Key Points:
- Car repair warranties cover the cost of mechanical breakdowns on specified systems of the vehicle.
- Repair shops often offer warranties on their work for 1 year/12,000 miles.
- Compare third-party companies to cover repairs after your factory warranty expires.
Vehicle repairs can be very expensive. While new vehicles are typically protected under a factory car repair warranty for 3 years or 36,000 miles, once one of those coverage limits is reached, the financial responsibility of repairs falls to car owners.
This article makes it easier for you to decide whether a car repair warranty is right for you by describing what car repair warranties are, what they cost, and who the most reputable providers in the industry are. If you’re considering one, we recommend getting a few quotes from the best extended car warranty companies so you can see personalized pricing side by side.
What Is A Car Repair Warranty?
A car repair warranty usually refers to an optional, extended automobile warranty that can be used for repairs after a vehicle’s manufacturer warranty expires. When you own a car repair warranty, you make relatively small monthly payments toward your contract and when your car needs a covered repair, you simply pay a deductible for the service.
That said, there are multiple types of car repair warranties, from factory warranties to guarantees from repair shops.
New Car Warranties
All manufacturers offer car repair warranties on new vehicles. These cover defects in materials and workmanship for a set period of time. Factory warranties consist of bumper-to-bumper and powertrain coverage. Usually, automakers cover the powertrain (engine, transmission, and drive axle) for a longer period of time.
Extended Warranties
Manufacturers and third-party companies both offer extended service contracts, though the term “extended warranty” technically can only be used by manufacturers. These plans can offer the same level of coverage as factory warranties.
Extended warranties, also known as vehicle service contracts, are offered by dealerships and third-party providers. Compared to dealership warranties, car repair warranties offered by third-party providers are generally more affordable and better suited for a high-mileage or used car.
Repair Shop Warranties
You might know repair shops provide warranties, too. Many reputable shops will guarantee their repairs for 1 year or 12,000 miles. This means if a shop fixes your engine and you have the same breakdown six months later, the shop should cover the engine again if it’s the same issue.
What Does A Car Repair Warranty Cover?
A car warranty covers a wide range of repairs. Different types of repairs are covered by each provider and plan. There are usually some exclusions to every plan. We’ll cover the two main types below.
It’s important to read a sample contract before purchasing an extended auto repair warranty to make sure it covers a breadth of common repairs for your specific vehicle type. Leading third-party providers, such as Endurance and Carchex, provide sample extended auto warranty contracts on their websites for you to review. This is something we look for. When providers don’t offer sample contracts online, we give them a lower transparency score.
Bumper-To-Bumper Warranty
A bumper-to-bumper extended warranty covers mechanical breakdowns on the whole car except for exclusions. This type of warranty is also called comprehensive coverage or exclusionary coverage. It’s also known as a New Vehicle Limited Warranty when it comes from a manufacturer.
Powertrain Warranty
A powertrain warranty covers mechanical breakdowns in the engine, transmission, and drive axle. Some plans also include electric vehicle drive systems in this type of coverage. Powertrain components rarely break down, but the repairs can be expensive when they do.
Extra Perks
Most car repair warranties come with extra perks. The following three benefits are fairly standard in the industry:
- Rental car coverage: This reimburses you for rental car costs, up to a limit, while your car is in the shop.
- Roadside assistance: This covers lockout assistance, battery jump-start, spare tire installation, fluid delivery, and towing.
- Trip interruption: This reimburses you for food and lodging if you have a breakdown far from home.
Exclusions
Car repair warranties are meant to cover unexpected breakdowns, not parts that are expected to wear out like brake pads or wiper blades. Here are a few more common exclusions:
- Aftermarket modifications
- Cosmetic items and trim
- Damage from accidents, the environment, or misuse
- Damage from lack of maintenance
- Damage to a covered part by a non-covered part
- Non-authorized repairs
- Regular maintenance services
How Much Does A Car Repair Warranty Cost?
A car repair warranty’s cost is determined by the provider with whom you choose to sign your contract and a variety of factors related to your vehicle. We compared quotes from multiple providers and found that the average extended warranty costs $977 per year of coverage. Exclusionary plans cost about $1,005 per year of coverage and powertrain plans cost about $953 per year of coverage.
After reviewing several providers, our reviews team found that both Endurance and Carchex provide car repair warranties at reasonable costs to automobile owners.
Here is a list of some of the factors that will determine the cost of your car repair warranty:
- Age of the vehicle
- Buying from a dealership versus a third-party provider
- Driving habits and routine vehicle maintenance
- Level of warranty coverage
- Mileage of the vehicle
- Number of high-tech components in the vehicle
- Vehicle year, make, and model
Should You Buy A Car Repair Warranty?
It’s important to consider the pros and cons of an extended car warranty. In general, if you are worried that you can’t afford your repair bill and you would like to keep your car for several more years, it is wise to consider purchasing a car repair warranty to provide peace of mind.
If you are able to afford costly repairs or you plan to purchase a different car in the next several years, the cost of the protection plan is probably higher than the value you would receive from it.
What To Look For When Buying A Car Repair Warranty
We recommend that car owners look for the following qualities when evaluating car repair warranty providers:
Our Recommendations For Car Repair Warranty Providers
Our top picks for extended car repair warranties include Endurance and Carchex.
Endurance: Best Overall
Endurance, which offers direct-to-consumer car repair warranties, received a 4.7-star rating from our reviews team. Endurance stands out among its competitors for its coverage offering. You can choose from six plans that range from factory-level protection to powertrain coverage. One of the plans also covers maintenance services like oil changes, which can help you keep your car in good shape.
Carchex: Best Industry Reputation
Carchex received a 4.5-star rating from our reviews team. Carchex’s A+ rating on the BBB shows the company takes customer service seriously and is responsive to its customers. Carchex has received industry endorsements from Edmunds.com, Kelley Blue Book, and Carfax. Carchex provides five different plan options, each of which can be customized. In addition, each of their plans comes with 24/7 emergency roadside assistance, trip interruption services, and lockout services.
Car Repair Warranty: Conclusion
You have many options if you want to extend repair warranty coverage after the factory warranty expires. Compare quotes from multiple companies to find the best option for you and your vehicle.
Car Repair Warranties: FAQ
Below are a few frequently asked questions about car repair warranties:
How We Rate Warranty Providers
Our review process aims to deliver consistent and unbiased assessments of extended auto warranty providers. While there are multiple qualities that make a warranty company successful, our review team focuses on those we believe are the most important for consumers:
- Reputation: It’s important that an extended car warranty company is able to meet its claims obligations. Companies with a strong rating from the Better Business Bureau (BBB) and a long history of reliable service score well in this category. We also evaluate the availability and transparency of each company’s contracts, as well as whether each provider offers a money-back guarantee.
- Coverage: Our team of experts looks at the number of extended warranty plans available, as well as term limits, exclusions, and added benefits like roadside assistance. Ratings also take into account the availability of maintenance coverage.
- Cost: Cost can be difficult to compare between providers because so many factors impact vehicle service contract pricing. To determine our cost score, we perform a secret shopper analysis for a variety of vehicles and plans and consider available deductibles.
- Customer Experience: We listen to real customer sales calls and comb through reviews on sites like the BBB to learn about customer experiences. Warranty companies with a low volume of complaints score well in this area. We also consider the availability of mobile apps and chat features.
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