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  • Writer's pictureJohn Savage, Author, CFHC

Should You Purchase A Car Warranty?

Updated: Feb 2, 2023

by John Savage

Have you ever purchased a Car Warranty? When you first purchased your vehicle, what did the dealer explain to you about your extended warranty? Did you understand the pros and cons and the benefit of why you should probably have one? Often times, car warranties can be regarded as secondary or not all that important. In light of all the increase in costs for parts, oil, maintenance, and other vehicle expenses, getting a warranty may be something you should seriously consider. if you have mused over this for a while, it may be time to act!

Often times, we don't think of purchasing any type of protection on ourselves until we need it all of a sudden or we seen someone else go through some unfortunate event. But what if we were educated on having a more preventative approach to life. Anything we do in life, we plan for the best possible outcomes by preparing ourselves so when a situation or opportunity arises, we will be well equipped to handle it. This in turn reduces our level of stress and anxiety because we had certain contingencies in place.

A Car Warranty is no different, if you don't have $10,000 extra laying around, you may want to consider getting a warranty for your vehicle. Often times the rebuttal is, it's too expensive or I can't afford it. In some cases I would have to agree and say that is true but in many cases that is not necessarily so. We have Life and Health Insurance and pay thousands of dollars a year for coverage in some cases, doesn't even cover half our expenses. And often, we hardly ever use the full benefit but we get it because we want to be preventative or the private insurance we prefer is too expenses or because it's mandated that we have coverage.

So, why not get additional coverage on your vehicle which for many, is one of their greatest assets because that is how they get to and from work, working as a contractor, or run a business and service clients. If your vehicle breaks down and you have no other methods of transportation or resources to get your vehicle back on the road in a timely manner, you can now find yourself spiraling with lost business, a loss of income, and getting behind on bills. Working with EAP plans, many employees have told me how they had late fees, overdrafts, high credit card bills, and in some cases, the threat of eviction.

I have worked with a lot of employees with companies across the United States that called and needed financial counseling and looking for resources because they did not have enough money to get their engine replaced or transmission fixed and since it was not an insurance claim, the mechanical failure was not covered under their insurance regardless of whether they had comprehensive coverage. A lot of people who really could benefit from a vehicle warranty but don't own one are low to middle income. And often times, many of them have newer vehicles which is a great time to purchase a Car Warranty. Especially if the vehicle is less than 10 years old.

The majority of people are offered and accept an Extended Car Warranty when they purchase their vehicle. Purchasing a vehicle warranty is like purchasing a Product Warranty. It often is very limited and if you read the contract language, it will only cover certain parts or systems for a limited period of time. It could be 90 days, 12 months, 24 months, 5 years and or 50k or 10000o miles, whichever is first.

Take a look at some of the states below:

Companies like Ford, GM, BMW, Tesla, and Mercedes set aside Warranty Reserves to account for vehicle repairs per unit sold. This money is set aside to cover the cost of parts like drive train, transmission, electronic parts, brakes and more. Reserves per unit can range from $600 to $3000 on average depending on the class of vehicle being purchased (Warranty Week).

Some car warranties will cover wear and tear up to a certain point based on the manufacture recommended guidelines (failure during normal use), so make sure you have read and understood your car warranty carefully before you decide to file a claim.

Coverage Types

There are 3 main types of Car Warranties, 1) Manufacturer's Warranty, 2) CPO or Pre-Owned Certified Warranty which is a lot like a Original Manufacturer's Warranty, and an Extended Warranty which is what many consumers obtain after their original warranty has expired. These warranties can be purchased by a 3rd party provider or directly through an auto manufacturer.

Vehicle Warranty's can be very broad and comprehensive in coverage or very specific and limited to your needs ( There are many types of warranty specifics, so make sure you pick the one that is right for you, the age and make of your vehicle, and your pocket book. There are some Vehicle Warranty providers that provide more than one option to pay for your warranty to make the payments affordable and flexible in terms of obtaining the coverage you need without having to front $600 - $1000 up front.

Waiting Period

Many car Warranty's have waiting periods specified in the Service Contract before the benefits can be accessed. These waiting periods tend to range from 30 - 90 days or may even include a specified number of miles you must drive before you can file a claim.

Warranty Add-ons

Another great thing about auto warranties is that they may include certain add-ons with your coverage such as Tire protection, "Trip Interruption Coverage", Oil Changes, Rental Car Reimbursement, and Roadside Assistance just to name a few.

How to Verify If You Have a Car Warranty

You can check if your vehicle had an active warranty by contacting your dealership where you purchased the vehicle from, contacting the manufacturer directly, or by visiting Carfax online and entering your VIN number.

How to Keep Your Vehicle Warranty From Being Voided

Car Warranties can be a great additional risk mitigation tool because unlike regular Auto Insurance, it does not cover if you get in an car accident but covers the failure of internal mechanical parts and systems. One caveat to keep in mind though, is that your vehicle warranty can be voided in part or entirely just because you failed to maintain proper care and maintenance on the vehicle based on the manufacturers recommended guidelines of what is reasonable for maintaining the vehicle in proper working condition.

As you can see, there is a lot to unpack when it comes to purchasing a Vehicle Warranty and the importance of why you should should consider having one. Vehicle Warranties can provide peace of mind, security, and save you a lot of time, money, and headache in the long run. To learn more or to get a comprehensive quote for a Vehicle Warranty click Quote Me Now or email

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