What to know about manufacturers’ extended warranties
Find out their advantages and disadvantages compared with third-party warranties
If you’ve been shopping around for an extended auto warranty, you might’ve already heard about some of the larger third-party warranty companies, like CarShield, but your car’s manufacturer probably offers its own extended warranty plans too. (Not to be confused with the factory warranty that came with your vehicle.)
Automaker-backed extended warranty programs, like Honda Care and Audi Pure Protection, can offer good coverage, helpful perks and the promise of using original (OEM) parts and labor to fix your car. However, there are quirks and caveats with these plans that can make or break your warranty experience.
So, what should you know about automakers’ extended warranties? And how do they compare with the best the third-party market can offer? Read on to find out.
Automakers’ extended warranties tend to offer good coverage and decent benefits, and they generally pay for new or remanufactured OEM parts instead of aftermarket components.
Jump to insightHowever, they can be inconvenient to buy and require you to return to the dealer for repairs.
Jump to insightSome manufacturers also measure their warranty terms in a way that makes it look like you’re getting more than you really are.
Jump to insightThe difference in cost between first- and third-party extended auto warranties can vary wildly — sometimes thousands in either direction — so it’s best to shop around.
Jump to insightWhat is a manufacturer’s extended warranty?
Extended manufacturer warranties will generally not cover routine maintenance tasks like oil changes.
A manufacturer’s extended warranty is an auto warranty that you purchase through the dealer rather than a third-party company when you buy a new vehicle. As we mentioned earlier, these warranties have names such as Honda Care, Toyota Extra Care, Ford Protect and Audi Pure Protection.
They cost extra but are not necessary to buy. Coverage varies, but these service contracts essentially protect various auto components of a vehicle, covering the cost to repair or replace things that malfunction.
How we learned about car brands’ extended warranties
In the months leading up to this article, we obsessively researched major automakers’ extended warranty programs as part of a larger series on manufacturer extended warranties. You can find links to those articles by clicking on the plus sign below.
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.
Finally, 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.
» NEW TO EXTENDED WARRANTIES? What is a vehicle service contract?
That experience gave us some unique insights into the manufacturer extended warranty market, which we wanted to share here.
What you should know before buying an extended warranty from your dealership
Extended warranty sales can be highly profitable for dealerships, so if you do business with a dealer — even simple repair work — you’re very likely to hear a sales pitch for one.
Here’s everything you need to know before considering the purchase of an extended warranty.
1) A “dealer warranty” isn’t always a manufacturer extended warranty.
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.
» MORE: Car warranty guide: what you need to know
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. And since the third-party warranty allowed customers to return to any ASE-certified shop for repairs, the dealer’s service bays remained less busy.
So, when considering a “dealer warranty,” the first thing you’ll want to ask is whether it’s from the manufacturer or a third party. And just because the dealer prefers the third-party option doesn’t always mean it’s right for you, which we’ll discuss more below.
2) Your warranty’s start date makes a huge difference.
- The in-service date is the date 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 up 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.
Let’s say you’re about to purchase a pre-owned 2020 GMC Acadia with 34,000 miles. The factory warranty is about to run out (three years/36,000 miles), so 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 just $3,000, which sounds like a good deal since you only plan to own the car for the next five years.
However, you notice that 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 and probably isn’t worth paying $3,000 for.
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.
3) You probably want exclusionary coverage.
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.”
4) You can save by negotiating and shopping around.
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.
To illustrate, here is a conversation we had with a Land Rover dealer a week before writing this article:
“The price for the seven-year/100,000-mile plan would be $6,984.”
“Woof, that high?”
“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.
5) Don’t count on your extended warranty adding resale value to your car.
We couldn’t find any data to back up this claim.
In theory, it could happen; if you sell your vehicle to a private party, they may be willing to throw in a couple hundred bucks to secure your remaining warranty amount (which typically requires paperwork and an approximate $50 transfer fee on your part). But it’s best not to let the dubious promise of higher resale values influence your purchase in the first place.
6) Purchasing a warranty from the dealer could mean you’re going back to the dealer for repairs.
However, what that also means is that you can’t take your car down the street to your preferred mechanic for repairs. And if there’s only one dealer in town, and their customer service or turnaround times aren’t great, you might want to consider that before committing to a multiyear extended warranty.
By contrast, most third-party warranty companies (like Omega Auto Care or Toco) allow you to visit any ASE-certified mechanic for repairs, provided those repairs have been pre-authorized.
7) Third-party warranties can be just as good as manufacturer warranties.
“I bought the ‘Honda Care’ extended warranty from the dealer because I was concerned about the potential cost of diagnosing/repairing any electronics out of warranty,” wrote Frank, a ConsumerAffairs reviewer from New York. “I've heard horror stories about third-party warranties so I made sure to purchase from Honda — who I thought was a reputable company.”
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.
» LEARN: How to avoid the worst extended auto warranty companies
Our picks for the best extended car warranty companies, which are third-party providers, all managed an overall satisfaction rating of at least 4 out of 5 at the time of publishing.
“This company is outstanding!” wrote Paula, a ConsumerAffairs reviewer from New Jersey, in reference to Concord Auto Protect. “I used my policy several months after purchasing it and the cost of repairs almost covered the cost of the policy on my BMW. I just purchased another policy for my son's Jeep! Money well spent!”
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.
Automaker warranties vs. third-party warranties
Let’s look at the bottom line: How do factory-backed extended warranties stack up against third-party options?
To find out how they differed in terms of price, we compared the cost of automakers’ plans with the cost of similar plans from olive and Endurance.
The results were all over the place:
- When we got quotes for BMWs, olive quoted us 35% higher than BMW, while Endurance quoted us 35% lower.
- With Volkswagen, both olive and Endurance quoted significantly lower than VW on a 2019 model, but curiously, the prices rose for 2021 and 2023 models.
- Chevrolet was cheaper than both third-party options when we looked into coverage for several of its vehicles.
- olive wouldn’t cover Land Rover vehicles at all, but Endurance’s rates were up to 20% lower than the manufacturer’s official option (albeit with a higher deductible).
The only common theme emerging was this: It’s worth shopping around. Most third-party extended auto warranty providers allow you to get quick quotes online, so regardless of which make and model you’re looking to protect, it’s usually worth collecting a few competing offers before you pick a warranty provider.
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: Manufacturer 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.
- 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.
Most third-party warranties are transferable if you decide to sell a car covered by one. However, this may incur a fee of around $50 to $75.
To help you decide whether a first- or third-party extended auto warranty is right for you, consider the cost involved and where you’d like to take your car. 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.
For more on extended auto warranties — such as what they cost and how to avoid warranty scams — check out our home base for extended auto warranty content.
FAQ
Should I buy an automaker’s extended warranty?
Whether you should buy an extended warranty from your car’s manufacturer really depends on your situation and who the manufacturer is. Most of this article was dedicated to helping you understand the general differences between first- and third-party extended auto warranties, but the manufacturer-specific articles we listed earlier should help you decide whether to buy one or the other.
Where can I buy an automaker’s extended warranty?
If you drive a Ford or Mopar vehicle (like Chrysler, Fiat, Dodge, Jeep, Ram or Alfa Romeo), you may be able to get a quote and purchase your warranty online. (See our brand-specific articles at the top of this article for more information.)
For other brands, you’ll likely have to call a dealership and speak directly with a finance manager to get quotes and purchase a warranty from your vehicle’s manufacturer.
Is a manufacturer warranty the same as a dealer warranty?
A manufacturer extended warranty isn’t necessarily the same as a dealer warranty. In fact, some dealers sell both first- and third-party warranties, and some have stopped selling their automaker’s extended warranties altogether.
