The Best Extended Car Warranties
How We Found the Best
40 Providers Evaluated
2 Auto Experts Interviewed
2 Top Picks
The Best Extended Car Warranties
The best extended car warranty will provide excellent customer service and a straightforward claims and repair process in the case of a breakdown. To find our top pick, we consulted two auto industry experts and compared 40 providers to see which had the strongest history of financial stability and customer satisfaction. In the end, we found two picks that outperformed the rest.
How We Chose the Best Extended Car Warranties
While car insurance protects you from the cost of external damage, such as an accident or hail, an extended car warranty covers the cost of mechanical breakdowns — think: fixing timing belts or transmission mounts. Extended warranty providers tend to get a bad rap, thanks to fly-by-night providers and fraudsters. But not all companies are bad news. A dependable extended car warranty provider offers coverage that can protect you from expensive repairs.
To find the best warranty, we rounded up a list of all 40 extended car warranty providers that offer coverage in at least 45 states.
Of course, it takes more than availability to be a top pick for extended warranty. So from there, we looked for a few key things:
Many companies will only sell extended warranty contracts through a dealership. Dealers offer the convenience of rolling the heavy cost of a warranty into your car loan, which makes it easier to manage payments. However, lumping your warranty into monthly payments can also mask the overall cost — a sneaky tactic that dealers can use to make a profit.
Direct providers are a convenient alternative that sell direct to consumers, meaning you can shop around and pick a company and policy you like. In addition, you’ll know from the beginning what it’s like to work with your provider and how they’re going to serve you (instead of the dealership).
When it comes to extended car warranties, there are two types of direct providers: those that sell and administer their own contracts, and brokers who sell another company’s contracts. Similar to dealers, brokers act as intermediaries between you and extended warranty providers — comparing plans from a range of partner companies on your behalf to find one that provides the coverage you need at the most affordable rate possible.
While brokers might seem convenient, many brokers contract with the same administrators, which will limit your options just like going through a dealership would. In addition, the broker isn’t the administrator of the policies it sells, which means it won’t be the one responsible for paying your claim — you’ll have to file with a completely different company that you have no experience working with. To remove any uncertainty about your coverage, we chose to only recommend providers you'd be doing business with from beginning to end.
Insurance company backing
Backing by an insurance company means if your provider goes under, the insurer will step in to pay your claim, which offers better protection for your car and wallet. It also adds a few additional benefits. According to the Federal Trade Commission, insurance regulations can provide extra protection by requiring providers to:
- Maintain an adequate financial reserve and enough assets to pay claims
- Base fees on expected claims rather than inflating fees to exceed the cost of potential repairs or services
- Seek approval from state insurance offices for premiums or contract fees
Backing by an insurance company is the most dependable way to have your claim paid — no matter what happens to the original provider or their assets. So we cut any extended car warranty providers that didn’t have an insurer backing their policies.
We also explored providers’ websites and looked to customer reviews for any reports of untrustworthy coverage. We cut any that did not live up to their claims of reliable coverage. For example, National Repair Solutions holds a D- rating by the Better Business Bureau for misleading advertising, and any reviews we could find were negative. Only three providers had the credibility to make it to our final test.
To gauge long-term reliability, and likelihood to cash out on big claims, we vetted warranty providers for their financial strength. We turned to the financial strength ratings of A.M. Best, a ratings agency that focuses on the insurance industry. A high A.M. Best rating indicates the insurer has enough financial stability to back the claims of the provider it insures. Warranty Direct’s website claims it has backing by an A-rated insurer, but our research showed that its insurer, National Service Contract Insurance Company (NSCIC), does not currently have any A.M. Best rating at all, let alone an A. Warranty Direct's insurer failed our financial strength confirmation (not to mention its misleading claim), so it was out of the running. Endurance and EasyCare delivered on their claims of financial stability. Down to two financially reliable companies, we took a look at the fine print to see what a contract with each would be like, and found that Endurance came out on top.
The 2 Best Extended Car Warranties
Why we chose it
Endurance impressed us with its transparency. Unlike many of its competitors, the company’s website provides direct links to sample contracts for each of its four plans. Each of the contracts also clearly states on the first page who the insurer will be (Wesco Insurance). Its top competitor, EasyCare, only provides sample contracts if you send them an email request, and the identity of its insurer is buried in the terms and conditions on the second-to-last page. We like that Endurance makes it easy to compare the actual ins and outs of its contracts for confident shopping. This also indicates the company isn’t trying to hide anything about its contract and is confident in the quality of its warranty.
Range of coverage
The exact Endurance plan you qualify for will depend on the make, model, and mileage of your car. If your car is fairly old, or has high mileage, you likely won’t qualify for the company’s top-level Supreme Coverage (a standard practice in the industry). But Endurance offers three other coverage plans with more lenient requirements, so most people will be able to find a plan that suits their needs. It is important to note that these other plans won’t cover as many parts as the Supreme plan. That said, they will still cover the most vital components of your car, such as the engine, transmission, and drive axle assembly, at a cheaper price.
When it comes time to file a claim for repairs, Endurance allows you to take your vehicle to your dealership or any repair facility licensed by the National Institute for Automotive Service Excellence (ASE), a professional group that certifies automotive repair mechanics and shops. This ensures your repairs will be completed by an experienced professional, and with more than 300,000 ASE-certified mechanics in the U.S. and Canada, you’ll be able to find repairs no matter where you are. Better still, every Endurance plan includes 24/7 roadside assistance and rental car benefits so you won’t be without transportation as you wait for repairs.
Points to consider
Endurance does have a few flaws. Customers have filed complaints about difficulty getting claims accepted on sites like the Better Business Bureau. While the company has many positive reviews, most only mention exceptional customer service. We noticed complaints that Endurance was refusing to cover repairs it led customers to believe were covered. Unfortunately, experiences like these are common throughout the third-party extended warranty industry — EasyCare also suffers from the same issues. However, there are also reports of Endurance customer service representatives solving such problems. In any case, we recommend thoroughly reviewing your contract on your own and with a customer service representative to make sure you understand exactly what’s covered and what isn’t.
Why we chose it
Financial strength rating
EasyCare’s insurer, Universal Underwriters Insurance Company, has a solid A+ rating from A.M. Best. An A+ is the highest rating and represents a superior ability to meet insurance obligations. By comparison, Endurance is insured by Wesco Insurance, which currently holds an A- rating, which is still considered excellent. EasyCare’s superior rating ensures it can back large claims and outlive the length of your warranty. If you meet EasyCare’s strict eligibility requirements, you can rest assured the company can back you in the long run.
Immediate and extensive coverage
While most other providers have a 30-day delay, EasyCare’s coverage starts the day after you purchase your warranty. Your car will immediately be covered, and you’ll have 30 days for a money-back guarantee. EasyCare offers four plans to choose from: PowerCare, PrimaryCare, StatedCare and TotalCare. The plans start with basic internal coverage for essentials like the engine and transmission, and work up to total bumper-to-bumper coverage. All of EasyCare’s contracts are renewable and transferable, so you’ll have the freedom to sell or keep your cars without worrying about the warranty. You can also add on additional coverage like Dent Repair and KeyCare.
Points to consider
Strict eligibility requirements
If your car is older than two years or has over 24,000 miles on it, you’re out of luck. On our call with EasyCare we learned the company does not offer coverage for cars older than two years or with over 24,000 miles. That makes a significant number of car owners ineligible, as the average car in the U.S. is more than 11 years old. The policy stands in contrast with Endurance, which provided a quote for a four-year-old car with 50,000 miles, as well as eligibility for its most thorough plan, Supreme Coverage.
Guide to Extended Car Warranties
How to choose an extended warranty
Know that they aren’t exactly warranties
An extended car warranty is not actually a warranty as defined by federal law. The more accurate term is “vehicle service contract.” The reason has to do with timing. A service contract can be arranged at any time and costs extra, whereas a warranty is included in the purchase price of the vehicle. The term “extended car warranty” is mostly used as a marketing gimmick — it makes the product sound like it’s an extension of the manufacturer’s coverage, when in fact it’s a vehicle service contract sold by a third party. However, it will still protect you from the cost of repair in the case of a mechanical breakdown.
So, just because you’re buying an “extended warranty” doesn’t mean you’re actually extending the coverage you got when you bought your car. This isn’t necessarily a bad thing: Extended warranties can actually be tailored to fill the gaps of a manufacturer’s warranty. For example, J.D. Power found that problems with technology like Bluetooth and GPS are the top reasons for declines in vehicle dependability — features manufacturer warranties won’t cover, but extended warranties might (Endurance covers in-car technology that was installed by the manufacturer in some of its policies, but not aftermarket items). Other benefits of an extended warranty include roadside assistance and even rental car reimbursement, both of which Endurance offers.
Don’t be afraid to negotiate
At most dealerships, you can negotiate the price of an extended warranty, which is often marked up from wholesale so the dealer can make a profit. To negotiate a different price, we recommend finding cheaper quotes online and using them as leverage to get a lower price when you visit the dealer.
Experts advise finding a good estimate of the dealer’s cost of the warranty and then offering to pay $100-200 dollars over it. This will generally result in a counteroffer that is much lower than the marked-up price. For more information, we advise looking at negotiating examples by professional negotiators.
Negotiating isn’t limited to dealers either. On a phone call with Endurance, our tester was given the option to negotiate a lower price with a manager (even after they were offered a discount for getting a first-time quote). We can’t vouch for every third-party provider, but trying for a lower price is always worth a shot.
Choose the right coverage for your car
There’s no one-size-fits-all best coverage option; it’s going to depend a lot on the type of car you have and its history. You’ll want to do research on common repairs for your make and model of car too. In-car technology can surprisingly cause common problems that are a pain to deal with. GPS systems, internet, Bluetooth, etc., can be pretty expensive repairs you might want covered. As another example, if you’re considering powertrain coverage, make sure it makes sense for your car — it’s likely only going to be an issue for higher-mileage used vehicles.
Buy early for new cars
Most new cars already come with a warranty that lasts 3 years or up to 36,000 miles, or better. Although it seems counterintuitive to buy coverage from an extended warranty provider while you still have the dealership’s included protection, doing so often results in lower quotes and costs. Simply put, it boils down to one rule: the older your car gets, the more expensive an extended warranty will be. So if you’re confident that you want an extended warranty for the added peace of mind, we recommend looking for a provider within the first year of ownership. The double-protection won’t add any benefits during the first 3 years of ownership, but if you plan to own your car for more than 4 to 5 years, buying early will lead to future savings.
Extended Car Warranties FAQ
“Reputable providers purchase insurance from heavily regulated insurance companies to guarantee the performance of all of their service contracts. If the provider was to go out of business or refuse to pay a claim unjustly, the customer would have recourse with the insurance company.”