Most people know that accidents, even minor ones like fender benders, can result in expensive costs for car repairs and medical expenditures, which can significantly increase the total cost of car ownership. However, there are other expenses associated with vehicle ownership. Consider the case of car upkeep. The cost of car upkeep, including the replacement of worn or defective components and the correction of other problems, may add up quickly. Having a car warranty might help you save money on costly repairs and upkeep. A car dealer’s warranty is a promise to repair covered parts of your vehicle free of charge within the specified time period and number of miles driven. However, warranties differ greatly, depending on the specifics of what they cover. In this article, we will discuss cheap extended car warranty insurance and used car warranty insurance companies.
What is Car Warranty Insurance?
Car warranty insurance, often referred to as an extended warranty or vehicle service contract, is a type of insurance policy that covers the cost of specific repairs and maintenance for a vehicle after the manufacturer’s original warranty expires. While the manufacturer’s warranty typically lasts for a few years or a certain number of miles, car warranty insurance extends this coverage for an additional period, providing financial protection against unexpected mechanical breakdowns.
These policies vary widely in coverage, with some focusing on basic components like the engine and transmission, while others offer more comprehensive coverage, including electronics and interior features. Car owners pay a premium for this coverage, either upfront or in installments, and in return, the insurance company agrees to cover the cost of specified repairs or replacements, minus a deductible.
It’s important for customers to carefully review the terms and conditions of the policy, as coverage limitations, deductibles, and exclusions can vary significantly between different providers. Car warranty insurance provides peace of mind to vehicle owners, knowing that they are protected from costly repairs that can arise unexpectedly.
Types of Car Warranties
Manufacturer’s warranties and extended warranties are the two most common kinds of car insurance. However, there is some variation across contracts for each of these types. A manufacturer’s warranty may include more components and last longer than that of its competitor. Either type of warranty covers defects and manufacturing flaws as a bare minimum.
#1. Manufacturer’s Warranty
The manufacturer’s warranty ensures that your car will continue to run well for a set period of time after purchase. Furthermore, the purpose of this guarantee is to pay for repairs or replacements if your vehicle breaks down due to a defect in materials or workmanship on the part of the manufacturer. If you wreck the car, the warranty won’t pay for repairs. Nonetheless, it can help compensate for unforeseen breakdowns or malfunctions. Most brand-new automobiles have warranty coverage from the manufacturer.
Among manufacturer’s warranties, powertrain warranties and bumper-to-bumper warranties are two of the most common. The engine, driveshaft, and transmission are all part of the powertrain, and they are all covered by the warranty. There is a bumper-to-bumper warranty that covers everything, including the engine. Glass, seat covers, and tires are just some of the parts subject to regular wear and tear that are typically not covered by “bumper-to-bumper” warranties.
#2. Extended Warranty
You can’t get insurance under your extended warranty until the original warranty on your car ends, and you have to pay for it before it kicks in. You can have both, but only the manufacturer’s guarantee will be in effect at any one time. The extended warranty will take effect once the original manufacturer’s warranty has expired and will provide identical coverage. The customer gets a lot of flexibility in regard to the specifications of the product, which is one of the advantages of extended warranties. Even though OEM and aftermarket warranties might be quite different, most extended warranties will fall into one of these two categories.
What is Extended Car Warranty Insurance?
Extended car warranty insurance, also referred to as a vehicle service contract, extends the manufacturer’s standard warranty period to cover your car. If the manufacturer’s warranty is still in effect, this agreement can be added to it, but doing so will not result in any additional coverage or benefits. Since extended warranties cannot be used until the original manufacturer’s warranty has expired, they are typically purchased after the initial warranty has lapsed. There are a lot of things that this extended warranty insurance won’t cover that could happen to your car.
The two most common categories of extended warranties are manufacturer’s warranties and aftermarket warranties. The original car manufacturer offers the first. On the other hand, aftermarket car part suppliers and similar businesses sell the second. Warranties sold by third-party vendors might vary widely. However, most OEMs maintain a warranty system that is comparable to the OMB’s.
Furthermore, purchasing extended warranty insurance for your car is a sensible gamble. Problems with your car or truck caused by covered damages can be claimed under your extended warranty insurance. If approved, the warranty company will pay for the repairs. Your warranty contract will set the maximum amount we will pay out. There will be an up-front service charge associated with any claim you submit to the firm.
In addition, the goal here is to weigh the cost of a contract against the cost of repairs and the likelihood that your car will experience the types of problems that a warranty covers. A warranty could be a wise financial move if it were cost-effective. There wouldn’t be much use in buying the contract if paying cash for the repairs was cheaper than the contract.
Which Type of Extended Car Warranty is Right for You?
You can’t get an accurate price for an extended car warranty unless you decide which type of warranty you’re interested in. Depending on your anticipated needs, many coverage options are available. Getting the correct coverage for your car is much easier if you know all the kinds of extended warranty insurance options available.
#1. Bumper-to-Bumper Warranty
Since it covers everything from the bumper to the engine, a bumper-to-bumper warranty is the most expensive choice. Every component and mechanism in your car is protected. However, normal wear and tear is not included, nor is the cost of repairing it. This type of extended warranty insurance can protect you from costly repairs on almost every component of your vehicle.
#2. Powertrain Warranty
The moving parts of a car are covered under the powertrain portion of an extended warranty. Everything that generates or transfers power is included in this. This is the second-most expensive category of extended car warranties because it covers so much more than the lower tiers, but it still doesn’t cover routine maintenance or damage to your car’s exterior.
#3. Drivetrain Warranty
This extended warranty covers the transmission and power components but not the engine. Consider purchasing a powertrain warranty if your automobile has a history of engine problems. However, extended car warranty insurance for the drivetrain does cover many of the most typical problems with a car.
#4. Wrap Warranty
Wrap warranties can be used to extend the coverage of your powertrain warranty. A combination of wrap and powertrain insurance provides bumper-to-bumper protection. This could be useful if you want to keep your powertrain policy after your bumper-to-bumper car warranty expires.
What Does Extended Car Warranty Insurance Cover?
There are various levels of extended warranties that can cover different aspects of a car. Some are limited to certain vehicle components like engines and gearboxes (powertrains), while others are practically identical to the insurance of a new car’s original factory guarantee. There are many warranty service providers to choose from, each offering a range of coverage options and prices.
An extended warranty frequently covers the cost of the component and any installation work that may be necessary. Most extended warranties and car service contracts require you to pay a deductible before the service is performed.
An extended warranty may cover routine maintenance like oil changes, but this is the exception rather than the rule.
What Does an Extended Warranty Car Insurance Not Cover?
Extended warranties insurance and car service contracts, like most warranties, do not cover normal wear and tear, essentials like tires, brakes, and wiper blades, or damage from accidents or improper upkeep. Expecting coverage for a significantly modified car is unrealistic.
The service contract or extended warranty you purchase might not cover all of your car’s parts and systems. If your automobile has expensive high-tech gadgets like advanced infotainment systems, driving assistance features, and safety features, this is something you should think about.
Although extended warranty policies are not common for tires, several tire shops do provide protection in the event of certain malfunctions.
How Much Should You Spend on Extended Car Warranty Insurance?
The cost of extended car warranty insurance might range widely. There are extended car warranties available for as little as 1,000 dollars, and there are just as many that cost several thousand. The cost of your car’s extended warranty insurance depends on a number of variables, including the following:
#1. Brand and Model of Vehicle
Because of the higher expected repair costs associated with your specific vehicle’s make and model, extended warranties tend to be more expensive for luxury automobiles. Due to the high cost of maintenance and replacement parts, luxury vehicles tend to have the highest warranty premiums. Your warranty premiums will likely be lower if you drive a more typical vehicle, such as a four-door sedan.
#2. Level of Insurance
How much insurance you need for your car will determine how much you pay for the warranty. Depending on the frequency of certain car problems, you can choose from a variety of coverage levels. Keep your powertrain policy that includes transmission coverage, for instance, if your automobile has a history of transmission problems. This type of insurance is much cheaper than bumper-to-bumper, but it does not provide as much protection.
#3. Vehicle Mileage and Age
The warranty company will also take into account how old your car is. An older car or one with a lot of miles on it is more likely to break down soon. You probably won’t need to cash in on your warranty because newer cars are less likely to break down.
Adjusting your deductible can reflect your level of financial preparedness for unexpected auto maintenance. You have the option of either increasing your deductible and paying the same rate or decreasing it and paying less. You can fiddle with the number to see if your warranty is affordable.
Your extended warranty price will depend significantly on the warranty company you choose to work with. A manufacturer’s warranty, for instance, maybe more expensive than a warranty offered by a third party. In addition, your choices will widen if you choose a third-party warranty. You can shop around for the best deal on an extended auto warranty by comparing prices and plans.
How Many Miles Is an Extended Car Warranty Insurance Good For?
Depending on the specific policy and provider, extended car warranty insurance can offer a wide range of mileage coverage. Typically, extended warranties are available for a range of mileage limits, such as 60,000, 75,000, 100,000, or even 150,000 miles. Some policies may offer unlimited mileage within a certain timeframe, like up to 10 years from the vehicle’s original purchase date. The mileage limit you can obtain often depends on the age and current mileage of your vehicle at the time of purchasing the extended warranty.
It’s crucial to carefully review the terms and conditions of the extended car warranty insurance policy before purchasing to understand the mileage limitations. Additionally, some plans may offer different coverage levels based on mileage, with higher-mileage vehicles potentially having more limited coverage. It’s essential to choose a plan that suits your specific driving habits and vehicle mileage to ensure adequate protection against unexpected repair costs.
What Are Two Reasons Not to Buy an Extended Warranty?
Here are the top two reasons not to buy extended warranty insurance:
#1. The Cost of Extended Warranties Is High
In 2017, the Warranty Week newsletter estimated that the annual revenue for extended warranties was $40 billion. This is a lot of money to invest in order to safeguard newly created items, the vast majority of which will function adequately for the first portion of their useful lives (and probably for the duration of the guarantee anyway). Why pay for something that might not be necessary if you’re already going to the expense of purchasing a new dryer? Furthermore, Consumer Reports finds that paying for a repair out of pocket is usually less expensive than purchasing a warranty.
#2. Extended Warranty Coverage May Not Be Applicable in All Situations
If you’re thinking about buying an extended warranty, it’s important to read the fine print and make sure you understand exactly what it covers before you make the investment. The Federal Trade Commission (FTC) warns that some extended warranties include clauses that allow the manufacturer to refuse coverage if the product fails because of poor use or maintenance on the part of the consumer.
Car Warranty Insurance Companies
Having a car is awesome until it breaks down and needs repairing. If something goes wrong with a newer car, the manufacturer will pay for repairs under warranty, but after that, the owner is on their own. The price of materials and labor can soon pile up. Extended warranties help when even the most reliable vehicle experiences a breakdown.
Scammers and robocalls have turned public opinion against the industry of extended car warranties. In reality, many complaints about warranty companies are not about scams but about unpaid claims or poor service. The companies included here have received positive feedback from customers and industry experts alike, and they can be accessed anywhere in the United States. Here are some of the best car warranty insurance companies:
Despite its parent company’s longevity, Olive is a relatively recent addition to the field of extended auto warranties. There is no need for customers to wait on hold or speak to an actual person because they can get quotes and purchase warranty coverage online. Unlike many other companies, Olive doesn’t make prospective clients wait 30 days or more before they may start using the service. On the other hand, Olive makes it plain that accidents, theft, or vandalism are not covered, nor are failures in mechanical parts.
Olive provides Powertrain, Powertrain Plus, and Complete Care as its three protection options. Internally lubricated engine components, as well as fuel and oil delivery systems, timing and valves, and the water pump, are all protected under the Powertrain plan. Extending that protection to additional parts, like the serpentine belt tensioner, is what Powertrain Plus is all about. The thermostat, turbo/supercharger assembly (if fitted), and AVT systems are all included under the Comprehensive Maintenance package.
Using a 2015 Subaru Outback 2.5i Limited as our case study, Olive provided us with monthly rates that ranged from $87 to $158, depending on factors like mileage, deductible, etc. The price range drops to $152–$276 if the deductible is reduced to $250. The most costly coverage choice, the Complete Care plan with a $100 deductible, costs $395 monthly.
Alliances with titans of the industry like Liberty Mutual and SafeAuto facilitated ForeverCar’s rise to prominence. The company’s costs are quite competitive, and they provide three different levels of coverage in addition to perks for both new and current clients. Customers of ForeverCar get to pick their own deductible and waiting period, which can be as low as zero dollars and a few hundred miles, respectively.
In addition to a customizable deductible and waiting period, ForeverCar users also get round-the-clock roadside assistance, reimbursement for trip interruptions, and rental car coverage. Unfortunately, your preferred auto repair business might not be on the company’s approved list. However, the consumer is not completely out of luck in the event of a breakdown or difficulty, as the corporation provides roadside assistance and other perks during the waiting period.
The 2015 Subaru Outback 2.5i Limited can be insured for the first time with either the Gold or Silver package from ForeverCar. The Silver plan costs $113 per month, while the Gold plan costs $137 per month. A $250 deductible applies to both plans.
CarShield is a leading extended warranty insurance company because of its convenient payment plans, generous coverage, and freedom to select a service center. Motorcycle and all-terrain vehicle (ATV) riders can choose from a variety of coverage plans offered by the company, from the most comprehensive to the most limited. CarShield provides excellent advantages with all of its plans, like 24/7 emergency roadside assistance, travel interruption compensation, and rental car reimbursement, in addition to a wide variety of coverage options.
Customers who purchase CarShield coverage must wait at least 20 days and 500 miles before filing a claim. Because the company does not pay for repairs that should have been made beforehand, a waiting period is in force. Although the claims procedure is not perfect, the vast majority of customers have positive experiences, and the corporation makes it clear what is and is not covered. If you decide you don’t want CarShield after 30 days, canceling is simple and you’ll get a full refund.
It’s a hassle to call CarShield or take their call in order to get a quote. When a customer calls in, they must first provide their personal information to one representative before being transferred to another. In addition, it’s a stumble for a normally reliable business.
When it comes to direct warranties, Endurance is among the best insurance companies available. This means that the company does not contract out policy servicing or claim processing to third parties. This isn’t something you see very often, so it really sets Endurance apart. In addition, it provides an advantage in terms of customer service; testimonials from satisfied clients rave about the company’s responsiveness and helpfulness throughout the estimate and claims phases.
Endurance provides a range of coverage options, from the most fundamental to the most restrictive, as well as mileage-specific insurance. The business also offers a maintenance and repair plan. There are three tiers to choose from, and both included and omitted features are listed for each tier. Some plans have no waiting period and allow customers to add coverage for upgrades and technical components.
Secure, from Endurance, is a plan that can cover your 2015 Subaru Outback’s engine and other vital parts. For $129.32 a month, you can be covered for three years and 60,000 miles. As part of a campaign in the summer of 2022, Endurance will pay the $389 activation fee and $100 deductible associated with this plan in full.
When it comes to extended warranty car insurance, Carchex is a name that often comes up. It provides more granular options by providing five layers of coverage for different cars. Carchex also provides a number of optional extras and features that make its warranties more attractive and practical. The company offers a 30-day money-back guarantee and lets clients pick their own repair shops.
Carchex is a public and open business, yet it still uses the same strategies as warranty companies from decades ago. Customers can complete an online quotation request form and view some basic information, but they will need to call the company and provide some personal information in order to receive an accurate quote. So, there’s some awful news. The good news is that Carchex has some of the greatest customer service representatives in the business, and they are eager to talk about less expensive or limited plans.
Any of Carchex’s plans will cover your 2015 Subaru Outback 2.5i Limited. The most expensive option is the Platinum Plan, which is designed to be a near-exact replica of the manufacturer’s warranty.
Best Used Car Warranty Insurance
The manufacturer’s warranty insurance that comes with a brand-new car may not apply to a used car, which is a potential downside. Your search for the best used car warranty insurance to cover repairs in the case of a mechanical breakdown may begin if the manufacturer’s warranty on your vehicle has ended. Here are some of the best used car warranty policies you might want to consider:
Toco warranty insurance is the longest-lasting among the warranty companies we looked at, so it’s a good choice if you plan to keep your used car for a while. Its intentions, in fact, do not have a time limit. They continue till you reach 250,000 miles or terminate them yourself. The plans are reasonably priced and require no initial investment.
The lack of available plans is where Toco Warranty falls short. There are just four choices. There are no coverage tiers or levels to select from; rather, your mileage will decide your degree of protection. The Toco Warranty only covers four major components after 200,000 miles on the odometer. Furthermore, the waiting period for Toco Warranty coverage is the longest of the businesses we looked at, at 90 days or 1000 miles.
If you want to keep your used car for a while and won’t be driving more than 250,000 miles per year, Toco Warranty may be your best option for an extended warranty. When applying, keep in mind that if your secondhand automobile has a lot of miles on it, many parts won’t be covered.
#2. Protect My Car
An estimate from Protect My Car for a used car warranty was the easiest to obtain. Without having to speak to an agent, the website can provide you with a price once you’ve entered some basic information about your vehicle (such as the year, make, and model) and yourself. Respectable coverage across all plan options is another advantage, as is the length of contracts (up to 48 months).
However, Protect My Car charges a premium for its added convenience. All plans demand an initial payment, and the rates are slightly higher than those of the competition. In addition, the policy’s mileage coverage is capped at 100,000 miles.
#3. Concord Auto Protect
Concord Auto Protect is a reliable and cheap car warranty insurance company. We consider it the best luxury car service because of its low prices, excellent customer care reviews, and direct service model.
Also, Concord Auto Protect provides three tiers of protection, beginning with a powertrain plan and progressing to a premium plan (which is quite similar to a bumper-to-bumper policy). What each plan includes is described in greater detail below.
- Premium: Closest to a bumper-to-bumper warranty, this covers the engine, transmission, drive axles, suspension, fuel system, air conditioning, and more
- Advanced: A mid-level protection plan covering engine, transmission, and drivetrain components as well as steering, brakes, and the cooling system
- Powertrain: Similar to a typical powertrain warranty, covers the basic components that make the vehicle go
Every plan that Concord Auto Protect offers includes the following benefits:
- 24/7 breakdown service
- Complete portability
- Towing to the closest service center
- Assist with Lockouts
Cheap Car Warranty Insurance
When a car’s mechanical components suddenly fail, an extended warranty will pay for the necessary repairs. Keep in mind that while extended car warranty reductions do cover vehicle repairs, they do not always cover the entire vehicle. Car warranties typically cover only the specified components for a set period of time and mileage. A cheap extended warranty often comes in handy when you least expect it, even if it takes a while before you actually get to use it. You may rest easy knowing that you won’t have to pay out of pocket for repairs or maintenance if you purchase cheap car warranty insurance.
Compare the two prices and go with the one you think will benefit you the most. An inexpensive auto warranty may be worthwhile if you take the time to compare plans and providers in order to choose one that offers a good balance between price and coverage. Drivers may not know when or where their used car may break down due to its repair and breakdown history. Depending on the nature of the damage, the cost of repairs may also be substantial. Consequently, it is in your best interest to get cheap extended warranty insurance, as doing so will remove the financial burden associated with repairing your car.
How To Get A Good Deal On A Cheap Car Warranty Insurance
There are a number of things you can do when searching for a cheap extended car warranty to keep your costs to a minimum. Here are some tips we’ve compiled to help you save money when searching for a car warranty that meets all of your needs:
- Compare Prices From Several Firms: We advise obtaining estimates from at least three companies since this will give you a better sense of the average cost of car insurance and increase the likelihood of finding a more affordable policy.
- Buy the Service Contract From the Service Provider: Since car dealerships typically add a commission to the price, buying the warranty directly from the company will net you a better value.
- Read the Contract: The final amount of your car warranty insurance may be more than the initial estimates you were given. You can save money by reading the fine print and avoiding unpleasant surprises like hidden fees or convoluted deductible schedules.
- Inquire About Price Discounts: Depending on the provider, discounts may be available to certain patients. Veterans, law enforcement officers, the elderly, and individuals purchasing multiple car contracts are all eligible for discounts.
- Don’t Get a Loan: Don’t use interest-laden payment arrangements. The savings you’ll see quickly outweigh the higher interest rate on the loan over time. Find a service provider who offers an interest-free payment plan to avoid this situation.
Cheap Car Warranty Insurance Companies
Here are some of the most cheap options for extended car warranty insurance:
- Protect My Car
Before committing to an extended warranty, think about your vehicle’s reliability history, your budget, and your comfort level. An extended warranty isn’t always necessary if you have a reliable vehicle and the financial resources to cover unexpected maintenance. However, if your car has a track record of being unreliable, an extended warranty could protect you from having to pay a hefty repair bill out of pocket.
Take into account not only the warranty’s cost but also your comfort level with risk. While some enjoy the peace of mind that comes with extra safeguards, others would rather put that cash aside and deal with issues as they come up. It’s up to you to decide, considering your own unique set of choices and circumstances.
Frequently Asked Questions
Will CarShield replace my engine?
Yes, in the event that your car’s mechanical parts go down, CarShield will foot the bill. The engine, transmission, drive axles, water pumps, and transfer cases are all covered by most CarShield protection plans.
What does CarShield not pay for?
CarShield, like most other extended warranty insurance companies, does not pay for normal wear and tear, damage from accidents or the elements, or problems that arise from not maintaining your car.
- THE TOP BEST HOME WARRANTY PROVIDERS 2023
- Product Liability Insurance: Everything You Need to Know
- THE BEST CHEAP CAR INSURANCE IN KENTUCKY 2023
- HOW MUCH IS RV INSURANCE: 2023 Price Guide
- Best Cheap Car Insurance for College Students in 2023