What to Know About Manufacturers’ Extended Warranties

What is a manufacturer’s extended warranty?

A manufacturer’s extended warranty is a car warranty (sometimes called a vehicle service contract) you buy through a dealership. Coverage varies, but they essentially cover the cost to repair or replace things that malfunction because of the manufacturer’s error.

A manufacturer’s extended warranty isn’t necessarily the same as a dealer warranty. Some dealers sell both first- and third-party warranties, and some have stopped selling their automaker’s extended warranties altogether.

How it differs from a factory warranty

A factory warranty is the original warranty that comes standard with any new vehicle. The point of a factory warranty is to prevent buyers from paying out-of-pocket for early breakdowns due to manufacturing flaws.

A manufacturer’s extended warranty essentially “extends” the coverage period after the factory warranty expires. The key difference between a manufacturer’s extended warranty and a factory warranty has to do with the timing, coverage and purpose.

Coverage periods and start dates

One of the most critical yet confusing aspects of an extended auto warranty is when it actually starts: the in-service date or the warranty purchase date. It’s usually a small detail in the contract, but it makes a huge difference.

• The in-service date is when the first owner initially bought the car. If you’re not the first owner, you can find your vehicle’s exact in-service date by calling the dealer who sold you the vehicle or by checking your vehicle’s CARFAX report.
• The warranty purchase date is, fittingly, the date when you purchased your extended auto warranty.

Real-world example

You’re about to buy a pre-owned 2020 GMC Acadia with 34,000 miles. The factory warranty runs out at three years/36,000 miles. You’re considering an extended auto warranty to shield you from repair bills.

The dealer offers you a “five-year/60,000-mile” plan for $3,000. This sounds like a good deal since you only plan to own the car for the next five years.

But the plan they’re offering starts from the in-service date (not the warranty purchase date). This means it expires just two years or 26,000 miles from now. So, it probably isn’t worth paying an extra $3,000.

Pro tip

Most first-party extended warranties start from the in-service date, and most third-party warranties start from the warranty purchase date. But it’s always best to double-check before you end up with far less coverage than you were expecting.

» RELATED: How to choose an extended car warranty plan

How we learned about car brands’ extended warranties

We broke down the coverage, term options and benefits of each warranty program and spoke directly with dozens of dealership finance managers to get unique insights and price quotes for various models within each brand’s lineup.

We then compared the cost of these warranties with the estimated cost of paying out of pocket for repairs to determine if the brand’s extended warranties were worth it, which you can explore below.

Explore manufacturer’s extended warranty programs

• Acura
• Alfa Romeo
• Audi
• BMW
• Buick
• Cadillac
• Chevrolet
• Chrysler
• Dodge
• Ford
• Genesis
• GMC
• Honda
• Hyundai
• Infiniti
• Jaguar
• Jeep
• Kia
• Land Rover
• Lexus
• Lincoln
• Maserati
• Mazda
• Mercedes-Benz
• Mini
• Mitsubishi
• Nissan
• Porsche
• Ram
• Subaru
• Tesla
• Toyota
• Volkswagen
• Volvo

Pros and cons of a manufacturer’s extended warranty

A manufacturer’s extended warranty is ideal for owners of luxury or complex vehicles with costly repairs and people who plan to keep the vehicle for many years. But it may be unnecessary if you trade in your car often, the car is known for reliability or you can easily afford an unexpected car repair.

» MORE: Pros and cons of extended auto warranties

Why dealers push extended warranties

Given the profit potential, virtually all franchised dealerships offer some kind of extended auto warranty. Sometimes it’s from the automaker’s official extended warranty program, and sometimes it’s a third-party option. Sometimes, a dealer offers both.

But, based on our experience of calling 100-plus dealers across brands, we’d say that most of the time, dealers preferred selling the third-party warranty. In some cases, they’d even stopped selling the manufacturer’s warranties altogether.

One Maserati dealer said he’d still sell us a Maserati warranty if we really wanted one but that he’d have to “blow the dust off the booklet” to answer our questions.

Factors affecting warranty pricing

Some of the dealership finance managers we spoke with were transparent about why they switched to a third-party provider. The most common reason was that the third-party providers simply offered better coverage for less.

Most automakers’ extended warranties can only be purchased through a finance manager at a dealership. The handful of exceptions include Ford, Chrysler, Dodge, Ram, Fiat, Jeep and Alfa Romeo, which allow you to get quotes for and purchase warranties online (see our brand-specific coverage above for details).

For all other brands, however, you’ll have to ring up the dealer. This can lead to opaque pricing and higher costs, as certain dealers will take advantage of the fact that you don’t know the MSRP of the warranty and bake in steep upcharges.

How to negotiate better deals: just ask 

Here is a part of a real conversation we had with a Land Rover dealer while researching this article:

Dealer: “The price for the seven-year/100,000-mile plan would be $6,984.”

Me: “Woof, that high?”

Dealer: “OK, I can do $5,984.”

Needless to say, you may see favorable results by gently pushing back on price, negotiating and collecting quotes from multiple local dealers.

Coverage details and limitations

“Exclusionary” coverage means the extended warranty will cover every part of the car except a handful of exceptions listed in your contract. These are usually small things like gaskets, hoses, glass, wear-and-tear items, cosmetics, and a few other bits and bobs. That’s why these are often marketed as “bumper-to-bumper,” “comprehensive,” or “platinum” plans.

Common exclusions

Extended manufacturers’ warranties generally don’t cover routine maintenance, like oil changes.

Some automakers also sell “silver” plans that only cover roughly 200 parts or "powertrain" plans that only cover a few dozen parts around your engine and transmission. These plans may be approximately 20% cheaper than an exclusionary plan, but in a vehicle with 2,000+ parts, the likelihood that a silver or powertrain plan will cover your next expensive repair is surprisingly low.

“We actually stopped selling Silver and Powertrain plans a long time ago,” one dealer finance manager told ConsumerAffairs. “They just resulted in too much disappointment on the customer end, and our service guys got tired of telling customers their repairs wouldn’t be covered under the plan they’d just paid $2,500 for.

Manufacturer vs. third-party warranties

Here are some other key differences between first- and third-party auto warranties that might influence your purchase. (We covered some of these earlier in passing, but we think they’re worth repeating.)

• When you can buy the warranty: Most first-party warranties must be purchased within the factory warranty period, while most third-party warranties can be purchased at any time within your vehicle’s first 10 years or 100,000 miles of operation.
• Where you can go for repairs: Manufacturers’ warranties typically require you to go back to a licensed dealer for repairs, while third-party warranties almost always allow you to visit any ASE-certified mechanic. Some manufacturers’ plans will actually waive your deductible if you return to the same dealership that sold you the warranty, often marketed as a “disappearing deductible.” However, it also means you can’t simply take your car to your preferred local mechanic.
• The parts your warranty will pay for: Most automakers’ warranties will only use new or remanufactured OEM parts, which means your replacement parts are basically the same ones that came with your vehicle. Some third-party warranties only pay for used or aftermarket replacement parts.

Some drivers choose their automakers’ extended warranty over a third-party option because they assume the former will provide superior customer service, but reviews on ConsumerAffairs suggest that’s not always the case.

Real-world example

A ConsumerAffairs reviewer from New York bought the Honda Care extender warranty package for the dealer because of concerns about replacing electronics out of warranty. “I've heard horror stories about third-party warranties so I made sure to purchase from Honda — who I thought was a reputable company,” Frank wrote.

That opinion changed when Frank’s 2018 Honda Odyssey reportedly developed a problem that neither the dealership nor Honda corporate would take responsibility for. “I'm so annoyed and disappointed by this treatment. Now my family is out thousands of dollars for something that absolutely should have been covered by the extended warranty,” Frank continued.

We want to be clear: Third-party warranty companies can absolutely draw customer ire as well, but consumer reviews on our site indicate that working with a reputable third-party warranty company leaves many people happy with their experiences.

Which is right for you?

If customer care and the flexibility to choose your own mechanic are important to you, you might be happier with a third-party warranty. But if you want OEM parts and labor (and the dealer strikes you a deal), your manufacturer’s extended warranty may be the better option.

Which is the best value?

To help you get the best possible deal, we compared the cost of the manufacturers’ plans with quotes we collected from some of our top extended car warranty companies.

We compared the cost of automakers’ plans with the cost of similar plans from olive and Endurance. The results were all over the place:

• For a BMW, olive quoted us 35% higher than BMW, while Endurance quoted us 35% lower.
• For a Volkswagen, both olive and Endurance quoted significantly lower than VW on a 2019 model, but curiously, the prices rose for 2021 and 2023 models.
• For a Chevrolet, it was cheaper than both third-party options when we looked into coverage for several of its vehicles.
• For a Land Rover, Endurance’s rates were up to 20% lower than the manufacturer’s official option (albeit with a higher deductible). olive wouldn’t cover Land Rover vehicles at all.