Best Extended Car Warranties in Texas

How do extended car warranties work?

Extended auto warranties, also known as vehicle service contracts, pay for certain car repairs after the manufacturer’s warranty ends. They help cover unexpected repair costs but usually have limits on what's included.

Types of car warranties

Stated-component and exclusionary are the two main categories. With either, the car warranty covers only parts that fail entirely on their own during normal, everyday driving.

• Stated-component warranties cover only the parts listed in the contract. For example, a drivetrain warranty specifically covers your car's transmission, drive axle, drive shaft, differential and transfer case. A powertrain warranty would typically cover all of those parts, plus your engine.
• Exclusionary warranties cover all parts except the ones listed in the contract. Bumper-to-bumper is a type of exclusionary coverage. It covers everything except specific components listed in the contract.

Car warranty vs. car insurance

An extended car warranty helps pay for replacements or repairs when parts fail, but it does not cover damage caused by accidents or misuse — that’s what car insurance is for.

» GUIDE: Everything to know about car warranties

Extended car warranty costs

A comprehensive bumper-to-bumper extended warranty costs between $1,400 and $4,000 for each year of coverage. On the high end, Felipe in Devine said his policy cost around $7,000 in total.

Some plans require a lump-sum payment. Others let you pay it off over several months. Buying a warranty through a car dealership usually means you have to pay interest on the plan, which ends up being less of a good deal.

Are extended car warranties worth it?

In many cases, an extended car warranty is worth it if your car is unreliable or older and you plan to keep it for several more years after the manufacturer’s warranty has expired. Plans tend to cost more in Texas than in other states, since car owners tend to drive long distances, and the extreme heat can have an impact on your vehicle.

Financially, if the plan saves you money and it’s easy to make a claim, then it’s worth it. For instance, Tommy in Dallas has already used his warranty twice. “I think the price of the warranty plan was great and easily worth it because it covered both my repairs,” he told us.

Peace of mind and long-term savings are the biggest benefits of a car warranty.

Still, for some car owners, it’s worth it for the peace of mind. Another policyholder, Robert in Houston, said, “I was pleased with my experience because that was a $775 repair of which I only paid $100 on. And I paid $2,800 for the policy. So, I'm going to keep a running total to see whether it was worth it or not.”

On the other hand, you might not need to make a claim at all. In the worst-case scenario, you pay for a plan only to have your claim denied. For instance, Dwayne in North Richland Hills had a bad experience with a sales rep who overpromised and underdelivered. His advice to others: “Don't be fooled by the sales team.”

That’s why it’s so important to understand your contract, read reviews and ask the right questions before making a final decision.

How to choose a car warranty in Texas

The best car warranty companies have a few things in common: comprehensive coverage, good reputations and easy claims processes. Here’s what to look for when choosing a car warranty in Texas.

• Coverage details: Make sure you understand exactly what is covered and what is not. Transferability and cancellation policies are also important for resale and lifestyle changes.
• Provider reputation: Before you start comparing quotes, find a few companies that have a long history of satisfied customers. Pay attention to patterns of complaints in customer reviews.
• Claims process: Some providers approve claims in as little as 24 hours, while others take a week or more. You should also ask if you can use any mechanic or if you are restricted to a pre-approved network.