average cost of extended car warranty

Car Warranty

14 Factors That Impact the Cost of Your Extended Car Warranty

Extended warranties are a great way to protect yourself against expensive car repairs after the manufacturer warranty has run out. 

Also known as vehicle service contracts, extended warranties are available to buy as add-ons when you buy a new or a used vehicle from a dealership. Some manufacturers offer their own, but there are also third-party providers that offer reliable breakdown protection.

It can be a confusing world of definitions, different levels of coverage, and decisions about what the best deal is. That’s why we’re here to help you find out what the average cost of extended car warranty and clear, accurate information about vehicle service contracts. Read honest reviews based on personal experience of extended warranties for our own vehicles.  

Consumer protection body the FTC (Federal Trade Commission) defines vehicle service contracts as “a promise to perform (or pay for) certain repairs or services”. 

While you’re under no legal obligation to have a warranty like you are an insurance policy, in some ways they’re quite similar as you pay for coverage in case you need it. Extended warranties can be extremely useful if your vehicle encounters problems, as repairs can more than easily run into the thousands of dollars. 

If you’re new to the world of vehicle service contracts, you can find some starter information here, or you can read about the different options for protecting your vehicle.

What Is the Average Cost of Extended Car Warranty?

You might wonder why extended warranty providers don’t just offer one published price. However, there’s no standard for it—it’s a contract between you and the provider, and each provider has its own pricing mechanism. 

Automo blog compared quotes from a number of providers. The average cost of an auto extended warranty is typically around $2,600, but can range from $1,300-4,600. So, when you request a quote, what determines the price you’re given?

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What Affects the Cost of Your Extended Warranty?

Some of the main factors, often referred to as ‘moving parts’, are listed below.

#1: The Provider

You can buy extended warranties from manufacturers or from specialists like warranty companies. You usually find the factory-issued ones come in a little pricier. 

#2: The Coverage You’ve Already Got

If your vehicle is covered by the original manufacturer warranty when you buy an extended warranty, you’re probably going to find you qualify for better coverage and better prices. 

#3: The Type of Vehicle 

Because of the premium cost of repairs and replacement parts for luxury vehicles, if you own a luxury model, you’ll get a higher quote.

#4: The Price of Replacement Parts

If the parts of your vehicle tend to be more expensive than the average, because it’s an import or a high-end model, you’ll more than likely have to spend more on your coverage plan.

#5: The Price of Labor 

Mechanics and dealerships charge more for labor when working on certain makes and models, so this can also impact the extended warranty quote you get.

#6: The Age of Your Vehicle

Parts in older vehicles are more likely to have deteriorated, so coverage is also likely to be more expensive. 

#7: The Mileage of Your Vehicle

It’s not the years—it’s the mileage, as they say. More important even than the age of your vehicle, the mileage is a big indicator of wear and tear and the likelihood of your vehicle’s components requiring attention. More miles, more problems—and more money.

#8: The Location 

As hourly labor rates as well as part costs vary from state to state, your location can be a factor in the price of your coverage quote.

#9: The Driving Demands

The more you use the vehicle and the more you put it through, the higher the chances it’ll require repair and maintenance, so the higher the cost of coverage too. If you’re clocking up lots of miles or driving in harsher conditions, expect to pay more. 

#10: The Discounts

When you’re buying an extended warranty, depending on the provider and circumstances, you may be offered a discount or it could be part of a negotiation. Edmunds has some useful tips on negotiating extended warranties. 

#11: The Duration of the Coverage 

How many years and how many miles your coverage lasts are going to be factors. If you find coverage lasting longer, you’ll have to pay more for it. 

#12: The Level of Coverage 

Not all providers and not all extended warranty plans offer the same package. While some are just standard vehicle service contracts that cover the major mechanical parts of your vehicle, others can also cover electrical parts, and then there’s very little that the most comprehensive exclusionary plans don’t cover. The more comprehensive the coverage, the more you’ll expect to pay.

#13: The Additional Benefits 

On top of protection against mechanical and electrical problems, some extended warranty providers and coverage plans offer essential maintenance such as oil changes. The more benefits your plan includes, the more expensive it’s likely to be.

#14: The Deductible 

Like with insurance policies, the general rule is if you select a lower deductible in the event of a claim, you’ll end up paying a little more in premiums. 

Find Out More About Extended Warranties

The best way to find out how much a car warranty costs or get an average cost of extended car warranty is by contacting the provider directly by requesting a free quote. To find out top rated providers in market, check out our extended warranty provider reviews for more information. You can learn more about extended warranty coverage in our buyer guide and start comparing coverage plans to see which suit your needs. 

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