HomeCar InsuranceWhat Is an Extended Car Warranty? (2023 Guide)

What Is an Extended Car Warranty? (2023 Guide)


An extended car warranty, also known as a vehicle service contract or a vehicle protection plan, offers coverage that will take care of car repair costs after a factory warranty expires. Most factory warranties provide three years or 36,000 miles of bumper-to-bumper coverage along with five years or 60,000 miles of powertrain coverage. 

Extended auto warranty providers typically allow you to make monthly payments on your service contract, but you could also have the option to pay for it upfront. In addition, extended car warranties usually have a deductible that you’ll need to pay when it comes time to file a claim. 

Unlike auto insurance, extended warranties cover repairs from mechanical breakdowns caused by faulty workmanship or defective car parts. However, some car insurance companies offer mechanical breakdown insurance, which offers somewhat similar protection to that of an extended car warranty.

What Does an Extended Car Warranty Cover?


Extended car warranty coverage depends on factors such as your chosen provider and level of vehicle protection. You’ll typically find various exclusionary and inclusionary coverage options as you shop around for warranty plans.

Exclusionary options come closest to bumper-to-bumper coverage, and they list out the parts that aren’t under your contract. If you’re looking to cover only specific car components, your best bet might instead be an inclusionary choice like powertrain coverage. You’ll receive protection for your car’s most important parts such as the engine, transmission and drive axles.

Keep in mind that most extended car warranties don’t cover wear and tear parts like brake pads or routine maintenance services like oil changes and tire rotations.

How Does an Extended Car Warranty Work?

There’s typically a straightforward process to make use of an extended auto warranty. If you need help getting to a repair shop, take advantage of roadside assistance or towing options if they’re available. Make sure to read through your contract so that covered repairs are performed only at approved repair shops.

Once your vehicle reaches the repair facility, contact your extended warranty provider to get necessary fixes approved before any work starts. If the warranty provider denies some or all of your claim, you’ll have to pay for services out of pocket.

Denial of your claim could happen for a number of reasons, such as:

  • The breakdown involves or was caused by modifications to your vehicle.
  • You haven’t kept up with regular maintenance of your vehicle, causing the breakdown.
  • The part in need of repair is excluded from your warranty coverage.

Be sure to read the fine print in your extended warranty contract to avoid surprises on what is and isn’t covered. Once your vehicle has been fixed, either you or the repair shop will be reimbursed for the cost of repairs.



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