SOME CARD INFO MAY BE OUTDATED
This page includes information about these cards, currently unavailable on NerdWallet. The information has been collected by NerdWallet and has not been provided or reviewed by the card issuer.
Purchasing an extended warranty for a used car can be expensive. But, paying out-of-pocket to repair failing car parts and systems can be, too.
If you don't drive a lot and the car is only a few years old, in good shape, a reliable brand or a certified pre-owned car, you may not need a used auto warranty. On the other hand, if you're on the road a lot, the car is old or not in top shape, and you think you might have trouble affording sudden repairs, it may be something to consider.
Weighing the likelihood of needing repairs against warranty costs can help you make an informed decision. Here’s what to think about when deciding whether to buy an extended warranty for your used car.
When buying a used car warranty can be worth the cost
- The car you’re buying is older, especially if it has high mileage. Older, high-mileage cars are more likely to need major repairs and benefit from warranty coverage at some point.
- You regularly drive long distances. Adding significant mileage to a car can increase the chance of something breaking, especially if the vehicle already has many miles.
- You’re going to keep the car for a while. If you’re planning to maintain ownership for several years, you may be more likely to use extended warranty coverage.
- The car brand is known to be unreliable. Some car brands have higher failure rates than others. Buying a used car model that doesn’t have strong reliability ratings could mean more repairs in your future.
- You’re not sure if you can handle unexpected repair costs. If you don’t have money for unplanned car repairs, an extended warranty could prevent you from getting behind on other bills or missing work when your car breaks down.
When a used car warranty might not be worth it
- Your car is only a few years old. “Newer” used cars may still have time left on the manufacturer’s original warranty, or be eligible for a factory warranty extension. You won’t want to pay for extended warranty coverage on parts that are still covered under the factory warranty.
- You only plan to drive the car for a short time. If you’re not keeping the car long-term (say, longer than five years), a service contract might not be worth the expense or effort of later having to cancel it.
- The car brand is known for being reliable. Some makes and models are known for going the distance without frequent repairs. Various sources identify the most reliable car brands and models.
- The car is certified pre-owned (CPO). CPO cars undergo rigorous inspections and must meet high-quality standards. They usually come with a manufacturer-backed warranty that extends the time and mileage limits of the factory warranty. Check to see what the CPO warranty covers and for how long, before buying any additional coverage.
- You have the ability to save an emergency fund for repairs instead. If you do have a bit of a financial cushion, consider whether increasing your savings to cover potential repairs makes more sense than buying a warranty you may not use.
Advertisement
Best for low cost per mile (new car)  | Best overall  | Best for 24/7 claim filing  |
Limited-Time Deal: $360 off on CarShield's website | Limited-Time Deal: $300 off on Endurance's website | on Premier Auto Protect's website |
Cost comparison $$ | Cost comparison $$$ | Cost comparison $$$ |
Online quote No | Online quote Yes | Online quote No |
Plan choices Excellent | Plan choices Excellent | Plan choices Good |
What is a used auto warranty?
In general, car warranties pay for certain repairs resulting from mechanical or electrical failures on a vehicle. In general, there are three types of warranty coverage.
- Factory warranty (leftover coverage). If the car you buy is only a few years old, it may still have some of its original manufacturer’s warranty remaining. If so, this coverage may transfer to you with the car.
- Dealer warranty. Some used car dealerships include short-term warranties at no additional cost. These warranties usually only cover basic repairs for 30 to 90 days after the vehicle’s purchase.
- Extended warranty. Also called an auto service contract, this is the type of coverage we address in this article. It’s an optional contract you purchase separately, and it’s designed to kick in after any factory coverage expires. Extended warranties are available for used and new cars.
» Learn more: Car warranty types and how they work
You can buy extended warranties from various sources, such as vehicle manufacturers, car dealers or independent companies.
The contract prices and coverage vary widely and depend on factors such as the car’s make, model, age and mileage. Other factors include the contract length, coverage level and provider you choose. In general though, the cost of a used auto warranty can range from several hundred dollars to thousands of dollars annually. You may also have to pay a deductible or any uncovered expenses when the car is repaired.
🤓 Nerdy Tip
When evaluating whether to buy an extended warranty on a used car, research the car’s history and learn as much as you can about its condition. Ask to see maintenance records. Obtain a vehicle history report. Get a used car inspection. If the car has been cared for, an extended warranty may be an expense you don’t need. Frequently asked questions
What do used car warranties cover?
Coverage varies by provider and the type of plan you choose. Many service contract providers have tiered offerings with increasing coverage and cost at each level. Before buying, read the fine print of the warranty to know specifically what it includes and excludes.
- A basic powertrain plan commonly covers major vehicle components — such as the engine, transmission and drivetrain.
- Bumper-to-bumper plans that cover nearly all car parts. These are called exclusionary, because they have only a short list of excluded items.
- Other coverages that may be included at various levels are heating and air conditioning, steering, braking, suspension, electrical and fuel systems.
- Some warranties offer add-ons, such as roadside assistance or rental car reimbursement.
- Routine maintenance, such as oil changes and tired rotations, is usually excluded. So are problems resulting from normal wear and tear, although some comprehensive warranties cover parts that wear down at an added cost.
How do used car extended warranties work?
The used car warranty provider agrees to pay for certain repairs or services as outlined in the contract. When a covered component or system fails, a car’s owner takes it to an approved repair shop or dealership.
The repair shop or dealership identifies the problem and contacts the warranty provider for authorization of the claim. After the claim is approved and repairs are completed, the warranty provider usually pays the repair shop directly. But in some cases you could be required to pay the bill upfront and be reimbursed later.
What Reddit users say about used car warranties
Reddit is an online forum where users share their thoughts in “threads” on various topics. The popular site includes plenty of discussion on financial subjects like car warranties, so we sifted through Reddit forums to get a pulse check on how users feel about whether an extended warranty is worth it for a used car. People post anonymously, so we cannot confirm their individual experiences or circumstances.
Reddit users recommend reviewing warranty contracts carefully before purchasing to ensure you understand all the exclusions and limitations. Users emphasize that you should only buy insurance that covers a loss greater than you can cover yourself. For example, if you won’t have the savings to cover a $2,000 repair during the warranty period, and the car is necessary to get you to work or your kids to school, it could be a necessary safeguard.
Many users prefer setting aside an emergency fund for repairs instead of investing those funds in an extended warranty. One user notes that, like any insurance policy, service contracts don’t feel “worth it” if you never use them, but will pay for themselves several times over if you end up cashing in the warranty for a major repair.
Explore more on
Article sources
NerdWallet writers are subject matter authorities who use primary,
trustworthy sources to inform their work, including peer-reviewed
studies, government websites, academic research and interviews with
industry experts. All content is fact-checked for accuracy, timeliness
and relevance. You can learn more about NerdWallet's high
standards for journalism by reading our
editorial guidelines.
