Did you know 70% of new car owners consider getting an extended warranty? This is because repair costs for cars like Porsche and BMW can be over $2,000 a year after the warranty ends. Modern cars have about 100 million lines of code, making repairs expensive after five years.

Getting an extended warranty for new car is a smart move for new owners. It helps cover the high cost of repairs, which often happen after five years. This way, you avoid unexpected expenses and are ready for the challenges of car ownership. This guide will help you better understand the best car extended warranty companies so you can make a good choice and avoid costly repairs later.

Key Takeaways

• 70% of new car owners consider an extended warranty for repair cost protection.
• Luxury vehicles can incur repair costs exceeding $2,000 annually after the factory warranty.
• 75% of car owners face unexpected repair bills within the first 10 years of ownership.
• Extended warranties typically cover major vehicle parts, including mechanical and electrical systems.
• Investing in an extended warranty can provide significant financial peace of mind.

Understanding Extended Warranties

An extended warranty is a safety net for your car, adding extra protection after the factory warranty ends. It’s vital when you think about repair costs after the original warranty expires. This usually happens after three years or 36,000 miles. Many people look for good car extended warranty companies, as these plans are great for cars that travel a lot.

What is an Extended Warranty?

An extended warranty, also known as a service contract, covers repairs not in your car’s original warranty. The best extended car warranties offer different plans. It’s key to read the details carefully. These warranties often cover important parts like the engine, transmission, and electrical systems.

Prices for these plans can start at just $12 a month. This makes them a popular choice for many car owners.

How Do Extended Warranties Work?

When you buy an extended warranty, it kicks in after the manufacturer’s warranty ends. It’s important to know what’s covered and what’s not. Some warranties don’t cover damage from accidents, normal wear, or specific exclusions.

So, it’s important to understand what each plan includes. Some providers offer flexible payment plans. This can help make your car more reliable without breaking the bank.

The Importance of Timing for an Extended Warranty for New Car

Timing is key when it comes to extended warranties. The best time to buy is when your new car is under its factory warranty. This way, you can get lower car warranty costs and more plan options. As your car gets older, prices and choices can change a lot.

When Should You Purchase an Extended Warranty?

Experts say to think about extended warranties before your factory warranty ends. You can buy an extended warranty anytime before it expires. After that, your choices are mostly third-party providers, which might not be as good as the best aftermarket warranty for cars.

As your car nears the end of its factory warranty, costs for both the warranty and repairs will likely go up.

Benefits of Buying Extended Warranty While Under Factory Warranty

Buying an extended warranty while your factory warranty is active has big benefits of extended warranties. First, you pay less upfront, saving money. If big repairs happen after the factory warranty ends, you could save a lot. One repair can cost more than your warranty.

Extended warranties also let you transfer them, which can increase your car’s value if you sell it. In a competitive market, you can find good deals on extended warranties, giving you more options.

What to Look for in an Extended Warranty

Choosing the best extended warranty for used cars involves several key factors. Knowing what’s covered is essential. Not all warranties offer the same benefits or conditions. It’s important to compare prices and understand what’s not covered to avoid surprises.

Coverage Options: What is Included?

Extended warranties vary in what they cover. You might find options for bumper-to-bumper and powertrain repairs. Here are some common areas covered:

• Engine and Transmission
• Electrical Systems
• Air Conditioning and Heating
• Suspension and Steering
• Payments for Rental Car Services

While many warranties include these, it’s vital to check the details. Some may also offer roadside assistance, adding extra value.

Comparing Car Warranty Prices and Companies

Car warranty price differs a lot. Depending on the coverage, you might pay between $1,000 and $4,000. It’s wise to compare prices from different companies.

Understanding Exclusions and Limitations

Understanding what’s not covered is critical. Different warranties have different exclusions. These might include:

• Service Location Restrictions
• Coverage Only at Certified Dealerships
• Specific Repair Exclusions Based on Vehicle Type

Knowing these exclusions helps you see the warranty’s true value. Make sure you’re okay with the terms to avoid surprises.

Pros and Cons of Getting an Extended Warranty

Consider an extended warranty for your new car. It’s important to know both the good and bad sides. Understanding these can greatly affect your car-owning experience and your budget.

Financial Benefits and Peace of Mind

An extended warranty can bring a lot of financial security. It helps you avoid big repair bills that can pop up unexpectedly. This protection gives you peace of mind, which is great during stressful times.

• Coverage for major components: Repair costs for big parts, like the engine or transmission, can be thousands of dollars. Extended warranties usually cover these costs after a deductible.
• Average repair savings: Studies show that repair bills can be too high. So, an extended warranty might be a smart choice if you need repairs.
• Reduced out-of-pocket costs: With a warranty, you know what to expect when it comes to repair costs. This makes your financial risks lower.

Potential Downsides: Cost vs. Actual Coverage

But, there are downsides to extended warranties too. The cost has gone up a lot, now averaging around $2,500, up from $1,200 in recent years. This makes people wonder if they’re worth it.

• Underutilization: About 55% of people who bought a service contract never used it. This means many might not get their money’s worth.
• Deductibles and upfront costs: Most extended warranties require a deposit and a deductible. This can increase the overall cost.
• Wait times for coverage: Coverage usually starts after a 30-day wait and certain mileage limits. This leaves you exposed at first.

Conclusion

When considering extended warranties for your new car, consider the cost and benefits. These plans can cost a lot, sometimes thousands of dollars. For example, some people pay $124 monthly plus a $1,500 upfront fee to start the warranty.

It’s important to consider the chance of big repair bills. A transmission repair can cost up to $4,000. But remember that coverage isn’t always guaranteed because of contract fine print.

Many extended warranties deny claims, even when they seem valid. They often don’t cover things like hybrid batteries, entertainment systems, seals, and brakes. Saving money for repairs might be smarter than buying an extended warranty. This is unless your car has had many problems during the manufacturer’s warranty.

Extended warranties last from 1 to 10 years and have mileage limits from 12,000 to 200,000 miles. They cover big parts like the engine, transmission, and electrical systems. On the bright side, cars with extended warranties can sell for up to 20% more.

Also, about 50% of car owners with extended warranties see lower repair costs. Nearly 60% of unexpected repairs happen after the manufacturer’s warranty ends. Extended warranties can cut repair costs by 50% compared to paying yourself.

Most plans let you use a nationwide network of repair shops for quality service. With 65% of new cars having high-tech parts that cost $1,200 to fix, an extended warranty is more appealing. Over 80% of providers make the claims process easy, giving drivers peace of mind, even if it’s not just about saving money.

About Premier Auto Protect

Premier Auto Protect is a leading name in extended car warranties. They offer custom coverage for different vehicle needs. Their Trustpilot rating of 4.7 stars shows they really care about their customers.

They have various plans for different vehicles. This includes a new plan for cars up to 75,000 miles, a Stated Component plan for 75,001 to 125,000 miles, and an Enhanced Powertrain plan for over 125,000 miles. This shows they cater to many customers.

Despite being a top choice, they have a 2.0 out of 10.0 industry reputation rating. They also need to work on being more transparent, with a 4.0 out of 10.0 rating. But, they offer great benefits like roadside assistance, rental car coverage, and trip interruption protection.

What really sets them apart is their focus on affordability and value. An extended car warranty cost is between $1,700 and $4,000. But Premier Auto Protect might offer savings. They also provide “perk” packages, like free brake repairs and oil changes. If you’re looking for a hassle-free car ownership experience, Premier Auto Protect might be the answer.

FAQ

What does an extended warranty cover for my new car?

An extended warranty covers repair costs beyond the original warranty. It may include bumper-to-bumper and powertrain protection. But, it’s important to check what’s included and what’s not.

When is the best time to purchase an extended warranty?

The best time to buy an extended warranty is when your car is under the original warranty. This way, you get better terms and prices. It also gives you more options for coverage.

How do I compare different car warranty companies?

To compare car warranty companies, look at their coverage, reputation, customer reviews, and prices. If you have a used car, find the best extended warranty for it.

Are there any downsides to buying an extended warranty?

Yes, there are downsides. The warranty cost might not be worth the repair costs. Consider putting that money into an emergency fund instead.

How much does an extended warranty typically cost?

The cost of an extended warranty varies by car warranty company and plan. Always compare prices and find the best warranty for your car.

What are some factors to consider when choosing an extended warranty?

Important factors include coverage options, exclusions, the company’s reputation, and pricing. Compare these to find the right warranty for you.

Can I purchase an extended warranty after my factory warranty expires?

Yes, you can buy an extended warranty after the factory warranty ends. But, the terms, coverage, and cost might not be as good as if you bought it earlier.

Are warranties from dealerships better than third-party options?

It depends on the dealership’s plans and third-party options. Dealerships might offer full coverage, while aftermarket options could be cheaper. Always research to find the best warranty for your car.