An Introduction to Auto Warranties

An auto warranty, sometimes called an extended auto warranty, is a coverage plan designed to financially protect a car owner from parts and components breakdowns.

As cars age and gain miles, their essential components and systems have a higher and higher chance of breaking down. To get a broken-down vehicle up and running again, a car owner typically has to cover the cost of repairs or replacements. This is where an extended auto warranty would come in: instead of having to pay $1,000s in out-of-pocket repair or replacement expenses, an auto warranty company would cover the majority of these costs.

Auto warranty customers are responsible for monthly or yearly payments, known as premiums, paid out to the warranty company. In addition to premium costs, some warranty contracts will require warranty customers to pay out deductibles to mechanics.

Here’s What’s Typically Covered

Auto warranty providers will typically offer customers three coverage options of escalating protection. Customers can opt-in to a higher tier protection plan for added security, at the cost of higher premium payouts.

Check out the three main coverage options, below:

• Powertrain: Powertrain warranties will cover your vehicle’s most essential components: the engine and the transmission. For customers who prioritize value, powertrain coverage is an affordable place to start.
• Middle Tier: Middle tier coverage will cover more components than the bare-bones protection of powertrain plans (e.g. suspension, electrical, A/C), but won’t offer the same bumper-to-bumper coverage of a comprehensive plan. Middle-tier coverage is a safe option for customers who rely on their vehicles for daily travel.
• Comprehensive: A comprehensive plan will cover nearly every component and system in your vehicle, barring a few exceptions. This plan is a must for the customer who needs total protection.

The Benefits of Auto Warranty Coverage

There’s more to auto warranty coverage than saving you money. Let’s review all of the benefits, below:

• Prepare for Breakdowns: Breakdowns can happen at any point in a vehicle’s life. As cars age and tack on tens of thousands of miles, the chances of a major component breakdown become even higher. The most vital benefit of an extended auto warranty is financial protection against costly repair and replacement costs, which could save you $1,000s per claim.
• Access Roadside Assistance: To stay competitive in the warranty market, many auto warranty providers will include 24/7 roadside assistance in your contract. If you’re driving at night and you suffer a breakdown, you can pay your provider a quick call and instantly have help on the way.
• Replicate Your Factory Warranty: New vehicles often include a “factory warranty” in the price tag. The factory warranty includes extensive component protection in addition to important maintenance tasks like oil changes, tire rotations, and key fob replacements. When your factory warranty expires, an extended auto warranty can give you those perks right back.

How to Find the Best Extended Warranty for Your Vehicle

There are hundreds of car warranty providers out there on the internet, each offering multiple coverage plans. How do you pick the perfect plan for you? Check out our quick tips:

• Start here: You’re already off on the right foot by using this comparison site. Our team worked hard to filter through American auto warranty providers, ensuring we listed only the most reputable providers in our list. As you continue your research, we recommend sticking to our list of vetted providers.
• Focus on Coverage: Now that you know you can trust our list of auto warranty providers, the next step is to search out the company that offers the right coverage for your car. For a newer vehicle, you may want to look for a low-cost powertrain warranty to cover the basics. Older vehicles may require a more comprehensive, higher-priced extended warranty to protect your aging car.
• Compare Costs and Benefits: Lastly, you’ll want to compare quotes and maximize your access to add-on benefits and freebies. In addition to offering free quotes, auto warranty providers offer perks such as 24/7 roadside assistance, tire rotation, oil changes, key fob replacement, and cosmetic protection.