A single engine repair can cost upwards of $5,000—more than many people have in emergency savings. An extended car warranty helps avoid these unexpected expenses, keeping your vehicle protected long after the manufacturer’s coverage expires.
Whether you drive a brand-new car or one with over 100,000 miles, an extended warranty can provide peace of mind by covering costly repairs. The key is choosing the right provider with transparent terms, solid coverage, and reliable customer service.
Top 5 Extended Car Warranty Companies
The best extended car warranties offer flexible coverage, straightforward claims, and added perks like roadside assistance and rental car reimbursement. Here are our top picks for 2025.
1. Endurance
Endurance stands out for its direct-to-consumer approach, cutting out middlemen to keep costs lower. It covers both new and high-mileage cars, offering four flexible plans.
2. EasyCare
EasyCare has been in business for over 30 years, offering coverage for both personal and commercial vehicles, including ride-share cars—an option many competitors don’t provide.
3. Carchex
Carchex is a well-established provider known for offering flexible extended warranty plans tailored to different budgets and vehicle needs. With over 20 years in the industry, it has earned high ratings for transparency and customer service.
4. Olive
Olive takes a digital-first approach, allowing customers to purchase and manage their warranty entirely online. Coverage begins immediately without a waiting period.
5. CarShield
CarShield is one of the most well-known extended car warranty providers, offering a wide range of coverage plans at competitive prices. With over 1 million customers served, it’s a popular choice for budget-conscious drivers looking for flexible payment options.
What is an extended car warranty?
An extended warranty is a type of auto repair contract which covers the cost of major repairs to your vehicle. Also known as aftermarket car warranties, they are designed to provide coverage for certain repairs once the manufacturer’s warranty expires. However, in reality, these can sometimes overlap.
By purchasing an extended warranty coverage, you can potentially save money in comparison to paying out of pocket for major repairs down the line.
In addition to repair coverage, the best extended car warranty companies also offer additional benefits such as rental car coverage, and roadside assistance. Extended car warranties can be purchased either from third-party car warranty companies or direct from the manufacturer.
How Extended Warranties Work
An extended car warranty kicks in after your factory warranty expires, covering certain repairs due to mechanical or electrical breakdowns. Instead of paying out-of-pocket for major fixes, your warranty provider handles the cost, depending on your contract.
There are two main types of extended warranties:
- Exclusionary Plans: Cover almost everything except a few listed exclusions, similar to a bumper-to-bumper warranty.
- Named-Component Plans: Cover only the specific parts listed in your contract, usually focusing on major systems like the engine and transmission.
Many providers allow you to break the cost into monthly payments, making coverage more manageable.
What Extended Warranties Cover
Most extended warranties cover big-ticket repairs, but coverage varies by provider and plan. Commonly covered components include:
- Powertrain: Engine, transmission, and drivetrain components
- Electrical Systems: Alternator, wiring, and onboard electronics
- Air Conditioning and Heating: Compressor, condenser, and related parts
- High-Tech Features: GPS, infotainment systems, and sensors (if included in your plan)
What Extended Warranties Don’t Cover
Extended warranties don’t cover everything. Here’s what they typically exclude:
- Routine Maintenance: Oil changes, tire rotations, brake pads, and wiper blades
- Damage from Accidents or Neglect: Warranties cover mechanical breakdowns, not collisions or poor maintenance
- Wear-and-Tear Items: Batteries, tires, and cosmetic damage aren’t included
If you want maintenance perks, some providers offer separate plans that include oil changes and tire rotations. Always check what’s included before signing a contract.
Pros and Cons of Extended Warranties
An extended car warranty can help cover major repair costs, but it’s not always the best choice for every driver. Here’s a quick breakdown of the key benefits and drawbacks.
Pros
- Protects Against Expensive Repairs – Covers costly fixes like engine and transmission failures that could otherwise cost thousands.
- Predictable Budgeting – Helps avoid unexpected repair bills by breaking costs into monthly payments.
- Adds Resale Value – A transferable warranty can make your car more attractive to buyers.
- Includes Extra Perks – Many plans offer roadside assistance, rental car reimbursement, and trip interruption coverage.
- Covers High-Tech Repairs – Some plans include GPS, infotainment screens, and other expensive electronics.
Cons
- You May Never Use It – If your car is reliable, you might pay for coverage you don’t need.
- Limited Coverage – Routine maintenance like oil changes, brake pads, and tires aren’t included.
- Claim Denials Are Possible – Some providers have strict rules, and coverage can be denied if you don’t follow maintenance guidelines.
- Can Be Expensive – Plans can cost $1,500–$4,000, and if you finance it, you’ll also pay interest.
- Repair Restrictions – Some warranties require you to use specific repair shops instead of your preferred mechanic.
Before deciding, consider your car’s reliability, mileage, and potential repair costs. If your vehicle is older or out of factory warranty, a plan could be worth it. If not, setting aside money for repairs might be the better option.
How to Choose an Extended Car Warranty
Picking the right extended car warranty comes down to your vehicle’s age, condition, and how long you plan to keep it. Here’s how to make an informed choice.
1. Match Your Coverage to Your Car’s Age and Mileage
- If your car is under 5 years old with fewer than 50,000 miles, a full bumper-to-bumper plan may not be necessary, since you likely still have a manufacturer’s warranty. If you want extra coverage, look for a comprehensive plan with high-tech protection.
- If your car has over 100,000 miles, mechanical failures are more likely. A powertrain warranty covering the engine and transmission can prevent costly repairs.
- If you drive a high-mileage or older car, make sure the provider doesn’t have strict mileage limits. Some companies won’t cover cars over 150,000 miles.
2. Compare Costs to Potential Repairs
Look at common repair costs for your vehicle’s make and model. For example:
- A transmission replacement can cost $3,000–$5,000
- A timing belt repair can cost $1,000–$2,000
- A fuel system repair can cost $500–$1,500
If the warranty costs less than what you’d likely pay for a major repair, it could be worth it.
3. Check What’s Actually Covered
Not all extended warranties cover the same things. Read the exclusion list before signing. If a provider only covers powertrain components but excludes air conditioning and electronics, you might not be getting the coverage you need.
4. Understand the Claim Process
- Do you have to pay upfront and wait for reimbursement?
- Can you choose your own mechanic, or do you have to use an approved network?
- How easy is it to file a claim? Some companies handle claims directly, while others work through third-party administrators, which can slow things down.
5. Look for Flexibility in Payments and Cancellation
Some companies let you pay month-to-month instead of locking you into a multi-year contract. Also, check the cancellation policy—many providers allow full refunds if you cancel within the first 30 days.
Buying an Extended Warranty from a Dealership
Buying a warranty from a dealership can be convenient, but it’s usually more expensive. Dealers roll warranties into car loans, meaning you’ll pay interest on top of the base cost. Before accepting a dealership’s offer:
- Get outside quotes – Compare prices from third-party providers before negotiating.
- Check contract terms – Make sure you understand what’s covered, the claim process, and cancellation policies.
- Watch out for loan markups – Dealers may extend your loan term or increase your down payment to fit the warranty into your monthly budget.
Negotiating with the Dealer
A dealership’s first offer isn’t always the best. Use these tips to get a better deal:
- Don’t accept the first price – Warranties are negotiable, so ask for a lower rate.
- Use competing quotes as leverage – Show them better deals from third-party companies.
- Take your time – Don’t feel pressured to decide immediately. You can always add a warranty later.
- Walk away if needed – If the deal doesn’t seem fair, leave. You’re not obligated to buy a warranty on the spot.
Before signing, double-check the total cost and make sure it fits your budget. If you’re unsure, take time to review your options before making a final decision.
Common Issues to Avoid with Extended Warranties
Extended warranties can save money, but not all are a good deal. The biggest pitfalls to watch for are overpriced dealership plans, hidden exclusions, and strict claim rules.
Dealer warranties often cost more than third-party options, and some companies act as middlemen, making claim approvals slower. Many plans also have fine print exclusions that limit coverage, leaving you with unexpected repair bills.
Another issue is strict maintenance requirements—if you miss an oil change or tire rotation, your claim could be denied. Some warranties also limit where you can get repairs, so check that your preferred mechanic is covered.
To avoid these problems, compare providers, read the contract carefully, and make sure the coverage fits your needs.
Bottom Line
An extended car warranty can be a smart way to manage repair costs and reduce financial stress as your vehicle ages. The right provider will offer flexible plans, transparent terms, and dependable support when you need it most.
Before making a decision, take the time to compare coverage options, review customer feedback, and assess how each plan fits your budget and driving habits. By doing so, you can choose a warranty that complements your needs and keeps your vehicle running smoothly.
Frequently Asked Questions
How much does an extended warranty cost?
Most extended warranties range from $1,500 to $4,000, depending on coverage, vehicle age, and mileage. Many providers offer monthly payment plans, typically around $100 per month.
Is an extended car warranty worth it?
It depends. If your car is older or unreliable, a warranty can save thousands on repairs. If your car is new, has a strong reliability record, or still has a manufacturer’s warranty, it may not be necessary.
What repairs are not covered?
Extended warranties don’t cover routine maintenance like oil changes, brake pads, and tires. They also won’t cover accident damage, neglect, or environmental damage like floods or hail.
Can I transfer my extended warranty if I sell my car?
Most extended warranties are transferable to a new owner, which can increase your car’s resale value. Some providers charge a small transfer fee.
How do I file a claim?
Take your car to an approved repair shop, where they’ll diagnose the issue and contact your warranty provider. Some companies pay the shop directly, while others require you to pay upfront and submit for reimbursement.
Does an extended warranty cover towing and roadside assistance?
Many extended warranties include roadside assistance, covering towing, battery jumps, flat tires, and fuel delivery. Coverage varies, so check the details of your plan.
Can I cancel my extended warranty?
Most providers allow cancellations within 30-60 days for a full refund if no claims have been made. After that, refunds are typically prorated.
