Should You Buy an Extended Warranty on Your Car?


If you’ve ever owned a vehicle that was getting anywhere close to the end of the manufacturer’s warranty, you were likely bombarded with mailings trying to get you to buy an extended warranty or “vehicle service contract.”

And if you’ve bought a used car at a dealership, you’ve probably gotten a pitch to buy an extended warranty on that vehicle as well.

Are these extended warranties worth it? Money expert Clark Howard has some thoughts on them and some advice that could save you a lot of money.

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.

And those mailers are almost certainly trying to sell you a vehicle service plan — not a true warranty. The Federal Trade Commission says that an extended 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 purchasing a used car from a dealership, buying an extended warranty from the manufacturer of your vehicle may be an option.

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 warranty on that vehicle.
  • Never buy an extended auto warranty from a third party. Stick to the manufacturer’s own warranty only.

Final Thought

“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 really 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.

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