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New vehicle and parts tariffs set to go into effect early next week will have a big impact on the cost of extended vehicle warranties. If your vehicle is still within its New Car Limited Warranty period, typically 3 years or 36,000 miles from the time of purchase, you are likely still eligible to buy an extended warranty contract from your brand’s manufacturer.
What Is an Extended Warranty - And What Isn’t It?
We will use the term “extended warranty” in this story because that is what 99% of Americans call these contracts. Technically, they are extended service contracts. The term is confusing because these have nothing to do with maintenance, often called “routine service.” Those are different contracts. What we are discussing here is strictly a way to extend the warranty coverage of a vehicle, not pre-paid maintenance (which we do not recommend).
Who Should I Buy an Extended Warranty From?
We do not recommend aftermarket warranties from third parties. In this story, all of our advice is strictly limited to buying authentic service contracts from the manufacturer itself. Many new car dealers offer both types. We suggest only considering ones from the automaker who builds your brand. If the contract is not created by Ford, Toyota, Chrysler (Stellantis) or an automaker like these, don’t buy one.
Where Can I Buy an Extended Warranty?
The best place to buy an extended warranty is in your bed with your laptop, tablet, or phone. Cozy up with a cup of tea and start your research. It should only take a few moments to find the automaker’s website for such plans. You can also visit a local dealer, but we strongly suggest you contact two or three area dealers and seek out the best price. Some manufacturers, for example, Ford, sell these contracts right online, which is great. You can get a baseline quote that way, and then see if you can do better. Beware of substitutes. Accept only an authorized, official automaker-offered warranty.
There Are So Many Specific Options - Which Should I Buy?
Our advice is only to consider the very top-line offerings covering the most types of failures. Look for one that replicates the “bumper-to-bumper” style warranty new cars come with. Buying anything less leaves open the possibility that a failure may not be covered, and that is a crying shame. So, just buy the “full offering” or skip it.
Most plans are sold by years of coverage and miles in total driven. For example, you may opt to buy a plan that has a total of eight years of operation from the purchase date of your new car. That would extend your bumper-to-bumper coverage for five full years. (8-3=5). If you drive fewer miles, you will spend fewer dollars. If you drive a lot of miles, your plan will cost a bit more.
Your dealer can help you understand the options. For example, some cover long-term rentals if your car is in for repairs for more than a day. We’d skip that, but you may want it. Listen and let your needs guide you.
Does My Car Qualify for an Extended Warranty?
Once your car is outside of its initial warranty period, you likely do not qualify for the type of extended warranties we are discussing here. Ask your dealer or look online for specifics. Some automakers sell warranties on “used” cars outside of the new car warranty period, but many do not.
What Do Plans Like These Cost? Are They Affordable?
Let’s use Ford as an example since Ford has a great website for its plans. We’ll select a 2023 Ford Bronco Sport as our example vehicle with 18,000 miles on the odometer. It would still be within the new vehicle warranty period. Here is what a top-tier plan, called PremiumCARE by Ford, would cost for a total of 8 years of coverage and 100,000 miles. The cost would be about $3,750, which equates to about $62 per month of full coverage.
Are These Plans Transferable? Can I Get My Money Back If I Sell Or Trade?
Every plan we have ever researched from any manufacturer allows for the plan to be transferred or canceled with a pro-rated refund. There is usually a $100 or so fee for this. Check your contract.
What About the Deductible - Is This a Scam?
These plans usually have a $100 or $200 deductible. This is normal. You are trying to protect yourself from big expenses like blown engines or transmissions that cost many thousands. If you up the deductible a bit, it lowers your premium cost.
What’s Not Covered?
Crash damage is never covered. Your vehicle insurance policy covers crash damage. Glass, tires, and consumable parts like brake pads, rotors, and windshield wipers are not included. Check your contract for details.
What About Maintenance?
You are required to maintain your vehicle according to the owner's manual. This is always a good policy, regardless of whether you own a service contract. You are nuts if you don’t maintain the second largest purchase of your life after a house. Keep every single maintenance record. Use proper parts and fluids.
Is This Just More Price FUD?
Your author has viewed an internal memo from a major manufacturer confirming that prices for these contracts will be rising on April 3rd. Whether costs to manufacturers will actually increase or not, we expect that many will take this opportunity to raise extended warranty contract prices.
Did you find this story helpful? Have you considered an extended warranty? Tell us in the comments section below.
Dodge, Chrysler, Ram, Jeep Extended Warranty Page
Image of Hyundai service area taken by John Goreham. Example price for Ford extended warranty courtesy of Ford pubic page.
John Goreham is a credentialed New England Motor Press Association member and expert vehicle tester. John completed an engineering program with a focus on electric vehicles, followed by two decades of work in high-tech, biopharma, and the automotive supply chain before becoming a news contributor. He is a member of the Society of Automotive Engineers (SAE int). In addition to his eleven years of work at Torque News, John has published thousands of articles and reviews at American news outlets. He is known for offering unfiltered opinions on vehicle topics. You can connect with John on Linkedin and follow his work on his personal X channel or on our X channel. Please note that stories carrying John's by-line are never AI-generated, but he does employ grammar and punctuation software when proofreading and he also uses image generation tools.
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