What Are Extended Vehicle Service Plans? (2024) (2024)

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Extended vehicle service plans, also known as vehicle service contracts or extended warranties, are optional protection plans that cover the cost of certain repairs and parts replacements. You can purchase these plans to extend your coverage once your manufacturer’s warranty expires.

Vehicle protection plans are available through dealerships or third-party providers. If you opt for a manufacturer’s extended warranty, you’ll most likely need to purchase that coverage before your factory warranty expires. However, aftermarket vehicle warranties can be purchased at almost any time during the car’s life.

Extended vehicle service plans typically last a set number of years or miles, whichever comes first. Some providers require you to make a down payment to secure your contract, after which you’ll make monthly payments that are typically smaller. Depending on your plan, you may have to pay a deductible for any covered repairs your vehicle needs.

While factory warranties tend to cover almost all of your new vehicle’s components, extended vehicle service plans allow you to customize your coverage options. Extended auto warranties fall into two main categories: exclusionary and inclusionary.

• Exclusionary coverage plans: Also referred to as bumper-to-bumper warranties, exclusionary plans cover the vast majority of your car’s systems and components. They’re called “exclusionary” contracts because rather than listing all the parts that are covered, these contracts only list exclusions.
• Inclusionary coverage plans: Inclusionary plans, also called stated-component coverage plans, have all covered components listed in their contracts. Any part or system not mentioned isn’t under warranty protection. These plans typically come with multiple levels of coverage, allowing you to find component coverage that best suits your needs and budget.

Most stated-component warranties cover the most vital parts of your vehicle. They range from basic powertrain warranties, which cover the engine, transmission and drive axle, to more comprehensive coverage plans that can protect components like your water pump, fuel pump, air conditioning, gaskets and alternator.

Also, most extended vehicle service plans come with perks like roadside assistance, towing, trip interruption coverage and rental car reimbursem*nt. While they typically don’t cover wear-and-tear items like brake pads or regular services like oil changes and tire rotations, some companies offer packages that cover the costs of routine maintenance.

In the state of California, you’ll typically find vehicle protection plans sold in the form of mechanical breakdown insurance, or MBI. The main difference between MBI and an extended warranty or vehicle protection plan is that MBI plans are regulated by a state insurance commissioner. Extended warranties are not regulated in this way.

In our research team’s 2022 survey, half of the 1,000 respondents said they paid between $1,615 and $3,208 for their extended warranty plans. The median extended car warranty cost in the survey was $2,458.

Car warranty costs vary depending on a number of factors related to your vehicle and the provider you choose. These factors include:

• Vehicle mileage
• Vehicle year, make and model (older vehicles, sports cars and other exotic autos cost more to cover)
• Level of coverage you choose
• Number and type of high-tech components in the vehicle
• Vehicle upkeep and maintenance
• Deductible (a higher deductible means paying more out of pocket but also comes with lower monthly payments; a lower deductible leads to higher payments but less out of pocket for covered repairs)
• Provider (this is why it’s so important to compare quotes from multiple companies)

If you have a car that’s prone to mechanical breakdowns and high repair costs, an extended vehicle contract can help preserve your peace of mind. Extended warranty coverage can be especially useful if you have a used car, since high-mileage vehicles tend to need more repairs than new ones.

Most extended vehicle service plans can be transferred to new owners, which could increase the resale value of your vehicle. However, if you can afford car repairs or you plan to sell your vehicle before the factory warranty expires, you may not want to buy an extended vehicle plan.

When you’re researching reputable extended car warranty companies, we recommend keeping a few things in mind.

• Look at coverage options: Getting familiar with the levels of coverage a company offers and what each plan covers will help you narrow your options down.
• Read sample contracts: Most reputable extended warranty companies post sample contracts for their plan options online. While your contract may differ, a sample contract can give you a sense of what to expect.
• Check the age of the business: The longer a warranty company has been on the market, the more reviews — positive or negative — you’ll likely find. This will help you separate scam companies from legitimate providers.
• Make sure plans are backed by insurance: If a provider offers extended vehicle service plans that are backed by a stable insurance company, you can feel more confident that the provider can actually pay your claims.

When you shop for the best coverage, compare warranty plans from a few providers. We’ve researched the top extended car warranty companies and determined that Endurance and Carchex are among the most reliable. You can call or visit their websites to obtain free quotes.

Endurance: Best Comprehensive Coverage

With over 15 years of experience, Endurance is one of the biggest names in the auto warranty industry. The company is a direct provider, handling claims and working with repair shops without the help of another company. Endurance offers six levels of coverage ranging from its exclusionary Supreme plan to basic powertrain coverage.

Each Endurance warranty comes with a year of Endurance Elite Benefits, including perks like key fob and tire replacement that help further protect your peace of mind. Customers appreciate Endurance’s affordable rates and comprehensive coverage and rate the warranty company an average of 3.7 out of 5 stars on Trustpilot.

Learn more by reading our full Endurance Warranty Review.

Carchex: Best Industry Reputation

Carchex has been a warranty industry leader since 1999. The company offers five warranty plans, including its bumper-to-bumper Titanium plan, its stated-component Platinum plan and enhanced powertrain coverage plans. All Carchex plans are backed by trusted car insurance providers, and you can choose from a variety of payment plans.

The added benefits of choosing a Carchex plan include rental car coverage and lockout services. The company holds accreditation and an A+ rating from the Better Business Bureau, and customer reviews on Google give Carchex an average rating of 3.7 out of 5 stars.

Check out our Carchex review to discover more.

Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best extended car warranty companies. We collected data on dozens of auto warranty providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the companies that scored the most points topping the list.

Here are the factors our ratings take into account:

• Coverage (30% of total score): Companies that offer a variety of choices for warranty coverage, long contract terms and added benefits are more likely to meet consumer needs.
• Cost (30% of total score): Auto warranty companies with affordable rates and multiple deductibles scored highest in this category.
• Transparency (20% of total score): This score is based on contract transparency and the availability of a money-back guarantee.
• Reputation (10% of total score): Our research team considers availability, ratings from industry experts and years in business when conferring this score.
• Customer experience (10% of total score): Based on customer satisfaction ratings and our extensive shopper analysis, we consider the responsiveness, friendliness and helpfulness of each warranty company’s customer service team.

Our credentials:

• 500+ hours researched
• 50 companies reviewed
• 2,000+ consumers surveyed

*Data accurate at time of publication.