How much does an extended auto warranty cost?
Extended warranties are used to cover repair costs for parts and systems not covered by the manufacturer’s warranty and to extend coverage after the manufacturer’s warranty expires.
The average annual cost of an extended vehicle warranty ranges from $1,500 to $3,000 a year, depending on several factors, including the type of warranty, the mileage on the vehicle, vehicle type, and other factors we’ll cover in this article. Because extended warranty prices can vary widely it’s a good idea to shop around for the best plan and price that meets your needs.
If your vehicle is older and has high miles, you can still purchase an extended warranty. One of the leading providers of extended warranties for cars up to 20-years old, is healthCar.
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What is an extended car warranty?
Extended warranties for new and used vehicles are typically offered to you by the dealership at the time of purchase. The cost of extended warranties includes coverage for repairs after the manufacturer’s warranty expires. Extended warranties on used cars are offered by auto dealerships and third parties, including credit unions.
The average monthly cost of an extended car warranty depends on the age of the car, its mileage and the parts and systems to be covered.
Car warranty prices go up as the age and miles on a vehicle increase; the older the vehicle the more you’ll likely pay. However, the coverage you choose will also affect the average monthly cost of an extended car warranty.
What does an extended car warranty cover?
The coverage packages offered to you by the dealership will depend on the age and mileage of your vehicle. When you purchase a new car, you are not obligated to purchase an extended warranty at that time. However, there is a cut-off period when the dealership will no longer offer a warranty. At that point you may go to a third-party or independent warranty company for options.
There are several types of extended warranties that are industry standards, including the Bumper-to-bumper warranty, powertrain, drivetrain warranty, to name a few.
An extended warranty is really a service contract that you’ll pay for in monthly installments. It’s insurance for the parts and systems of a vehicle. The average monthly cost of an extended car warranty will depend on the coverage you select.
Warranty service contracts group together the parts and systems so vehicle owners can choose the coverage for the parts that are most likely to fail. An example of covered parts/systems include the engine, oil pump, water pump, timing chain/belt, transmission case, differential, steering, and electrical systems including the starter and alternator, and numerous other parts.
What's not covered under an extended warranty?
Most third-party or independent warranties have coverage exclusions, as well as specific conditions and requirements for the coverage to fully apply.
These are typically not covered under an extended warranty:
- Routine maintenance such as oil changes, tune-ups, new tires, wheel alignment, tire rotation, and windshield wipers.
- Damage caused by lack of regular maintenance.
- Damage caused by accidents.
- Damage from reckless or impaired driving.
- Damage from altering or modifying the engine and other parts or systems.
- Damage caused by natural disasters and weather-related incidents, such as floods.
Factors that determine how much your extended warranty will cost
Extended warranties are not one-size-fits-all. There are coverage levels you can choose and it’s important to review what each policy provides, so you can choose the one that meets your needs. When it comes to car warranty prices and the average monthly cost of an extended car warranty, this largely depends on the coverage level you select.
Here are the primary factors that determine how much your extended warranty will cost:
Mileage. The more mileage the vehicle has the higher the cost for coverage.
Vehicle age. Older vehicles will likely have higher mileage, which will result in a higher cost for coverage.
Level of coverage. The type of coverage you choose, for example powertrain vs. drivetrain, will affect the cost. There are several typical coverage types, each covering different parts and systems:
- Bumper-to-bumper warranty. As the name implies, this warranty covers most parts located between a vehicle's front and rear bumpers, including the engine, transmission, drive axle, steering, air conditioning, fuel system, electrical, etc.
- Powertrain warranty. This warranty covers the powertrain of a vehicle, primarily the engine, transmission, fuel pump, drive axels, transfer case and other parts that power the vehicle.
- Drivetrain warranty. Like the powertrain warranty, the drivetrain warranty covers the driving parts and systems, including the transmission, driveshaft, axles, and sometimes the wheels. Coverage doesn’t typically include the engine.
- Wrap warranty. This warranty generally extends the bumper-to-bumper warranty provided by the manufacturer and includes repairs that the manufacturer warranty doesn’t.
- Corrosion warranty. While most manufacturer’s warranties cover rust and other corrosion for three years/36,000 miles, most new vehicles won’t show corrosion in that timeframe. Purchasing a corrosion warranty could be beneficial if you purchase a used car and live near the ocean or in areas where roads are salted after each snowfall.
Deductible. As with other types of insurance, the extended auto warranty cost varies based on the deductible. Generally, the higher the deductible the lower the average monthly cost of an extended car warranty. A deductible is the amount you pay before the coverage takes effect. Be sure to ask if the coverage you’re considering has a deductible.
Provider. Third party warranty providers set their own costs and contract terms. Extended warranty prices should fall between the $1,500 to 5,000 range, depending on the coverage type. You should be able to find a provider within this range.
healthCar coverage from Credit Union of Southern California offers some of the best car warranty prices on new cars, used cars, and even high -mileage cars.
Vehicle type
The extended auto warranty cost for certain trucks and cars may be higher due to the cost of the parts and parts availability. For example, the car warranty prices for electric vehicles and hybrids may cost more if they provide coverage for the battery pack.
Where to get an extended car warranty
These are the most common providers of extended warranties:
Dealer. Whether you are purchasing a new or used vehicle, if you are making the purchase at a dealership, you will be offered an extended warranty at the time of purchase. The truth is you can buy an extended warranty at any time.
Third-party. Also known as independent providers, there are companies that specialize in providing extended warranties after a vehicle has been owned for some time. Be sure to carefully research aftermarket car warranty options before you buy coverage, as some have a better reputation than others.
How to buy an extended warranty
Buying an extended warranty for your vehicle is a fairly easy process:
- Comparison shop. There are many extended warranty providers, so be sure to compare.
- Decide on the type of coverage. The coverage you choose can be largely based on your vehicle’s age and mileage.
- Read the fine print. Be sure you understand what the contract includes and excludes.
- Consider buying a warranty before the original warranty expires. Purchasing an extended warranty provides peace of mind.
- Purchase your extended warranty. Once you’re confident you have the information you need at the best value, purchase the warranty.
Are extended warranties worth it?
Before you buy an extended warranty check your vehicle’s original purchase documents to see if it is still covered by the manufacturer’s warranty. If you have an older car that is still eligible for a warranty or service contract, ask the provider to show you the contract so you can read the terms and conditions.
When shopping around, compare the types of repairs that are covered under each warranty. What is the average monthly cost of an extended car warranty for your car’s mileage? Also consider the cost of repairs you may have that year. Does the annual cost of the policy far exceed the potential cost of repairs? For example, if your car is brand new and an extended warranty will cost you $1,000 per year for three years, it’s unlikely that a new car will require $3,000 worth of repairs in just three years. Only you can decide if an extended warranty is worth it.
The good news is, you can
buy an extended warranty after you purchase your vehicle, at a reasonable price, which takes the pressure off making a decision at the dealership.
CU SoCal healthCAR coverage
If you’ve recently purchase a new or pre-owned you can protect your vehicle with
healthCar from Credit Union of Southern California. healthCar covers repairs on new cars, used cars, and even high-mileage cars. As a matter of fact, CU SoCal’s
healthCar Warranty protects vehicles up to 20 years old.
You can choose from these three coverage levels:
Platinum
Comprehensive protection. All systems and components are covered up to 100,000 miles subject to normal maintenance, eligibility, wearable, and mis-use exclusions.
Gold
Expansive named component coverage including powertrain, convenience, and comfort systems for vehicles with 100,001 to 150,000 miles.
Silver
Just the coverage you need for vehicles with over 150,000 miles. Protection for listed engine, transmission, and transfer case components to keep your high mileage vehicle on the road.
All
healthCAR protection plans include these benefits:
- Never expires. Continued coverage while enrolled in healthCAR.
- Worry-free. Your coverage adjusts automatically to cover your vehicle based on mileage at the time of breakdown.
- Alternate fuel vehicles covered. Coverage for gas, hybrid, and electric vehicles
Why savvy consumers choose CU SoCal
For over 60 years CU SoCal has been providing financial services, including mortgages, Home Equity Loans, HELOCs, car loans, personal loans, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Please give us a call today at 866.287.6225 today to schedule a no-obligation loan consultation with a CU SoCal Member Services specialist.
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