pocket, an extended warranty could help offset those costs.
• Service contract limitations: Some extended warranties have maximums for the amount they will spend on a type of repair. Others have a large deductible. Even plans with special coverage, like rental car benefits, come with stipulations. Be sure to read your service contract thoroughly to avoid any surprise costs.
• Service contract exclusions: Extended auto warranties do not cover pre-existing conditions. Certain states also have additional exclusions that could affect your coverage.