What is an extended car warranty?
An extended car warranty, also called a vehicle service contract, is a plan that helps pay for covered repairs after your manufacturer's factory warranty runs out. As vehicles get older and add miles, parts wear down and repair bills climb. A service contract is designed to protect you from large, unexpected costs by covering the repair of major components for a set term or mileage.
What does a vehicle service contract cover?
Coverage levels range from basic powertrain protection to comprehensive bumper to bumper plans. Most plans focus on the expensive systems that keep your vehicle running, and many include added benefits while your car is in the shop.
- Engine, transmission and drivetrain components
- Electrical systems, sensors and onboard electronics
- Air conditioning, heating and cooling systems
- Steering, suspension and braking components
- 24/7 roadside assistance and towing
- Rental car reimbursement while your vehicle is repaired
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Who should consider extended coverage?
Extended coverage is worth a look for drivers whose factory warranty has expired or is close to expiring, anyone planning to keep their vehicle for several more years, and owners of higher mileage cars where a single major repair can cost thousands. Choosing your own repair facility and paying a predictable amount can make budgeting far easier than facing a surprise repair bill all at once.
How to choose a plan
The best plan depends on your vehicle's age, mileage and how long you intend to keep it. Compare what each plan covers, the length of the term, the deductible, and the extras such as roadside assistance and rental coverage. Reading the contract details and comparing several providers side by side helps you find coverage that fits your vehicle and your budget.
Common coverage options
Powertrain coverage
Protects the core components that make your vehicle move: the engine, transmission and drive axle. It is typically the most affordable level of protection and a good fit for higher mileage vehicles.
Comprehensive (bumper to bumper) coverage
The broadest level of protection, covering most mechanical and electrical components with only a short list of exclusions. Best suited to newer vehicles or drivers who want maximum peace of mind.
Roadside assistance
Adds 24/7 help for towing, jump starts, flat tires, lockouts and fuel delivery, so a breakdown away from home is far less stressful.
Rental and trip interruption
Reimburses the cost of a rental car while your vehicle is being repaired, and can help with lodging or meals if a breakdown happens far from home.
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