The Best Extended Car Warranty
How We Found the Best
40 Providers Evaluated
2 Auto Experts Interviewed
2 Top Picks
The Best Extended Car Warranty
The best extended car warranty will provide a straightforward claims and repair process in the case of a breakdown as well as excellent customer service. To find our top pick, we consulted 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 Warranty
We started our review by rounding up a list of all 40 extended car warranty providers offering coverage in at least 45 states.
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.
Laws vary by stateIt is illegal to sell extended car warranties directly to consumers in the state of California, so Californians will have to buy a contract through a dealership.
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: ones 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 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 that, if your provider goes under, the insurer will step in to pay your claim, meaning better protection for your car and wallet. It also adds a few additional benefits. According to the Federal Trade Commission, insurance regulations provide extra protection by often 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 their 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.
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 that 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. Now that we were 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 their 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 their insurer is buried in the terms and conditions on the second-to-last page.
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, though. 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 was 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.
Financial strength is under review
Wesco Insurance is currently under review with A.M. Best. According to A.M. Best, they still have at least $2 billion in financial surplus which means they will be able to pay off claims. But the implications of a review are negative and their financial strength ratings may take a hit. In other words, when A.M. Best finishes its review, it’s likely Endurance’s score will be even lower.
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 likely to fall lower, pending a review). EasyCare’s superior rating ensures that it can back large claims and outlive the length of your warranty. If you meet EasyCare’s strict eligibility requirements, you can rest assured that 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 works 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. 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 over 24,000 miles, you’re out of luck. On our call with EasyCare we learned that the company does not offer coverage for cars older than two years or over 24,000 miles. This stood in sharp 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 warranties are often marked up from wholesale so that the dealer can make a profit. In order 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 samples 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.
Buy early for new cars
Most new cars already come with a warranty that lasts 3 years or up to 36,000 miles. 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 Warranty FAQs
Can I cancel an extended warranty?
Cancelling your extended warranty is always an option. If you find the cost is too high, or your repairs tend to call on the exclusion list, or you simply find you don’t need it — you can cancel. The money you get back after cancelling will depend on the contract, it may be a pro-rated refund, a partial refund, or a full refund if you cancel within 30 days.
Can I get an extended warranty on a used car?
Yes, you can. But it can be complicated depending on the condition of the preowned vehicle. It typically will cost more to purchase a warranty on a used car, and you could end up spending more on the warranty than any repair costs. Depending on your vehicle, you’ll have to weigh how often you’re likely to need repairs against the quoted cost of your warranty.
What about manufacturer-backed warranties?
Manufacturer-backed warranties ensure that your repairs include original parts and are in the hands of factory-trained technicians. Automotive expert and analyst Lauren Fix explained, “I prefer going with an extended warranty from the vehicle brand, because there are no third-party parts or services that put you at risk for low quality repairs. Third-party companies can also go bankrupt, taking your money and leaving you without coverage.”
So why does our review focus on third-party providers? Manufacturer-backed warranties are heavily dependent on the brand of your car and the dealership you go to. Rather than recommend a provider that will only serve a select few, we shifted our attention to finding the most trustworthy third-party provider that can serve most people.
“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.”