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Updated Extended Auto Warranty guide for 2023

Mitch Avatar By: Mitch | Last updated March 17, 2023

car that needs a good insurance policy


We all know that things are getting more and more expensive with every passing day, and one thing that no one wants is to wake up to an unexpected bill from their car. Some people might still be covered under warranty, while others might have to find ways to pay for this unexpected cost. But there is a way that you can reduce the chances of these bills hitting your bank account out of the blue and that is with extended auto warranties.

Extended auto warranties provide peace of mind when it comes to maintaining and servicing your automobile over its lifetime. The protection offered by these plans ensures that unexpected breakdowns won’t break the bank, saving drivers from costly repair bills. With a wide range of coverage options available, there’s sure to be something for everyone, whether you want just basic coverage or full bumper-to-bumper protection.

We have put together a number of reviews for the top extended auto warranty providers in the country, but in this article, we thought we would be doing an update on the features that could help you find the best warranty provider for your situation. We have tried our best to make it as simple as possible to get what you need to know as easily as possible.

What is an extended auto warranty?

Let's start at the basics and that is what is an extended auto warranty plan?

An extended auto warranty's definition is simple: it’s a policy that extends your basic vehicle warranty. A manufacturer’s warranty typically only covers repair or replacement of certain parts for a limited amount of time or mileage. Extended warranties offer greater coverage and protection beyond the standard factory-issued plan.

The length and scope of an extended auto warranty will vary by company and type of policy purchased, but generally speaking, they include more comprehensive coverage than what you get with the original manufacturer’s warranty. This could mean including wear-and-tear items, covering additional mechanical components not included in the original plan, providing roadside assistance, offering rental car reimbursement, and even having provisions for towing services if necessary.

So while it sounds pretty straightforward in that it is an extension of your original auto warranty plan, that isn't usually the case. Different providers have different things that they cover, and costs, deductibles, etc. It isn't usually a 1:1 copy of your original warranty, but it could be. These variables depend on your plan and who you go with. So now that we know this, let's move on to the usual types of coverage that are offered.

What are the types of coverage that extended auto warranties can provide?

So much like normal car insurance there are a couple of basic coverages that can be offered. We will go over them in a high-level review here to set the table for what we will cover later on in the article.

Collision coverage helps cover any repairs needed due to accidental damage caused by hitting another vehicle or object. This can be similar to your cars insurance but might cover things that usually aren't covered link window tints, rims, or additional add ons that might be outside of your basic policy.

Another type of coverage is roadside assistance, which provides emergency services for situations such as running out of gas or having a flat tire. This can give travelers peace of mind when traveling long distances or even just around town. Rental reimbursement is an optional feature that will reimburse you for certain costs associated with renting a car if yours is being repaired due to covered mechanical breakdowns or accidents.

Lastly, there is mechanical breakdown coverage, which covers repair costs related to normal wear-and-tear parts but excludes routine maintenance such as oil changes and filter replacements. So, just like if you buy a car brand new and the engine decides it doesn't want to work anymore some plans will cover the diagnosis and fixing of the issue.

There are also some special features that you might be able to add on to your plan, but those vary from provider to provider and can be unique to different states and car models. If you have a unique or special car you might want to look into specific aspects of coverage before signing up as without these features being included you might be unable to get total coverage.

Benefits of getting an extended auto warranty program

The benefits of extended auto warranties are pretty straight forward. You pay a rate, for protection on your car and whatever is covered in your policy. This can offer peace-of-mind knowing that their car is protected from breakdowns and costly repairs, which will get rid of the unexpected bills that can really come out of nowhere. With an extended warranty, you can enjoy long-term coverage against the cost of major repair work such as engine or transmission replacements.

The pro of this aspect is that you will be able to know each and every month if you do a monthly payment set up, how much your bill will be. It is pretty much like an insurance policy against unexpected bills. People do this with pets as well, where you get insurance so that you don't get caught off guard if something bad happens.

Like all policies and insurance, you might feel the sting if you don't use it often but as people who have really needed insurance know; you don't need a great insurance policy until you really do.

That is pretty much it as far as the pros go, so now we will move on to the cons of getting a policy.

Cons of getting an extended auto warranty policy

Extended auto warranties come with a couple of advantages, but they’re not right for everyone. Knowing what you need and researching different plans carefully can help you make sure you get exactly what fits best for whatever situation arises down the road. So let's go over the two main issues that people have with getting these types of plans.


Right off the top, we look at the cost, which is a big thing when people are trying to save money. These plans do cost money, which isn't great when you are trying to save. Sadly, it is an unknown savings when you sign up for a plan because you are trying to mitigate the cost of repairs versus the plan cost. You probably don't know if something bad is going to happen in your car, so you just have to hope it doesn't. If nothing breaks, then you have paid money for this plan that you haven't used. But, does that peace of mind warrant the price you pay? Only you will know how your situation is and what the ability to relax around your car bills is worth.

If your car has issues and it isn't covered

This is a very big issue that comes up many times, and that is when someone buys an extended auto warranty and has a car issue only to find that the issue isn't covered. This is why it is so important to go with a reputable provider, and fully understand each and every feature that you either sign up for or decline. There is nothing worse than having a policy that doesn't help you during your time of need. So you not only have to pay to fix the cars' issues, but you have been paying for a policy that is of no value to you or your car. We have heard of things popping up like engine error codes that while they sound like they are covered, the root cause actually isn't. So it is vital you understand what aspects of the car can and will be fixed if issues arise.

The first Con is something that only you will know if it is worth it, but the second one is going to be something you can ensure doesn't happen by making sure you get the right coverage plan. 

Here is a great video that has a breakdown on some more aspects to see if an extended auto warranty is right for you or not:


Eligibility Requirements for extended auto warranty plans

When it comes to extended auto warranties, eligibility requirements are key. With a vast array of rules and regulations in place, companies must ensure that all customers meet the basic criteria before they can access coverage. Like a jigsaw puzzle, each piece fits together perfectly; if one is missing, the whole picture falls apart.  It would be great if you could take your car that is just about to break, sign up for a policy, and have them fix every single thing that goes wrong with it. But like other insurance policies, there are usually requirements prior to getting your policy so we will go over the general requirements that we have seen for people when they are signing up for these warranty programs.

The primary requirement relates to vehicle eligibility, meaning the eligible car’s age and condition must match the company’s guidelines. For example, some companies will only offer plans on vehicles less than ten years old with under 150k miles. Others may accept cars up to 15 years old but require more stringent requirements around engine performance or other aspects of maintenance history.  On top of this, there are some specific makes and models that may not be available due to particular restrictions from manufacturers or insurers. It’s important to clarify these details during research so there aren’t any surprises when attempting to purchase coverage.

Beyond vehicle eligibility considerations, most companies have general age requirements for their customers as well as limits on what kinds of repairs are covered by their policies. This could include anything from oil changes to transmission replacements or parts breakdowns—depending on the plan chosen—plus additional add-on services like roadside assistance or rental car reimbursement options too. All of this should be outlined clearly in the terms and conditions document prior to signing any agreement between parties; otherwise, buyers risk being denied critical protection down the road when they need it most! There are also some companies that have restrictions on who can get policies from them, which is what we found in our USAA extended auto warranty review, so that is also something to keep in mind.

So, just like aspects of the Con sections regarding these policies, it is very important to understand what is required out of you and your car prior to signing up. Again, it would be terrible if you think you are covered, but because you didn't keep your last oil changes receipt you are forced to pay for the fixes on your own. When signing up, or even looking for a policy, it is much better to ask as many questions as possible and get everything down in writing. You never want to be in a they said this but it isn't in the policy argument when it comes to paying the repair bills. This leads us to our next section, which we have already covered but thought it is so important we will do an entire section on it.

Understanding the Policy Terms and Conditions

Fully understanding your policy terms and conditions is a crucial step in deciding whether to purchase extended auto warranties. When researching different coverage options, it’s important to compare the costs and benefits offered by each warranty provider. This includes reading through all the fine print associated with each plan. You want every plan to be as close to apples to apples in your comparisons as one might seem cheaper up front, but in the end not have the right coverage for you and cost you a lot more in the long run.

auto warranty terms of service

To get the most out of your investment, look for warranties that will give you peace of mind while protecting against mechanical breakdowns down the road. You know what you need protection from regarding car issues, or problems that might arise with your daily use so make sure your plan covers your specific needs. It never hurts to turn down a policy and keep looking for one that better suits your needs.

It’s also very important to understand how long the policy lasts and what parts are covered under the agreement. Some providers might have restrictions on mileage or time periods when certain repairs can be made. Reading these details carefully before signing up can save you a lot of headaches, and sometimes money if you ever need to make a claim.

Making smart decisions about extended auto warranties requires taking the time to read through all relevant information and do a cost comparison between different policies. By arming yourself with knowledge about policy terms and conditions, you’ll be better equipped to choose a plan that meets your needs without breaking your budget! There is usually no rush to get into a policy, so take your time and make sure you are covered for what you need.

Claims Process Overview

Now that we have gone over the basic fundamentals of what to look for in a policy, let's look at what usually happens when you need to make a claim.

First off, it’s important to keep track of all repair invoices and receipts related to any work done while owning your vehicle. As we said before, some policies require all paperwork to see if you have been keeping your car in good working condition or not. Once these documents have been gathered, they will need to be submitted with your completed claim form when filing a claim. This paperwork should include details about the issue causing the breakdown as well as information regarding the parts used or labor performed during the repair job.

The next step involves submitting this information directly to the company you signed the warranty with, so they can begin processing the claim right away. They'll review all of the materials provided before making a determination on whether or not coverage is available for those expenses incurred due to unexpected mechanical issues with your vehicle. If approved, payment will usually be sent out via check within two weeks after submission of the required documentation. This is just a general workflow of a claim process, and many companies have different ways of processing them so again make sure you fully understand the process before you start it. 

If you are ever in doubt, don't hesitate to call your providers' customer service. They are there to assist you in your time of need, and that is the whole value of the extended auto warranty. They will help you deal with the situation and ensure your car is fixed right. 

Cancellation Policies

This is an aspect that many people will overlook when signing up, and that is what happens if you cancel your policy. We all know things happen in life, and sometimes you don't keep your car for a long time. But it is very important to know the procedure if you do need to cancel the warranty.

There will likely be specific terms in place that determine how much money you’ll receive back depending on the length of coverage purchased as well as other factors. It also pays to know what type of return process each company offers; this can range from issuing a check or credit card refund to providing store credits with the provider itself. So please make sure you understand what happens if you cancel your policy, as there have been times when people expected to get money back but only get a store credit... which although not awful isn't what they thought would happen.

Also, you should be aware that many companies charge cancellation fees when you end your coverage prior to its expiration date. It’s best practice to ask about these costs upfront so that you can factor them into your decision-making process when selecting an extended auto warranty. Doing your research ahead of time can help ensure that you select the right plan for both your needs and budget!


The decision to purchase an extended auto warranty is a personal one, and it’s important for every driver to do their research as only you will know if it is worth it for your situation or not. There are many types of coverage available, as well as several cost considerations that you need to take into account before making your final choice. You should also weigh the benefits against any potential drawbacks when deciding if this type of insurance product is right for you.

At the end of the day, it is very hard for us to say that every person in the world needs an extended auto warranty plan. But, we do know that some people would have issues if big car bills popped up out of nowhere and this is one of the best ways to avoid that type of situation. So, if you do have worries, it might be a good thing to look into, as that peace of mind can come with a cost but for many people, it is worth it.