How to get the Best Price from an Extended Warranty

Car Warranty

If you are unable to afford a new car, you always have the option of a used one.

However, the manufacturer’s warranty expires after a certain duration of time. The seller may, therefore, offer an extended warranty. A warranty protects you from any potential internal faults. It is the manufacturer’s guarantee that the car you have purchased is in working condition.

If you are looking to get the best price from your extended warranty there are a few crucial factors that you need to consider.

Tips when getting an Extended Warranty

Evaluate the need for extended warranty

A new car will come with the manufacturer’s warranty. It is their way of saying that they have confidence with their product and should any issues arise, they are willing to fix it. When the manufacturer’s warranty comes to an end, you may need an extended warranty. The first thing you need to evaluate is whether you really need it. Car reliability will be a determining factor. You can enquire from other car owners who have the same model as yours on the challenges and issues they encounter with their cars.

Once you have made the decision to get the warranty, you need to get it as soon as possible. Cars wear and tear, and this causes the warranty to become more expensive. There is also the issue of inflation. The longer you wait, the more it will cost you.

Consider different providers

Do not just go for the dealership extended warranty. Shop around for the best price. Ask the providers what is covered by their warranty and compare offers. Most of the dealers either have extended warranties from the manufacturer or they offer their own. You should read the fine print before making any payments. If you are getting a warranty from a different service provider, it is useful to ensure that the dealer is reputable.

However, reputable service providers tend to charge extra for their services. Since the dealer is going to be taking care of your spare parts, you need someone who has solid financials, and not one who will file for bankruptcy after a few months. You can contact some of your family members or friends about the quality of their services, or read reviews online.

Before signing the warranty, negotiate the price. It is not set in stone, and dealers are always willing to make a good offer to bring in new clients.

What is offered?

Once you have negotiated the price, you need to read the fine print to find out what you are actually getting from the extended warranty. Typical warranties will have things like roadside assistance, car rental reimbursement, and travel expense warranty. The more items on the list, the better the warranty. Warranties differ, and one particular item to look at is the deductibles.

If you need to get your car repaired, some of the service stations will charge you for it. Look for one which has zero charges for deductibles. Just like home appliance systems, some of the service providers will offer a 100% money-back guarantee. This ensures that you get your refund should you find your policy not satisfactory.

Transferable warranty

In some instances, you can purchase an extended warranty but decide to sell your car mid-term. In this case, look for a service provider who lets you transfer the warranty to the new owner without any additional costs.

Ensure that the warranty you are getting allows you to have the repairs done by a certified technician as opposed to your dealership. A good extended warranty should cover all the car parts that are subject to wear and tear. In a bumper-to-bumper warranty, you are covered for all the car parts.

Understand your policy

The reason you are getting an extended warranty is to prevent the need to pay from your own pocket. You need to understand what is covered by the policy and whether you will be required to chip in for certain repairs. In some instances, the dealer will promise reimbursement but you need to confirm that this is part of the policy. Do not go for those that promise reimbursement without having it written in the policy, because they may take longer to reimburse, may require a lot of paperwork, and only end up giving you partial, or even zero, reimbursement.

Just like when you are signing a big contract, always follow your gut instinct. If the deal is too good to be true then walk away. Look for hidden charges in the contract. You can request your lawyer or friend who understands warranties to accompany you during the signing process. Contracts that encourage you to keep receipts are good because they will cater for them.


Extended warranties cover you from unexpected repairs. Car repairs can cause a huge dent in your pockets, but extended warranties have you covered. And there’s more: you may get roadside assistance, depending on the policy and rental call service. Most of the extended warranties will keep your car covered for the next five years. This ensures you enjoy stress-free driving. But, before you settle on a service provider, take the time to do your research.

Shop around for the best deal, and when you find one that covers most of all that you are looking for, haggle for the reduction of the price. It is not mandatory to take out a warranty with your car dealer; however, the dealer may offer some bonuses that have been extended by the manufacturer. You also want to know who backs the warranty. Most of the service contracts are fulfilled by third parties.

You need to ask yourself whether they are reputable firms with the financial muscle to handle the repairs. If you plan to sell the car during the term of the warranty, ensure that you can transfer the warranty to the new owner without any hidden costs. Just like any contract that you sign, the devil is in the details. You need to be clear about what is being covered by the warranty. Also, ask how they handle claims and reimbursements.

Written by: Magnus Sellén

Founder, owner & main author of Mechanic Base. I have been repairing cars for more than 10 years, specialized in advanced diagnostics & troubleshooting. I have also been a drifting driver and mechanic for over 7 years.