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Extended car warranties cover repairs after included manufacturer warranties expire — at an additional cost. Although the idea of more coverage sounds nice, it can be difficult to determine whether it’s a good deal.
There isn’t an easy or quick answer about whether to buy an extended warranty. To make the best decision, it’s important to consider what is covered by certain warranties (like bumper-to-bumper and powertrain warranties), how reliable your car is and whether you can afford to pay for major repairs out of pocket.
Here are a few questions to ask yourself to decide whether or not an extended warranty is right for you.
1. Is your manufacturer’s warranty still in effect?
New car warranties typically remain in effect for at least three years or 36,000 miles. If an extended warranty’s coverage overlaps with your existing manufacturer's warranty, you could end up paying for coverage you don’t need.
All new cars come with some kind of warranty. These are the most common types:
- Bumper-to-bumper “factory” warranty: provided by the dealer and backed by the carmaker. This warranty covers repairs to most things on the vehicle between the front and rear bumpers. It doesn’t pay for routine maintenance, such as oil changes and tire rotation, nor does it cover “wear items” like brake pads and windshield wipers.
- Powertrain warranty: typically continues after the bumper-to-bumper warranty expires. A powertrain warranty covers the cost of repairs to everything that moves the car down the road: the engine, transmission and suspension.
- Additional automotive warranties include roadside assistance, rust or corrosion warranty, emissions warranty and more.
» Learn more: Car warranty types and how they work
Manufacturer’s warranties for used cars
One of the benefits of buying a certified pre-owned car from a new car dealership is that a factory warranty is usually included. Even so, the dealer will probably offer to sell you an extension to that warranty for an additional price.
Similarly, if you buy a used car that isn't certified, you can usually still purchase an extended factory warranty, assuming the car isn’t too old or doesn’t have that many miles on it. Before you buy the additional warranty, make sure you understand how much remains — if any — of the original warranty and whether it is transferable.
2. How long will you keep your car?
Generally, you should only consider adding a service contract if you intend to keep your car for longer than three years. That's because you can buy an extended warranty at any point before the included factory warranty expires, which means you can hang on to your money for three years and then buy an extended warranty if you decide you need one.
By then, you’ll have an idea of how reliable the car has been. Or you might at that point decide to trade the car in or sell it — meaning you won't need a warranty.
3. Will the cost of repairs exceed what you pay for the warranty?
If you have a reliable car that's not likely to break down, and you have enough money saved to cover the cost of a major or unexpected repair if it does, an extended warranty may not make sense.
However, car repairs can be pricey enough to disrupt your finances, and an extended warranty can make a several-thousand-dollar repair free. According to Bankrate’s 2026 Annual Emergency Savings Report, almost half of Americans don’t have access to funds to cover a $1,000 emergency expense – the cost of a failed catalytic converter or replacing a deployed airbag .
Like all “insurance,” the best case is never having to use it, meaning you’re paying for a service without a return on your investment. But having an extended warranty in place can give you the peace of mind to know that a breakdown on your four-year-old car won’t break the bank.
🤓 Nerdy Tip
“Third-party warranties” — issued by car warranty companies, auto lenders and some auto insurance companies — might cost less but might require you to pay for repairs yourself and then apply for reimbursement. Frequently asked questions
What do extended car warranties cover?
Extended car warranties, also referred to as service contracts, cover the cost of parts and repairs after initial warranties expire. For example, if your car breaks down after the bumper-to-bumper warranty expires, you'll have to pay to get it fixed. But if you bought an extended warranty, the repair might be made at no cost to you.
Extended warranties often are bundled with other types of coverage, like a free rental car and roadside assistance. Because coverage differs by dealer and comes with varying limitations regarding what they cover, it is important to carefully review what items are covered by the extended warranty before you buy it.
How much do extended car warranties cost?
Generally, extended coverage can cost between $1,000 and $4,000 — and sometimes more. Extended car warranties are sold by dealers, manufacturers and third-party providers not connected with the carmaker and come in a varying combination of mileage extensions and deductibles. The cost, length of coverage and what repairs are covered differ by dealer, car type and more.
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- 1. Bankrate. Bankrate’s 2026 Annual Emergency Savings Report Karen BennettSarah Gage. Accessed Feb 23, 2026.
