Extended Car Warranty – The Good and Bad

Extended Car Warranty - The Good and Bad

The pros and cons of an extended warranty for your car

When shopping for a new car, be prepared for the dealer or seller to ask if you’d like an extended warranty. Think of this offer as essentially prepaying for maintenance down the road. An extended warranty is just that — it covers repairs to the car after the original warranty ends. It sounds like a good idea, right? But extended warranties aren’t for everyone. Here are the pros and cons.


  • Multiple Options. You can customize an extended warranty so it fits your budget and driving habits.

  • Coverage. When your car needs regular maintenance or repairs, you’re covered. There is a deductible, but the out-of-pocket cost is reduced.

  • Longevity. An extended warranty can help you keep your car longer. Typically, repairs that grow more and more expensive over time are the driving force (no pun intended) behind buying a new car. However, if you have an extended warranty, those costs are kept lower for longer, allowing you to delay buying a new car.


  • Costs. Extended warranties go for about $750 per year on average. If your car has a history of being reliable, the warranty cost might be more than just paying out of pocket for maintenance needs.

  • Not Used. You can’t predict the future, so there’s a chance you buy the extended warranty and then never even use it.

  • Uncovered repairs. One big caveat of extended warranties is that they don’t cover every type of repair needed. There’s a lot of fine print with warranties, so be sure to read all the paperwork thoroughly. You don’t want to pay for a warranty that doesn’t cover things you might want to get fixed.

Chris O'Shea