A car extended warranty can help you cover the cost of costly repairs that may occur after your vehicle’s original factory warranty has expired. However, it’s important to understand how much an extended warranty could end up costing before you decide if it’s worth the investment.
The price of an extended warranty varies by car model, what the plan covers and whether it’s offered through your dealer or an independent company. It also depends on how long you want the coverage to last and if you opt for additional perks such as roadside assistance or rental car reimbursement.
According to Consumer Reports, the average initial cost of a warranty plan is $1,214. In addition to the upfront costs, there are often recurring fees that can add up over time. Some of these include service contract premiums, deductibles and other ancillary costs.
In terms of deductibles, some extended warranties have a “per visit” or “per repair” deductible while others have a flat-rate deductible that’s charged for each covered service visit or for each repaired issue. The deductibles can have a big impact on the overall car extended warranty cost.
Other things to consider when assessing if a plan is worth it are the coverage limitations and how well the service contract is backed up. For example, some service contracts only offer a limited number of authorized repair shops or require you to pay for a portion of the cost of parts that aren’t covered by the plan.
You’ll also need to think about how reliable your vehicle is and how likely it is that you’ll need expensive repairs in the future. The more reliable your vehicle, the less expensive your extended auto warranty will be.
Another thing to keep in mind is that an extended warranty won’t cover maintenance items such as replacing brake pads or rotors, replacing your air filter or lubricating the steering components. Those are items that are more likely to need replacement over the lifetime of your vehicle than a transmission or engine failure.
The best way to determine how much an extended warranty might cost is by getting a quote. You can usually get a quick quote online, or by contacting the company directly. Be sure to ask about any discounts that might be available to you, such as senior citizen or military discounts.
In many cases, an extended warranty is a smart investment if you have the right vehicle model and aren’t planning to sell or trade it anytime soon. However, it’s important to do your homework and watch out for scams when selecting a company to work with.