Are Extended Car Warranties Worth It?

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Find out how extended warranties can help you save money.

When you purchase a new car, the price tag can quickly rise when you include the fees for your tag, taxes, dealer fees, and more. So when asked if you want an extended warranty, you may be a bit hesitant. Is an extended car warranty worth it?

The short answer is, maybe. A lot goes into determining whether or not you need an extended warranty, and understanding those factors is the best way to make an informed decision.

How do Extended Car Warranties Work?

Are Extended Car Warranties Worth It

If you’re purchasing a car, more often than not, it will come with a manufacturer’s warranty.  These warranties are different from an extended warranty in that they come directly from the manufacturer, and are limited to specific criteria.

Mileage, car year, and model can all impact the length of the factory warranty.

An extended warranty works by covering your car after the factory warranty ends.

Extended warranties can be a great way to offset the cost of repairs and maintenance, and make the long-term purchase of a car a great investment. While they have plenty of benefits, their biggest downfall is that they can be expensive in some instances.

A BMW extended warranty, for example, can be thousands of dollars in addition to whatever you may still be paying for the car. That is why it’s essential to have a full understanding of when you need one or not.

What Are the Benefits of Extended Car Warranties?

The benefits of an extended warranty include:

Cut on Repair Costs

The main reason you buy an extended warranty is to protect yourself from expensive repairs. More often than not, you will find that your car begins to break down conveniently after the manufacturer’s warranty ends. Before you start paying thousands at your local repair shop, look to your extended warranty to cover the cost.

Extended Car Life

If you know that the repairs on your car are covered, the chances that you keep your car for longer are increased. This makes the purchase of a car a smart investment altogether.

Peace of Mind

There’s nothing quite as stressful as dealing with a broken down car. Knowing that you have a Honda extended warranty, for example, can be a great way to relax and find a fast solution for your repairs.


When it comes to car warranties, there are plenty of them, and some of them even come from the manufacturer themselves. A Subaru extended warranty, for example, covers additional mileage and car years past the standard factory warranty.

While extended warranties may require a higher initial investment, if you use it often, the potential cost of repairs may offset the warranty itself.

Who Needs a Warranty?

While all car manufacturers would like you to think your car will last forever, the truth is they won’t, especially when the mileage starts to add up. That is why it’s important to do research on the car you’re buying.

Toyota, for example, has cheap parts and car models that generally last a significant amount of time. So, the idea of buying a Toyota extended warranty may not be the best.

A BMW, on the other hand, may last a good amount of time, but the replacement parts and labor can cost thousands on each repair as needed. If you plan on owning the car past the 100,000-mile mark, then it may be a good time to consider buying a BMW extended warranty.

So how do you know what to look for?

Before you buy a car, do a simple search for articles and reviews on the car, and the most common repairs they may need. Then, do a basic parts search for things like batteries, brakes, alternators, and spark plugs. These have a tendency to be the most common parts in need of replacement.

If you see that a simple repair can cost hundreds in parts alone, it may not be the best investment for you.

Where to Get an Extended Warranty

As far as extended warranties are concerned, the easiest place to get them is from the manufacturer. If not, look at where you bought the car. CarMax warranty, for example, offers gap coverage, which covers cars beyond the manufacturer date. If not, your best bet is always a Toco warranty.

Toco is an independent warranty company that offers extended coverage for all major makes and models. When the car breaks down, you make a claim, and they cover the bill directly with your licensed repair facility. They also offer roadside assistance and an easy application process with no down payments.

So if you’re considering an extended warranty, weigh the benefits against the cost. While it may not be the right choice for everyone, it’s a great choice for some.

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