How much does an extended car warranty cost?

An extended car warranty may assist with repair bills if your car breaks down. Each extended warranty company has its own rules about how much you'll pay per repair for a deductible, where you can have repairs completed and which systems and parts are covered.

While an extended car warranty may be helpful, buying one may not be the right choice for everyone. It's smart to research this type of warranty to decide if purchasing one is a good fit for you and your car.

Average cost of an extended car warranty

You can expect to pay about $2,500 total for a typical extended warranty on a vehicle. However, these warranties often last for multiple years, and you typically have the option to pay upfront or make monthly or annual payments. Your payment term often won’t be the same as your coverage term, either.

So, a $2,500 warranty might cover your car for seven years, but your payments could end up being roughly $70 per month for just the first three years. Expect to pay between $350 and $1,000 per year during your payment term.

When researching the costs of extended warranties, expect to see a wide range of prices. You may pay more for coverage if you choose to make monthly payments instead of paying upfront in one lump sum, too.

Here are some factors to watch for as you evaluate pricing for extended auto warranties:

• Deductibles: Warranty companies require the vehicle owner to pay a deductible, typically around $100, each time you take your car in for repairs. Make sure you understand how much you'll pay out of pocket to access the help you need fixing your car.
• Maximum payout amount: Check the maximum payout included with the warranty. Consider the cost of the policy in relation to the maximum payout.
• Mileage requirements: If your car is considered a high-mileage vehicle (with more than 100,000 miles on the odometer), you may pay more for an extended warranty. If you plan to drive your car for a few more years, though, an extended warranty may work well for you.
• Length of time you can use the warranty: Many warranties cover a certain number of miles or years (whichever comes first), so make sure you plan to keep your vehicle for the lifetime of the warranty or that it’s transferable to a new owner.

Extended warranty prices vary greatly from one company to the next, as does the amount of coverage you may receive. Ultimately, the amount of money you pay for an extended warranty on your car depends on a number of factors that vary widely from one driver to the next.

What affects the price of an extended auto warranty?

Since the costs of extended car warranties are highly variable, it's important to understand the factors extended warranty companies use to create pricing structures.

Level of coverage

Extended warranties don't cover normal wear and tear that occurs over time, so you're limited to claims for repairs due to parts failure. Keep in mind that many parts have a separate stand-alone warranty, so if you had a new alternator put in before you bought the warranty and it failed, the manufacturer or the shop that installed the part may replace it at no charge.

A warranty typically won't cover things that are part of routine maintenance or require regular replacement, like tires, brake pads, windshield wipers and bulbs. Read the warranty's limits and exclusions and familiarize yourself with repairs that would be covered if you decide to buy the warranty.

Make and model of your vehicle

Some cars are more expensive to fix than others. So it makes sense that a car warranty for a 2018 Ford F-150 Raptor with a cash value of $52,000 would cost more than the same coverage for a 2018 Kia Rio with a cash value of $15,000.

Performance cars are typically more expensive to cover and may not be eligible for a warranty with some companies.

Extended auto warranty deductibles typically range from $75 to $250.

Service fee or deductible

When you need to have your car fixed and your extended warranty covers the repair, you often have to pay a deductible. Deductibles typically range from $75 to $250. In general, if you have a low- or no-deductible plan, you'll pay more for the extended warranty than if you choose a plan with a higher deductible.

The car's age

Your car's model year affects whether you can get an extended warranty on it and how much the warranty costs. Older cars may be more expensive to cover, but a more recent model with a reputation for breaking down may trigger a higher warranty cost than an older car with a reputation for reliability.

Scope of coverage

Basic plans with smaller lists of covered repairs, such as powertrain or drivetrain plans, cost less in general than more comprehensive exclusionary plans (also known as bumper-to-bumper warranties). If you want a warranty that covers hybrid drivetrain electronics or other specialty inclusions, expect to pay more than you would for a simpler plan.

Length of warranty

When you purchase an extended warranty with a longer term, you'll pay more for the additional coverage. Think about how long you plan to drive the car and the average number of miles you drive each year before you agree to pay for a warranty that lasts years (or miles) into the future.

What to consider when shopping for an extended car warranty

When shopping for an extended warranty for your car, look through the policy coverage documents carefully to make sure the parts and systems you're most concerned about are covered. If you’re worried about having transmission problems, a policy that excludes transmission repairs isn't a good choice — even if it is cheaper.

Many extended auto warranty companies have restrictions on where your vehicle can be repaired.

Find out whether the extended warranty company has restrictions about where you can have repairs done. If you have a mechanic you trust but can't use for repairs because they aren't on the warranty company's list of approved shops, you may want to keep looking.

It's also important to understand the process of filing a claim, getting repairs done and taking advantage of coverage. Some warranty companies require you to pay for repairs and submit a claim for reimbursement.

Be aware that you may have to appeal a company’s decision if it denies your claims — looking at customer reviews can be a good way to see if a company has a reputation for denying claims.

Other companies offer plans that pay the shop directly (minus the deductible), which prevents you from having to come up with the cash upfront and waiting for approval. Be sure to ask if you need to have the problem diagnosed and get the warranty company's approval before proceeding with repairs.

If you have to make several trips to the shop before you can get a repair approved, the inconvenience may outweigh the potential benefits of the warranty.

Additional benefits of an extended auto warranty

Some extended warranties come with additional benefits like 24/7 roadside assistance, rental car reimbursement (if you need to rent a car while yours is in the shop for a covered repair) and trip interruption reimbursement (if your car breaks down while you are on vacation).

These benefits provide added value, but they shouldn't be the main reason you buy a warranty, however — many credit cards have similar perks. You may also be able to get some of these benefits through your auto insurance company.

Bottom line

Expect to pay about $2,500 total for an extended car warranty, but don't be surprised if quotes from warranty companies come back higher if you drive a performance vehicle or want many different parts and systems included in the warranty.

Many drivers decide to forgo this type of coverage in favor of regularly setting aside money to pay for future repairs. If you think an extended warranty is a good fit for your situation, research your options carefully.