Extended Car Warranty Cost

  • Craig Fitzgerald
  • 7/17/2020

How much does an extended car warranty cost?

In general terms, an extended car warranty is going to cost between $800 and $1,000 that covers most major components with a $100 deductible on a new or a low-mileage used car.

However, your most difficult challenge when selecting an extended warranty is to determine the cost. Whether you’re buying an extended warranty or a “service plan” from a dealership when you purchase a new or used car, or buying online after you’ve already purchased a car, there are countless variables to consider:

  • How long do you want to be covered?
  • How old is your car?
  • What’s the current odometer reading?
  • What level of deductible are you willing to pay?

On top of that, service plan costs vary significantly between brands. The same coverage on a brand new Honda Accord at the time of purchase is going to be a lot cheaper than on a Range Rover with 98,000 miles. Finally, depending on the service contract provider, they may offer anywhere from three to more than ten levels of coverage for you to choose from, ranging from very basic coverage of just the engine and transmission, all the way up to a “Platinum” level that covers everything but tires and wiper blades.

For the purposes of this article, we’re going to focus on the warranties that most consumers actually buy: The mid-level plans that will cover you in the event of a failure of the major components that will stop your vehicle from getting to work.

What Do Extended Warranty Plans Cover?

Every vendor of these service plans calls their mid-level plan something different, but in general, they all cover the same components:

  • Air conditioning components
  • Cooling systems
  • Drive axles
  • Transfer cases or center differentials
  • Electrical components
  • Fuel systems
  • Seals and gaskets
  • Transmissions
  • Turbochargers and superchargers
  • Engines
  • Brakes (components of the hydraulic system only, not wear items like pads, rotors, drums or shoes)
  • Front and rear suspension components

Less expensive plans exist, but generally only cover:

  • Drive axles
  • Transfer cases or center differentials
  • Seals and gaskets
  • Transmissions
  • Turbochargers and superchargers
  • Engines

More expensive plans also exist that cover all of the components in the “mid-level” plans, but add “exclusionary coverage.” Exclusionary coverage is a list of every single component the service plan covers. These are exhaustive lists that cover literally thousands of components. If the component isn’t on the list, it’s not covered, which might cause some confusion down the road.

What’s the cost of a mid-level extended warranty (by provider)?

Let’s take a look at some of these specific plans and what their basic costs are:

Endurance Extended Warranty

You’ve probably seen Endurance advertised because they spend money on every medium this side of skywriting to get you to buy a warranty. The plan most people end up choosing from Endurance is Superior Coverage. Looking at the contract from Endurance, Superior Coverage is the mid-level plan that covers components including:

  • Air conditioning components
  • Cooling systems
  • Drive axles
  • Transfer cases or center differentials
  • Electrical components
  • Fuel systems
  • Seals and gaskets
  • Steering
  • Transmissions
  • Turbochargers and superchargers
  • Engines
  • Brakes
  • Front and rear suspension components

Endurance flat out tells you on its website that they won’t give you a price without you calling for a quote. However, we’ve seen reported costs of a Superior plan -- providing four years and 100,000 miles of coverage -- on a car like a Honda Accord run in the $1,200 range. However, the same coverage for a BMW 7-Series can be almost $4,000.

Autopom

Autopom is really an extended warranty broker, not necessarily a provider. Autopom has a ridiculous 20 different plans available, so determining a cost for these plans can be a fool’s errand. Just within their “Powertrain Plus” category -- which covers all of the same components that Endurance’s “Superior” coverage contains, there are four different plans. The four plans are actually managed by Royal Administration, Enterprise Financial Group and Mercury Insurance Group. They offer a California-only plan that may offer specific benefits for owners in the Golden State.

It’s hard to pin down a cost without getting a quote from Autopom, but in general, look for a warranty on something like a Lexus RX350 to run in the $1,500 range.

Carchex

Carchex is another broker of extended warranties. In their “Gold” level of coverage -- essentially the same level of coverage as both the Endurance and the Autopom plans -- they have four different plans, managed by four different companies. Interestingly, one of those companies is Royal Administration, the same company that manages one of Autopom’s plans. The major differences in all of these plans are the terms, which range from 5 years to 10 years. Clearly, the 10 year plans are going to be the most expensive, all other things being equal.

We dug around a lot of internet forums for costs on these plans and found one interesting quote from the owner of a four-year-old BMW 328i with 25,000 miles. The Carchex quote this owner received for a Gold plan for another three years and up to 70,000 miles was “around $3,000.”

Granted, a lot more people are driving Toyota RAV4s and Honda CRVs these days, and they have a good reputation for reliability, plus less expensive parts than a BMW might, but that warranty is still going to run in the $1,800 range, easily.

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FAQ

How much does an extended car warranty cost?

In general terms, an extended car warranty is going to cost between $800 and $1,000 that covers most major components with a $100 deductible on a new or a low-mileage used car.

Can I change my mind after I buy a car warranty?

Yes, you can generally change your mind if you purchase a warranty and then decide that you don’t want it. Most companies consider the first 30 days a “review period,” and will return your money and cancel the plan if you’re not satisfied with it.

Can you negotiate the price on an extended car warranty?

Yes, absolutely, but you need to understand the scenario. For example, say you’re buying an extended warranty on a brand new Jeep Renegade. It really helps to understand how a retailer and a car salesman get paid to figure out how to negotiate the price. For example, the dealer may have a lot more room to negotiate the price of the vehicle than the price of the warranty, or vice versa. The end result is the same if you’re saving money on one or the other, but it requires that you really have a clear understanding of what the costs are.

Secondly, if you’re negotiating prices between vendors, really understanding one plan versus another is paramount. If you’re negotiating Autopom’s “Royal Preferred” plan, it’s really helpful to know that one of Carchex’s “Gold” plans is administered by the same exact company -- Royal Administration Services.

Is there a governing body that monitors the practices of car warranty companies?

There used to be. It was called the Vehicle Protection Association (VPA) and it was a non-profit that claimed to represent extended warranties and establish a code of conduct by which these companies operated. It doesn’t appear to be in service anymore, though. A visit to the website returns a not found message.

What about the Better Business Bureau reviews of car warranties?

It’s not a great indicator of the performance of these companies. For example, one company we looked at had an A+ rating from the BBB, despite having almost 100 consumer complaints, mostly related to their predatory marketing practices, including the "DEMAND" and "Invoice" letters we mentioned above.

Editor's note and disclaimer: Car Talk is supported by our fans, readers and listeners. When you click on some of the links on our website, we may receive referral compensation. However, you should know that the recommendations we make are based on our independent editorial review and analyses.

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