Manufacturers’ extended warranties extend factory warranty coverage for a period of time.
Jump to insightManufacturers’ warranties usually require you to see a dealership for repairs, which can sometimes be inconvenient.
Jump to insightManufacturers’ and third-party extended warranties can vary wildly in cost, so it’s best to shop around.
Jump to insightWhat is a manufacturer’s extended warranty?
A manufacturer’s extended warranty, also known as a vehicle service contract (VSC), effectively extends some or all your factory warranty coverage for a period of time. This type of warranty is available directly from dealerships.
Coverage levels vary, but they essentially cover repairs or replacements due to manufacturer defects. You can typically purchase comprehensive coverage, known as bumper-to-bumper coverage, or less comprehensive coverage, known as powertrain coverage.
Coverage is generally exclusionary, which means that the extended warranty will cover every part of the car except a handful of exceptions listed in your contract. These are usually small parts like gaskets, hoses, glass and wear-and-tear items.
Note that even used cars may be eligible for factory-backed coverage. Certified pre-owned (CPO) vehicles come with extended manufacturer coverage by default, and your dealer may offer options to extend your CPO warranty further. And if you’re buying a noncertified used car, it may still qualify for manufacturer extended plans if it’s within the carmaker’s age and mileage limits.
How it differs from a factory warranty
A factory warranty is the original warranty that comes standard with any new vehicle. It prevents buyers from paying out of pocket for early breakdowns due to manufacturing flaws.
The key differences between a manufacturer’s extended warranty and a factory warranty have to do with the timing, coverage and purpose.
| Factor | Factory warranty | Manufacturer’s extended warranty |
|---|---|---|
| Cost | Included with purchase | Extra cost |
| Timing | Starts on purchase date | Starts after factory warranty ends |
| Offered by | Manufacturer | Manufacturer (optional add-on) |
| Coverage duration | Limited (typically 3 to 5 years) | Limited (typically up to 7 to 10 years) |
| Transferable to new owner | Yes | Usually, but varies by plan |
| Customizable? | No | Yes |
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.
Pros
- OEM parts
- Customizable plans
- May increase resale value
- Peace of mind
Cons
- High upfront costs
- May overlap with factory warranty
- Usage or coverage restrictions
- Can’t always transfer or cancel
Manufacturers’ vs. third-party extended warranties
Here are some key differences between manufacturers’ and third-party extended warranties that might influence your purchase.
When you can buy it
Most manufacturers’ extended 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.
Pro tip
Most manufacturers’ extended warranties start from the in-service date, or when the first owner initially bought the car, and most third-party extended warranties start from the warranty purchase date.
Where you can go for repairs
Manufacturers’ warranties typically require you to use a dealership or approved repair facility for repairs when you file a claim (you may need to get preauthorization first). The dealership will diagnose the issue, complete the repair, accept your deductible and submit any required claim paperwork for you. Some manufacturers’ plans will waive your deductible if you return to the same dealership that sold you the warranty; this is often marketed as a disappearing deductible.
Third-party extended warranties generally let you choose any mechanic with ASE (National Institute for Automotive Service Excellence) certification. If the mechanic has a direct billing relationship with your warranty provider, the provider will pay them directly. Otherwise, you may need to request reimbursement from the warranty company.
Both manufacturer and third-party extended warranties may include benefits like roadside assistance and car rental reimbursement.
What your warranty will cover
Most automakers’ warranties will only use new OEM parts, which means your replacement parts are basically the same ones that came with your vehicle. Some third-party extended warranties only pay for used or aftermarket replacement parts, so they won’t necessarily use OEM parts.
How much it costs
Manufacturers’ and third-party extended warranties can vary drastically in cost, so it’s best to shop around. Some third-party extended warranty providers offer cheaper coverage than manufacturers, but it’s helpful to remember that the price of a manufacturer extended warranty may include dealer markup, which gives you room to negotiate the cost.
Prices also vary by coverage tier and deductible. Our analysis of extended car warranty costs found that a basic powertrain plan averages about $600 to $750 a year, while comprehensive bumper-to-bumper plans range from $1,000 to $5,000 per year on average. A plan with a higher deductible typically comes with a lower annual premium, and vice versa.
Both manufacturers and third-party extended warranty companies may offer interest-free financing.
Eligibility and legal considerations
Both carmakers and independent warranty companies may define a specific age limit or mileage limit for coverage, although manufacturers typically have stricter eligibility restrictions. Additionally, manufacturer extended warranties typically won’t cover rideshare use or other commercial use of your vehicle (though you can ask), but some third-party companies do.
Whatever provider you’re looking at for extended warranties, make sure you know your cancellation rights. State law sets a minimum period of time the provider must give you to change your mind and get your money back, but extended warranty laws vary by jurisdiction. You can review your contract for state-specific details or check with your local attorney general, consumer protection bureau or state department of insurance.
» RELATED: How to choose an extended car warranty plan
Is a manufacturer’s or third-party warranty right for you?
A manufacturer’s extended warranty may be right for you if:
- You want OEM parts and labor
- The dealer offers you a good deal
A third-party extended warranty may be right for you if:
- You want the flexibility to choose your own mechanic
- You want more customization options
Learn more about specific manufacturers' 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.
Explore manufacturer’s extended warranty programs below:
FAQ
Will an extended warranty add resale value to my car?
Purchasing an extended warranty, whether from the manufacturer or a third-party warranty company, may add resale value to your car if you sell your vehicle in a private sale. However, there’s no guarantee that it will add resale value to your car.
Where can I buy an automaker’s extended warranty?
For most car 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.
Are extended warranties transferable?
Some manufacturer’s extended warranties and most third-party extended warranties are transferable if you decide to sell your car. However, this may incur a fee of around $50 to $75.
Can you cancel a manufacturer’s extended warranty?
Whether you can cancel a manufacturer’s extended warranty depends on the specific manufacturer of your car. Some manufacturers allow you to cancel at any time, while others only allow you to cancel within 30 to 60 days. Some manufacturers don’t allow you to cancel an extended warranty at all once purchased.
Are manufacturer-backed extended warranties worth it?
Manufacturer-backed extended warranties can be worth it if you want peace of mind against future repair costs. They can also be worth it if you want OEM parts and specialized mechanics working on your car. However, if your car model is generally known for reliability, or if you anticipate annual repairs being below the cost of an extended warranty, purchasing one may not be worth it.
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 guide include:
- Consumer Finance Protection Bureau, “What Are the Differences Between a Manufacturer’s Warranty and an Extended Vehicle Warranty or Service Contract?” Accessed Aug. 16, 2026.
- Federal Trade Commission, “Auto Warranties and Service Contracts.” Accessed Aug. 16, 2026.
