Should You Buy An Extended Warranty For Your Car, An Auto Mechanics View

It is the same old story.

This car is a great car that will never break. But you need to buy a warranty “just in case”

If you have ever bought a car, you know the pitch. You have sat in the finance mangers office with they tell you how much you “need” that warranty.

Something that you guys may not know about me is, I have said those words. Years before I was an auto mechanic, I sold cars. That is right, I was a used car salesman. I spent about a year selling cars at Carmax. It was my very first job in the auto industry. Not to toot my own horn, but I was pretty dang good at it. Much like my job now, I was always ALL about the customer. I will save that for another post. Lets talk extended warranties.

If you listen to Clark Howard, he will tell you “Never buy an extended warranty”. He says that on everything except a car. So should you buy an extended warranty? Lets look at some pros and cons.

Here are some good reasons to buy that extended warranty

  • Fixing cars can be very expensive
    Not only the cost of labor, but the cost of parts can be really high.
  • Cars are not getting easier to work on.
    It takes thousands of dollars of tools and diagnostic equipment to properly work on cars
  • Vehicles have more electronics than ever
    Most modern cars have 20+ modules. That can add big dollars to a repair
  • It can reduce the worry of owning a car
    Do we really need more to worry about? I know I don’t

Warranties are not all hearts and flowers

  • It can cost over $2000.
    That is a lot of money to add to the cost of a car
  • You might not ever use it
    There is a chance that your car will never ever break
  • Your repair might not be covered.
    No warranty covers everything. NONE OF THEM! I don’t care what the sales person says
  • There is fine print
    It is a contract, there will be fine print!
  • Like other things, may people think they are a rip off.
    There is a possibility.

Considering whether to buy a warranty is a big decision. Most people do not consider it until they are having to say yes or no. If I were buying a car today, I would most likely buy a warranty. Yeah, I can do all the work my self, but I like not having to buy parts. Here are the things I would consider when thinking about an extended warranty.

  • Do I have the money to make a $500-$1000 repair. I might not want to make the repair, but cars don’t break when it is convenient.
  • What does it cover? Buying an “exclusion policy” is the ONLY way to go. That is a policy that will tell you what they DO NOT cover. If it is not listed, it will be covered.
  • Does it cover consequential damage? Lets say the power steering pump goes out. This causes damage to the power steering rack. Will the warranty cover both parts?
  • Does it cover electronics. If not, PASS! No point in buying a warranty that does not cover electronics.
  • Is there a deductible? Many warranties have a $50-$100 deductible That is not a deal breaker for me. Just something to be aware of.
  • Where can I get the car serviced. Some warranties only allow you to get your car serviced at certain places. Again, not a deal breaker, but something to consider.
  • Will I have to pay out of pocket for the repair? The good companies will pay the repair place directly. No need for customers to pay, then hope to be reimbursed.

A better way to think of a warranty is like an insurance policy. Something to have in your pocket in case something goes wrong. I usually ask people if they are willing to put an extra $30 away for cars repairs. If the answer is no, then buy the warranty.

If you have any extended warranty questions, feel free to ask me. I have been dealing with them since 1999.

Do you enjoy the site, have you been able to learn something from reading the post, and comments here? It would mean a ton to me if you would consider sharing it. Really, it means a lot to me. 😀

18 replies
  1. Jeremy (in pgh)
    Jeremy (in pgh) says:

    we bought one for my wife’s outback. I think it was about $1200 added to the cost of the car when we did. it had a list of things not covered, and I think we used it once in the 7 years of factory and entended warranty. for us, it wasn’t really worth it, but had we not had it, we’d have probably needed it more. I’m not remorseful for buying it. at this point I’d had my jetta 4 years and it should have qualified for the lemon law but just squeaked out of the time limit for pennsylvania, so my 4yo car had already cost me a couple thousand in repairs (stupid, stupid, stupid 2-yr jetta warranty!). my mechanic at my purchase-dealer was great and tried to help me out, but his service advisor was a douchebag and made me deal with customer care myself but wouldn’t back me up when they’d call him to confirm my story and wouldn’t let them deal with the mechanic when I asked them to skip the advisor as he was vacation when it all happened anyway. they never got another dime of my business…

    but from all that, we decided it was a good gamble on the outback. in my mind, extended warranties should only go on mileage, not ages of vehicles, but I realize that’s how they out from some of the warranty responsibility and stay uber-profitable. our 04 outback isn’t even at 60k yet, and that’s including 15k in mostly-highway trips to the cottage in canada. I bet people in high-mileage (esp highway commuters) would want it the other way around. 😉

    next time around, I’ll set a savings account up to auto-draw $50 a month or so for planned repairs and whatnot.

  2. Charles
    Charles says:

    I would always recommend people do the auto-draw thing when they didn’t buy a warranty. I have seen warranties pay for them selves in 1 repair.

  3. P. Frazier
    P. Frazier says:

    Hey Humble Mechanic. I read your article on extended car warranties, however, You still left me with questions! I have a 2006 Pontiac, 96,000 miles on it. I want tio get an extended warrqanty, however, I am leary of out-of-town warranties. Would it be better for me to purchase an extended warranty with the car dealer I purchased my car from here in town? And it is a GMC warranty? Thanks

    • Charles
      Charles says:

      @P. You SHOULD be leery of those commercial or mailers that you see. Most will be over priced policies and cover little to nothing.

      Here is the issue you will run into. It can be tough to get a good warranty after you own the car. Dealer can sell warranties when ever they want, but there are age/mileage restrictions.

      I would talk to the dealer and see how much they cost. Then I would go to the service department and see how the advisors like dealing with them. The warranty that my dealer sells is written by CNA. They are AWESOME to deal with.

  4. Warrantech
    Warrantech says:

    Extended warranty according to Warrantech is one method of protecting your investment that you have made for any high end product such as a vehicle or electronics which may demand repair and replacement of parts in the long run. It’s kind of like a health insurance for your product as you pay in advance for any future repairs and problems that may arise in the vehicle. Thus one is saved from the pain of shelling out a large sum of money for repairs and maintenance at a later stage.

  5. Aileen
    Aileen says:

    I have a 2011 Mercedes GLK350 and I’m right at the end of the Mercedes warranty. (49,800 miles). I drive it about 20,000 per year.

    I’m trying to decide what to do for an extended warranty. I purchased the car used through CarMax, but didn’t buy the extended warranty through them at the time of purchase. (kicking myself now) Because the car was a fleet car Mercedes won’t offer me their extended warranty. My choices are a 2 or 3 year 100k mile through Zurich (About $5,000) or Unlimited mile 3 or 4 year through Chrysler (about $9,000). I am generally a keep the car forever kind of person, but I’ve been advised to get rid of the car just before the 100k because the value drops dramatically. I have no idea how to determine what the best option is. Help!

  6. Mark Werwath
    Mark Werwath says:

    I purchased an extended warranty from Car Max with my used 2007 Murano. Best decision I ever made. The warranty paid for itself within 18 months and well beyond that in the 24 months that followed. On the other hand, only one of the 3 warranted Toyotas I have owned ever needed it, and none of them justified the added warranty expense. I would say if you have a CVT, then it is definitely worth it. Today’s cars are insanely expensive to own and maintain. get the extended warranty!

    FRANK BAILEY says:

    I bought a GM Certified, 2013 Equinox with 49,000 with lots of electronics. It came with a 12,000 “bumper to bumper” warranty which I will use up in 6 months, and a 100,000 mile basic warranty which I will use up in two years. I purchased a bumper to bumper warranty that goes to 149,000 or five years from the date of purchase. It cost me $2,000. Was I smart or dumb?

  8. Chase
    Chase says:

    I’m a Finance Manager at a dealership of a major import brand. This is absolutely spot on. It’s October 1, 2021 as I type this. EXCLUSIONARY EXCLUSIONARY EXCLUSIONARY. I won’t even mention STATED coverage to a customer unless it’s all it qualifies for due to age and/or mileage. A 1k repair is nothing to blow past anymore. Just saw a repair order for a starter replacement performed on a 2015 mid size sedan that was 950.00. Parts are starting to pass labor in repair cost. An extended service contract (extended warranties don’t exist) could be the best money you spend, many times are, or, the worst money you didn’t. Remember, manufacturers didn’t pretty much all arrive at the same terms and verbiage by coincidence. They’ve done their research and know statistically after about 3yrs or 35k miles electronics start having issues. I would say, if you can’t afford to pay for the coverage, you probably can’t afford to not be covered these days.


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