Is labor covered under warranty?

Labor coverage varies by warranty provider and plan

Simplify your search

Compare plans tailored to your car & budget.

    +1 more
    Author picture
    Edited by: Joseph Santos

    Simplify your search

    Compare plans tailored to your car & budget.

      Endurance Auto Warranty, Omega Auto Care, Concord Auto Protect, Toco Warranty and American Dream Auto Protect
      gloved hand on the hood of a car

      You’re driving to work, and suddenly, you hear your exhaust rattling. You take it to the mechanic, only to learn that a critical part needs to be replaced. Luckily, the part is cheap, but your next question is likely, “How much is the labor going to cost?”

      Labor costs can make up a big portion of any car repair bill. Your warranty may cover them, but it helps to understand how it handles these expenses. When exactly would they cover labor? And how much should you expect to shell out if you must pay for it yourself?

      Let’s find out.


      Key insights

      Labor warranty coverage depends on your warranty and its specific terms.

      Jump to insight

      Factory warranties and extended warranties can cover labor costs for eligible repairs.

      Jump to insight

      If you don’t have warranty coverage, you’ll need to pay for labor costs out of pocket, which averages around $100 to $131 per hour in the U.S.

      Jump to insight

      Labor warranty coverage

      When it comes to warranty coverage for labor, the type of warranty you have makes a difference. Factory warranties, which come with new cars, cover labor costs for repairs related to defects in materials or workmanship for a period of time after purchase. In other words, if a covered part in your powertrain fails due to a manufacturing issue, the warranty will pay for the labor to fix it.

      But factory warranties don’t cover labor for repairs needed due to normal wear and tear, accidents or neglect. You'd be responsible for paying the labor costs yourself in these cases. (An extended warranty or insurance may also be an option if you need more coverage.)

      » LEARN: What does a car warranty cover?

      What types of warranties cover labor?

      Factory warranties are the most common warranty type that covers labor costs. These typically last for a specific number of years or miles, covering repairs related to defects in workmanship or materials.

      If the repair is covered by your warranty, labor should be included.

      Extended warranties, also known as vehicle service contracts, may cover labor costs for eligible repairs on mechanical and electrical components. You can buy these warranties separately and customize them to fit your needs. Most of the time, extended warranties won't cover preexisting conditions, so it may be too late to get coverage if you're already experiencing problems.

      Other warranties, such as part-specific manufacturer warranties for tires or batteries, may also cover labor costs for repairs related to those components. Insurance policies, like comprehensive coverage, may pay for labor costs in the event of an accident or other covered incidents.

      » MORE: Car warranty guide: what you need to know

      Does your extended warranty cover labor?

      Extended warranties offer plans that cover labor. But the details differ from one provider to another, and even between plans from the same provider.

      Some extended warranty providers cover labor costs for all repairs included in the plan, while others may only cover labor for certain repair types or up to a specific dollar limit.

      Watch out for plans that have:

      • Claim limits: Some plans have a maximum amount they’ll pay per repair visit or an overall limit on claims during the warranty period. You’ll have to pay the difference if your labor costs exceed these limits.
      • Restrictions on repair shops: Some extended warranties will only cover labor costs if you take your car to preapproved repair facilities. This could be a problem if your trusted mechanic isn’t on their list or you’re far from home when a breakdown happens.
      • Maintenance requirements: Providers may require regular maintenance and detailed records to keep your warranty valid. They might deny your claim if you miss an oil change or can’t prove you’ve kept up with maintenance.
      • Excluded repairs: Even if a warranty plan covers labor in general, it may exclude certain types of repairs. For example, it may not cover labor costs for routine maintenance or wear-and-tear parts like brakes and clutches — leaving you to foot the bill.
      • Diagnostic fees: Does your car need an inspection to see what’s wrong? Some warranties won’t cover the labor costs for diagnostic work. This means you’ll pay the mechanic to troubleshoot the issue before the repair work can begin.
      • Deductibles: Most extended warranties have per-visit deductibles. In this case, you’ll pay a set amount out of pocket each time you take your car in for a covered repair. These deductibles add up quickly if you need multiple visits to address a problem.

      Some providers also require a certain number of miles on the car before coverage kicks in. A reviewer from Nevada said, “[Endurance] told me I have to put 1,000 miles on my [Nissan Altima] before I can start using its services.”

      Note that even the best auto warranties have unique terms and conditions, so read them carefully when buying an extended warranty. If anything seems confusing, ask the provider(s) for clarification.

      Here are some well-known extended warranty providers and their plans that include labor coverage (minus your deductible and any non-covered items).

      How much does labor cost?

      If your warranty doesn't cover labor costs, or if you don't have one at all, you'll have to pay for it yourself. According to a Statista report, labor costs for car repairs average $100 to $131 per hour in the U.S. Exact costs vary depending on things like your location, vehicle and the repair type needed.

      For example, a simple oil change might only take an hour (or less) of labor, costing you around $80. But a more complex repair, like replacing a transmission, could take several hours and cost $3,000 or more. When budgeting for car repairs, factor in the cost of parts and labor.

      Simplify your search

      Compare plans tailored to your car & budget.

        FAQ

        Is a workmanship warranty the same as labor?

        Not quite. A workmanship warranty covers issues related to the labor quality and installation work. On the other hand, a labor warranty broadly covers repair labor costs for several years — even if the initial workmanship was fine.

        Does a bumper-to-bumper warranty cover labor costs?

        Yes, a bumper-to-bumper warranty generally covers labor costs, but the specific coverage details vary depending on the warranty plan. Different plans focus on specific car parts. (It’s also worth noting that they don’t typically cover repairs needed because of wear and tear, misuse or improper maintenance.)

        Do extended warranties cover labor?

        In most cases, extended warranties do cover labor costs. But the coverage level ultimately depends on the specific warranty you purchase. Some may not cover diagnostic work, so ask about this before getting an extended warranty.


        Article sources
        ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
        1. Consumer Financial Protection Bureau, “What are the differences between a manufacturer’s warranty and an extended vehicle warranty or service contract?” Accessed May 4, 2024.
        Did you find this article helpful? |
        Share this article