What does an extended warranty cover?

Deciding on the best extended car warranty can be tough. Everyone offers you the best deal, but how do you know what’s real savings and what’s just another money-sucker? Knowing your situation and your needs is the real key to getting the best deal on an extended warranty. 

For example, if you’re into car customization, you might just want that extra layer of protection. The same is probably true if you have a luxury or sports car. You might want to protect more than the engine, too. For all that, an extended warranty can come in handy.

Before we explore exactly what an extended warranty covers, let’s define what an extended warranty is. 

What an Extended Warranty is

First, you should know what an extended warranty is and what it is not. Extended warranties are not insurance coverage and they’re not fix-it-quick schemes. If you’ve ever bought a new car or a used car from a dealership, chances are that car had warranty coverage to protect you from engine failure within a certain amount of time or under a certain mileage.

An extended warranty is an extension of that warranty coverage that you can buy separately from a dealership. You can get this warranty for a car you already own or together with a used car. Sometimes these warranty plans are called extended maintenance plans as well. 

You pay for extended warranties in monthly premiums or on your car note. Depending on the type of coverage you decide on, as well as the make, model, and mileage of your vehicle, you may decide that extended warranty coverage is a good option for you. 

What an Extended Warranty Covers

Your extended warranty coverage depends mostly on what kind of car you drive, how many miles are on it, and what kind of coverage you choose. Some extended warranty companies offer a variety of coverage plans that range from bumper-to-bumper protection to special and specific coverage for things like the paint job or the electronics system.

Bumper-to-bumper coverage may not be all-inclusive, and you should read the fine print very carefully. These plans tend to be more expensive because they are designed to cover more systems in your vehicle. Many include things like power windows and seats or the stereo system.

Still, it’s not likely that everything will be covered under warranty. For example, damage due to wear and tear typically is not, even if you choose the bumper-to-bumper option.

Powertrain warranties are also available. These are much like factory warranties and cover major systems like the engine, transmission, air conditioning, etc. This is not the plan if you have a luxury or sports car. Repair costs for these vehicles will be higher and these cars are likely better covered under a bumper-to-bumper or specialty plan.

Again, most companies offer many plans, so you only have to choose which plan suits your car and your budget best. 

Other Extended Warranty Tips

Don’t forget to check the price check with your dealership or trusted mechanic. Extended warranties aren’t free, but they should save you significant money if you need to make a claim. You should check around to see what the prices are for both scheduled maintenance and common repairs so you will know what to expect.

You should also be familiar with the claims process. Some companies use a deductible on top of your monthly premium to pay for repairs. Others will pay the shop directly, while others will reimburse you for the repairs after the fact. 

Knowing what to expect before and during a claims process can be the difference in deciding your extended warranty. If you’ve already found great rates and good customer service, knowing what you’ll have to go through when you make a claim can be the deciding factor. 

Finally, remember to keep up with your scheduled maintenance whether or not you decide on an extended warranty. Keeping up with the basic maintenance will not only lengthen the life of your vehicle, but it may be a requirement for warranty coverage in the future. 

The Bottom Line

While extended warranties aren’t for everyone, they should be able to save you a significant amount of money on your car’s repairs. The more expensive or customized your car is, the more likely you will need specific extended warranty coverage that fits your needs. Check around with different providers and mechanics to get the best available deal on your extended warranty.