Should You Buy an Extended Warranty on Your Car?

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When it comes to buying a car, you might feel good when you hear about a warranty that covers the vehicle for a certain time period.

After a while, you may even get mailings inviting you to purchase an extended warranty.

But are extended warranties actually worth the money?

Money expert Clark Howard has some thoughts on them and some advice that could save you a lot of cash.

Why Extended Auto Warranties Should Make You Think Twice

“Extended car warranties and auto repair service plans can be enticing in an era when people are keeping their cars longer. But I say, most of the time they’re a waste of your money,” Clark says.

First, know that those mailers may be trying to sell you a vehicle service plan — not a true warranty. The Federal Trade Commission says that a warranty is included in the purchase price of a vehicle, while a vehicle service contract is not.

“The typical selling price on an auto repair service plan is up to $3,000,” Clark says.

“For that money, you supposedly have the peace of mind to use the service plan for repairs when your car breaks down. But guess what? The contract for that supposedly ‘bumper to bumper’ coverage has so many loopholes that it’s almost impossible to get any repairs covered!”

If your car is nearing the end of its warranty or if you’re buying a used car from a dealership, getting an extended warranty from the manufacturer (not the dealership) of your vehicle may be an option to consider.

Extended Car Warranties From Top Auto Manufacturers

Go to the specific automaker’s website to read up on their warranties and what they cover. Some major car manufacturers with warranty information online include:

Clark’s Extended Car Warranty Checklist

Here’s how Clark says you should think about extended car warranties:

  • If you can afford the cost of potential car repairs, you should never buy an extended warranty.
  • Can’t afford those possible costs? Then you may want to consider buying the vehicle manufacturer’s warranty if it gives you peace of mind. For example, if you are buying a used Chevrolet at a Chevrolet dealership, ask if you can buy Chevy’s own extended warranty on that vehicle.
  • Never buy an extended auto warranty from a third party. Stick to the manufacturer’s warranty only.

Final Thoughts

“If you buy a reliable brand and follow the maintenance schedule, you’re likely to extend the life of a car anyway and not have to incur big repair bills,” Clark says.


This is a case where an ounce of prevention is worth a pound of cure — especially when the cure could be damaging to your wallet.

If you’re ready to replace your old car rather than worrying about future repair bills, be sure to check out our comprehensive guides: How To Buy a New Car in 5 Steps and How To Buy a Used Car in 7 Steps.