How Much Does An Extended Car Warranty Cost?

What is an Extended Car Warranty?

An extended warranty is a contract that you purchase from a provider who agrees to pay for repairs should your vehicle breakdown. The name “extended warranty” is not exactly ideal. Extended warranties are often provided by manufacturers and protect against defects, and this is not really the same thing.

The two differ for two main reasons. First, the manufacturer may not be involved, though some brands do offer extended warranties. Second, the broken item or needed repair may be due to wear and tear, not any kind of defect, or unexpected failure. So, names like “service contract” and “mechanical breakdown insurance coverage” are often used instead. We call them extended warranties all the same. A tomato may be a fruit but we call it a vegetable.

Don’t confuse an extended warranty with a pre-paid maintenance plan. The two are not the same thing. Maintenance plans cover scheduled work that your car needs to operate properly. What we are talking about here are things that go wrong and cause a breakdown, or a needed repair.

How Much Does an Extended Warranty Cost?

Your most difficult challenge when selecting an extended warranty is to determine the cost. If we had to pin a single cost answer on this question, we would reply, “About $130 per month or $3,000 if you pay up-front.” There is a lot more to the story than that though. The cost will really depend on the plan you select, and the car you are trying to cover. Make sure to shop around and get multiple quotes to get the best price. We'll show you sample pricing from reputable providers below.

What Impacts the Cost of an Extended Car Warranty?

Whether you’re buying an extended warranty or a “service plan” from a dealership when you purchase a new or used car, or buying online after you’ve already purchased a car, there are countless variables to consider which directly impact the cost of your warranty plan:

• How long do you want to be covered?
• How old is your car?
• What’s the current odometer reading?
• What level of deductible are you willing to pay?
• Are you going to pay monthly, or up-front?

On top of that, service plan costs vary significantly between brands. The same coverage on a brand new Honda Accord at the time of purchase is going to be a lot cheaper than on a BMW 7 Series with 98,000 miles.

Finally, depending on the service contract provider, they may offer anywhere from three to more than ten levels of coverage for you to choose from, ranging from very basic coverage of just the engine and transmission, all the way up to a “Platinum” level that covers everything but tires and wiper blades.

For the purposes of this article, we’re going to focus on the warranties that most consumers actually buy: The plans that will cover you in the event of a likely failure of the major components that will stop your vehicle from getting to work.

What Do Extended Warranty Plans Cover?

Every vendor of these service plans calls their mid-level plan something different, but in general, they all cover the same components:

• Air conditioning components
• Cooling systems
• Drive axles
• Transfer cases or center differentials
• Electrical components
• Fuel systems
• Seals and gaskets
• Transmissions
• Turbochargers and superchargers
• Engines
• Brakes (components of the hydraulic system only, not wear items like pads, rotors, drums or shoes)
• Front and rear suspension components

Less expensive plans exist, but generally only cover:

• Drive axles
• Transfer cases or center differentials
• Seals and gaskets
• Transmissions
• Turbochargers and superchargers
• Engines

More expensive plans also exist that cover all of the components in the “mid-level” plans, but add “exclusionary coverage.” Exclusionary coverage is a list of every single component the service plan covers. These are exhaustive lists that cover literally thousands of components. If the component isn’t on the list, it’s not covered, which might cause some confusion down the road.

What’s the Cost of an Extended Warranty (By Provider)?

Let’s take a look at some of these specific plans and what their basic costs are:

If our chart tells you anything, it’s that you need to call a few extended warranty companies and ask them what they offer for your specific vehicle, over a specific term. The variations based on the parameters make the price vary wildly. Unless you buy from Car Shield, who basically told us over the phone that they charge $130 per month for pretty much every plan for any vehicle they opt to cover. They also explained that the plan levels don’t change the cost much, so you may as well get the good one. It would be nice if the companies that offer these products had a consistent set of coverages for all vehicles, but it just doesn’t work that way. The best analogy we can think of is the question, “How much will a house cost me?”

Endurance Extended Warranty

You’ve probably seen Endurance advertised because they spend money on every medium this side of skywriting to get you to buy a vehicle warranty. The plan most people end up choosing from Endurance is Superior Coverage. Looking at the contract from Endurance, Superior Coverage is the mid-level plan that covers components including:

• Air conditioning components
• Cooling systems
• Drive axles
• Transfer cases or center differentials
• Electrical components
• Fuel systems
• Seals and gaskets
• Steering
• Transmissions
• Turbochargers and superchargers
• Engines
• Brakes
• Front and rear suspension components

Endurance flat out tells you on its website that they won’t give you a price without you calling for a quote. However, we’ve seen reported costs of a Superior plan -- providing four years and 100,000 miles of coverage -- on a car like a Honda Accord run in the $1,200 range. However, the same coverage for a BMW 7-Series can be almost $4,000. See our full review of Endurance here.

Toco Warranty

Toco Warranty is a company new to the scene with good BBB ratings. This brand has a reputation for offering plans with no downpayment and monthly billing. Instead of naming its plan levels on precious metals, Toco opted for colors and Blue is the best.

Our research indicates that Toco warranties have prices ranging from about $1,400 to well over $3,000. Your make and model, the vehicle’s age and condition, and the coverage that you select will be the determining factors with regard to your premium. See our full review of Toco Warranty here.

CARCHEX

CARCHEX is another broker of extended warranties. In their “Gold” level of coverage -- essentially the same level of coverage as both the Endurance and the autopom! plans -- they have four different plans, managed by four different companies. Interestingly, one of those companies is Royal Administration, the same company that manages one of autopom!’s plans. The major differences in all of these plans are the terms, which range from 5 years to 10 years. Clearly, the 10 year plans are going to be the most expensive, all other things being equal.

We dug around a lot of internet forums for costs on these plans and found one interesting quote from the owner of a four-year-old BMW 328i with 25,000 miles. The CARCHEX quote this owner received for a Gold plan for another three years and up to 70,000 miles was “around $3,000.”

Granted, a lot more people are driving Toyota RAV4s and Honda CRVs these days, and they have a good reputation for reliability, plus less expensive parts than a BMW might, but that warranty is still going to run in the $2,000 range, easily. See our full review of CARCHEX here.

Select Auto Protect

Select Auto Protect is a young company, but they've been making a name for themselves with good ratings and positive customer reviews. Select Auto features three possible plans for their policyholders, ranging in price from $1,000 to $3,000. The company is available in all 50 states and does not have a limit on the number of claims their customers can submit. There is also no age limit for vehicle coverage, as long as your car is in good working condition at the time you purchase your policy. See our full review of Select Auto Protect here.

autopom!

autopom! is really an extended warranty broker, not necessarily a provider. autopom! has a ridiculous 20 different plans available, so determining a cost for these plans can be a fool’s errand. Just within their “Powertrain Plus” category -- which covers all of the same components that Endurance’s “Superior” coverage contains, there are four different plans. The four plans are actually managed by Royal Administration, Enterprise Financial Group and Mercury Insurance Group. They offer a California-only plan that may offer specific benefits for owners in the Golden State.

It’s hard to pin down a cost without getting a quote from Autopom, but in general, look for a mid-level, limited term warranty on something like a reliable Lexus RX350 to run in the $1,500 range. See our full review of autopom! here.

Olive

Olive is a mechanical breakdown coverage broker. The company is not the administrator of the plans you buy from them. Olive is part of Repair Ventures, and Olive also offers contracts under the name TriStar.

In our research, we found a lot to like about Olive. The company has great BBB and review scores and a 'no robocall' promise. One interesting aspect of Olive by comparison to the company’s peers is that there is no waiting period to begin your coverage.

Olive offers three levels of coverage called Powertrain, Powertrain Plus,and Complete Care. Using monthly prices, Olive seems like a bargain. In our research, we found pricing examples from as low as $23 for the basic plan, to as high as $107 for the top plan. Be certain that you check out your own price based on your vehicle and the company’s terms. See our full review of Olive here.

ForeverCar

If there is one company that does not seem to line up with the majority of those offering extended warranties, it’s ForeverCar. This provider of breakdown coverage wants to be more like your personal assistant than a company you call when it’s all gone to heck.

ForeverCar has three plans and an additional plan you can add to its top plan to even pay for certain wear items and maintenance needs. The plans are named Silver, Gold, Platinum, and Platinum Plus. We found many positive reviews of ForeverCar and the company has earned an A+ rating from BBB.

The prices for this company’s plans don’t line up perfectly with other companies’. For example, there is an unusually large $250 deductible unless you opt out and then pay more monthly. And the plans have a relatively short duration. We found prices for ForeverCar plans ranging from $53 to $89 per month. See our full review of ForeverCar here.

Is an Extended Car Warranty Worth the Money?

Nope. Extended car warranty plans are usually not worth the money for the majority of those who purchase them. Studies by consumer groups have found that most plan owners say they pay more for the premium than they get back in covered repairs. But it’s not always about the bottom line. Many folks who have a tough time budgeting for a savings account to cover big repair bills buy an extended warranty so they can sleep at night. Only you can say if that has enough value to pay $3K for a warranty on your old RAV4.

There is another issue many publications gloss over when they cover the topic of extended warranties. In order for your repair to be covered, the companies that offer these plans make it hard on you if you don’t have every maintenance receipt from the car’s first 6-month oil change visit - in your hand. Do you have all of the car’s maintenance records? Including those from before you owned it if it was used when you got it? Are they all up to date and in your possession? If not, you shouldn’t bother. If your car maker recommended a transmission fluid change every 30K miles and you didn’t do them, or can’t prove they were done before you were the owner, and then the transmission fails at 90K miles, why should your warranty plan pay for the repair?

Another consideration is the condition of the car when you sign up. If your car has had a leaking seal for a while and your plan is to sign up, pay $90 for a few months and they have the engine pulled and rebuilt, forget it. These companies are savvy and have ways to prevent you from committing fraud, which is the scenario we just described. These plans are intended to cover future repairs on a car that is not presently in need of any work.

There are some success stories and you can read them in reviews. “My car needed a big repair and I had no trouble getting the car fixed and the full cost covered by my extended warranty plan.” These reviews are out there. Someplace. But it is buried under a mountain of reviews that say, “I paid for this coverage for years and when I needed it I was not covered.” One of the biggest reasons those billions of “not covered” reviews exist is that folks don’t buy the top-teir plan. When the fitzer valve craps out, they take the car to the shop expecting the repair to be paid for by the plan. But the plan’s contract says in the exclusions section, “No way, no how, will this plan ever pay for a fitzer valve repair.” So, your plan is only as good as what it covers when you need it.

There are some brands and models out there just begging for an extended warranty. These include models made by luxury brands with a reputation for poor quality, crazy repair costs, and a badge that puts you in front at the valet stand. These basket cases of bad engineering and poor workmanship would seem like a slam dunk to buy an extended warranty for. Which is exactly why many of the plans we researched simply exclude them. Insurance companies are not in the business of making bad bets.

Read our full recommendations for the Best Extended Warranty Companies here.