The automotive industry is full of confusing terms that you as a car owner can’t fully grasp. “Extended car warranties” are one good example and a lot of people are not sure what they are all about.
Factory warranty vs extended warranty
When you buy a new vehicle, you also receive a standard factory warranty to cover you in case of any mechanical problems that can occur along the way. This manufacturer warranty is not an insurance, because it doesn’t reimburse you in case of an accident. It only pays for the repairs in case your car breaks down and certain parts/systems need to be fixed or replaced.
Factory warranties vary in terms of coverage and length, depending on the auto maker. The standard factory warranty usually lasts for 3 years or 36,000 miles, depending on which comes first. There are, however, car makers that offer lengthier warranties, for 4, 5 or even 6 years, in the case of Volkswagen.
Extended car warranties
Although almost everyone refers to them as extended car warranties, their proper definition is vehicle service contracts (VSC). These are auto warranties that you can buy as a precautionary measure for your vehicle, after your standard manufacturer warranty expires. The reason why they are in fact vehicle service contracts, rather than extended warranties, is the fact that they are usually sold by third-parties and not by the manufacturer itself. Another reason is the fact that for them to be correctly called “extended auto warranties”, they should be included in the initial offer from the manufacturer, when you buy the vehicle, which is usually not the case.
Vehicle service contracts can be purchased not just for new cars, but for used cars as well. They can be bought anytime you want to, as long as you don’t purchase them after your car has already broken down (there is usually a 30-day waiting period with any extended car warranty anyway). Extended car warranties can vary in terms of duration and coverage, depending on the age and mileage of your car. Coverage also varies depending on the price. The more you pay, the more components will be covered by the contract.
Another thing to keep in mind is that all extended auto warranty providers have their own requirements and if you do not meet them, you might not be eligible for certain vehicle service contracts. The most common ones are restrictions in terms of car age and mileage. If, for instance, your vehicle is used and has more than 150,000 miles on the meter, you might get rejected by some companies. Do your research and choose the one that fits your specific case and needs.
Additional benefits you can get with an extended car warranty
Extended car warranties will pay for the repairs of your vehicle, if the part/s that is/are damaged is/are included in your contract. However, don’t expect your extended car warranty to pay for normal ‘wear-and-tear’ problems that appear, because you are usually covered just in case of a mechanical breakdown or defect. While it is not a general rule, many reputable VSC providers include other benefits as well, such as:
- the possibility to transfer your warranty if you decide to sell your vehicle while you are still covered by the warranty
- 24/7 roadside assistance, which includes towing services, assistance in case you run out of gas, your battery dies, locksmith services, if you forget your keys inside and more
- Rental car reimbursement: if your car needs to be taken to the repair shop to get fixed, you can rent a car and the company that sells the extended car warranty has to reimburse you for the rental car cost, for up to 5, 7 days or maybe more, depending on the company
- Trip interruption reimbursement: if your car breaks down further than a certain number of miles from home (the number may vary from company to company and will be specified in your contract), you will be reimbursed for a hotel, food and other travel related expenses
- The possibility to pay for your extended car warranty in several installments (12, 18, 24 or maybe even 36-monthly installments, depending on the company), usually monthly ones, so that you don’t have to come up with the entire amount of money all at once;
- The possibility to take your car to any licensed repair shop in the country; not every company provides this benefit, so make sure you opt for one that includes it
What are the costs associated with extended auto warranties?
You should also know that most extended car warranty providers charge you a deductible. Its value differs from provider to provider and you can be charged per repair or per visit to the repair shop. The latter is better for you.
Some companies may also ask for a down payment, but there are plenty of reputable providers out there that don’t, so try to avoid the ones that do.
The price of an extended car warranty varies, depending on its duration and coverage. You can expect to pay for it from $1,000 to several thousand dollars, depending on your car’s make, age, model, mileage, length of the warranty, components covered and so on.
Who should consider an extended car warranty the most?
While any car owner can benefit from an extended car warranty, because it gives you peace of mind in case of any mechanical issues with your vehicle, some people could use them more than others.
For instance, if you have a used car that has a high mileage, it makes sense to invest in an extended car warranty, because it is more likely for your car to run into mechanical problems than if you had a new vehicle that is fresh out of the factory.
It is also advisable for you to buy an extended car warranty if your original manufacturer’s warranty has expired. A lot of dealers try to push you into buying one when you buy your car, but you don’t have to.
Another category of car owner who can greatly benefit from an extended car warranties are those who know they have to drive a lot on a daily basis. In this case, the mileage on your car can quickly increase and you can quickly surpass the standard factory warranty which only covers you for a certain number of miles (36,000 miles is the standard).
What are some of the best extended auto warranties to consider in 2020?
Our Best Review Guide team has put in a lot of time and effort to review the most popular and reputable extended car warranty providers on the market today. We took into consideration all the factors and aspects we described to you above, carefully analyzing the pros and cons of each of these providers. Our top two winners are Autopom! and Toco Warranty and we are going to give you the highlights of both below.
Autopom! is the number 1 extended car warranty provider in our lineup and one of the most reputable vehicle protection brokers in the United States. The company has an impeccable rating from the Better Business Bureau (an A+) and it is based in California, although it offers nationwide coverage with a lot of its plans.
Autopom! is short for Automotive Peace of Mind and has several partners that it works with, who administrate all the plans they offer. Autopom!’s partners are Mercury Insurance Group, EFG Group, Royal Administration, United Car Care (UCC).
What are Autopom!’s requirements?
Autopom! offers plans that are available throughout the entire country and plans that are only available in California. The extended car warranty offered for California residents are called MBI (mechanical breakdown insurance).
In order to be eligible for Autopom!’s plans, your car can be up to 15 years old and have no more than 200,000 miles on the meter. For MBI available in California, the limit is only up to 10 years old and a maximum of 120,000 miles on the car.
Even so, we think these are some of the most generous requirements in the industry, which is one of the reasons why Autopom! is such a popular extended car warranty provider.
The deductible is charged per visit and varies depending on the plan you opt for.
There are some high-end car makes that Autopom! does not cover though, so if you want to buy extended car warranty for your Bentley, Ferrari, Rolls-Royce, Porsche, Land-Rover or Lamborghini, Autopom! can’t help you.
What are the plans offered by Autopom!?
Autopom!’s plans divide into four main categories, depending on the coverage. The 4 categories are: Powertrain Plus, Mid-Level, High-Level, Exclusionary.
The Powertrain Plus level is the most basic type of coverage you can get with Autopom!. The plans in this category only cover the essential components/systems in your vehicle: engine, transmission, transfer case, drive axle, differential assembly. You can also purchase some extra components to add to the coverage, such as air conditioning, fuel systems and more. If you do not qualify for any of the other 3 levels offered by Autopom!, this would be a good deal for you.
There are 5 plans in the Powertrain Plus category: Mercury Copper MBI (only available in California), Integrity Gold, Mercury Select, EFG Powertrain Choice, Royal Centennial. Except for the Mercury Copper plan, all the other ones are available in most states nationwide.
Mid-level is the next upgraded option offered by Autopom!. Plans in this level cover all the components included in the Powertrain Plus category and some additional ones such as the steering and braking systems.
There are 3 plans to choose from in this level: Royal Standard MBI and Mercury Silver MBI, which are only available in California and Royal Preferred, available in most states nationwide.
The High-Level category is the next one and it is more complex in coverage than the other two mentioned above. This level covers the engine, transmission, transfer case, drive axle, steering, electrical, air conditioning, braking, cooling, fuel system, seals and gaskets. You can also opt for some additional systems with some of the plans.
The High-Level category includes 5 plans: Royal Premium MBI, Mercury Gold MBI (both are available only in California) and EFG Deluxe, Royal Premium, Mercury Deluxe, with almost nationwide coverage.
The Exclusionary level includes the most comprehensive plans offered by Autopom!. It is the most expensive level of coverage you can opt for and it covers pretty much all the parts/systems in your car, unless specified otherwise in the contract.
There are 6 plans available with the Exclusionary Level: Royal Elite Plus MBI and Mercury Platinum MBI (only available in California) and Integrity Platinum, Royal Ultimate, Mercury Ultimate and EFG Ultimate (available in most states nationwide). Some of the plans in the Exclusionary category cover your vehicle for up to 7 years.
Additional benefits included with Autopom!
- 30-day money back guarantee offered with all 20 plans
- The possibility to take your car to any repair shop in the country
- 24/7 roadside assistance with all the plans
- Rental vehicle assistance with all the plans
Toco Warranty Corp is a vehicle service contract provider based in California, also renowned for its attractive offers. Toco has been on the market since 2013.
Toco also has an A+ rating from the Better Business Bureau and an overall good rating from customers from all over the United States.
Just like Autopom!, Toco also offers MBI (mechanical breakdown insurance) for California residents. Toco offers coverage in almost all states, except for Alaska, Missouri and Washington.
What are Toco’s requirements?
Toco’s requirements depend on the plan you want to opt for. The most basic plan they offer accepts vehicles that are up to 20 years old and have a maximum of 175,000 miles on the meter.
If you want to buy the most comprehensive vehicle service contract from them, your car has to be from 2015 or newer and can have a maximum of 60,000 miles on the meter.
Toco charges a $100 deductible, which can drop to only $50 if you choose to take your vehicle to one of their recommended repair shops. It is not mandatory though, only if you want to benefit from the deductible discount.
What are the plans offered by Toco?
Toco has four main plans to choose from, depending on what you want to have covered and what kind of car you want to protect. The plans are Blue, Green, Yellow and Orange, with the Blue plan being the most basic one and the Orange plan being the most complex and most expensive one.
The Blue plan is great for those who don’t qualify for one of the other plans, because their car is old and has a high mileage. This plan covers vehicles that are from 1999 or newer and have up to 175,000 miles on the meter. This plan covers the engine, transmission, drive axle (front and rear), 4 X 4 transfer case, turbo/supercharger, electrical, cooling, air conditioning and fuel system.
The Green plan is tailored for cars that are up to 10 years old and have a maximum of 100,000 miles. The coverage includes: the engine, transmission, drive axle, transfer case, turbo/supercharger, electrical, steering, air conditioning, brakes, cooling system, fuel, audio.
The Yellow plan covers cars that are from 2010 or newer and have a maximum of 100,000 miles. This plan covers the same parts as the Green plan, along with the suspension, technology package and the modern features package.
The most comprehensive plan is the Orange one, but it is also the most restrictive ones. The Orange plan only covers cars that are from 2015 or newer and have up to 60,000 miles. It covers almost your entire car, except for the carburettor, battery and battery cable, standard transmission clutch assembly, friction clutch disc and pressure plate, distributor cap and rotor, safety restraint systems (including the air bags), glass, lenses, sealed beams, light bulbs, fuses, game centers, DVD player, speakers, brake rotors and drums, all exhaust components and a few more.
Additional benefits included with Toco
- Roadside assistance with all their vehicle service contracts
- Rental car benefits
- Hotel discount and trip interruption coverage
- Fast and reliable customer service
- The possibility to take your car to any repair shop in the country