Ratings Methodology for Extended Car Warranty Companies
NerdWallet’s overall ratings for car warranty providers are weighted averages of ratings in the following categories:

  • Coverage quality: 25%.
  • Transparency and customer experience: 25%.
  • Price and perks: 25%.
  • Company reputation: 15%.
  • Consumer-friendly terms: 10%.
    • Data collection and review process
    NerdWallet’s editorial team reviews third-party companies (not car manufacturers) that provide extended car warranties for U.S. customers.

    We collect data from auto warranty providers, via their websites and direct communication as necessary. This information, combined with our specialists’ hands-on shopping research, make up our proprietary assessment process that scores each provider’s performance.

    The final output produces star ratings from poor (1 star) to excellent (5 stars). Ratings are rounded to the nearest half-star.
    Information updates
    Our writers and editors review providers on an annual basis. Throughout the year, we may maintain contact with providers and update any changes to their offerings.
    Factor weightings
    The weighting of each rating factor is based on our team’s assessment of which features are most important to consumers and which ones impact the consumer experience in the most meaningful way.
    Coverage quality
    We consider what vehicle components are covered and at what level for similar coverage types. This includes how well details are spelled out in agreements to protect consumers. For coverage quality, we also consider choice of repair facility, liability limits and types of replacement parts authorized.
    Transparency and customer experience
    We consider factors such as how easy it is to obtain a quote and sample contract or agreement. Companies that provided all of this online received the highest scores. We look at details of coverage in agreements and the ease of making a claim, such as through an app or online portal.
    Price and perks
    We gather quotes from each provider for three vehicle types — a late-model, low-mileage sedan; a late-model, low-mileage luxury sedan; and an older, higher-mileage sedan. For an equal cost comparison, we use the prices quoted and mileage/monthly term for similar coverage, to break down the actual cost per mile and month for a vehicle traveling 1,200 miles monthly. We also consider the value of extras, such as roadside assistance or rental car reimbursement.
    Company and reputation
    For this rating, our team takes into account each provider’s Better Business Bureau accreditation, rating and percentage of closed complaints. We also look at years in business, number of plan options and the availability of administrator and obligor information.
    Consumer-friendly terms
    Items in this category include waiting periods for coverage, pre-authorization requirements, transferability, money-back guarantees, cancellation terms and car owner maintenance obligations. Our team did not find major differentiating factors in this category, so it is weighted less.
    Discretionary
    An additional category is unweighted and discretionary. A provider’s rating may be adjusted up or down based on the following:

  • It has faced governmental regulatory action or major legal action in the past three years for practices harmful to consumers.
  • It offers "special feature(s)" that benefits customers and isn't offered by other warranty companies.
  • An uncommon aspect of the company, coverage or claims could result in a major, negative impact to consumers.
    • The review team
    The review team is composed of writers and editors who cover a wide range of auto industry topics and have more than 30 years of experience in finance. Each writer and editor follows NerdWallet’s strict guidelines for editorial integrity.

    The combined expertise of our team is infused into our review process to ensure thoughtful evaluation of products and services from the customer's perspective.
    Do you want to provide feedback? Contact us at [email protected].