How to Negotiate the Best Price for an Extended Warranty

Car warranties can be expensive if not done properly. This is how you can negotiate the best price for an extended warranty to save your money

How To Negotiate The Best Price For An Extended Warranty

There’s a lot of debate out there on whether or not an extended warranty for your car is a good thing. Most auto advice columns and YouTubers tell you to stay away from it; don’t bother with it; it’s a scam; and so on. Some people are pretty scathing about it, but why? Are there no benefits to having an extended warranty?

The fact remains that an extended warranty means greater coverage for a longer period of time, and gives you a great cushion of safety against really big and catastrophic problems that can happen in your car. One of the reasons people advise against getting an extended warranty is the cost, but there are ways to improve on those costs.

This brings us to the core topic of today’s blog. We’re looking at how to get the best price for an extended warranty. Below you’ll find our best tips:

How to Negotiate the Best Price for an Extended Warranty

1. Negotiate the Price Separately from That of Your Car

Negotiate The Price Car Dealer

It’s always best to first negotiate all the regular details of your car’s sale price and any additional costs before you reach the subject of the extended warranty. It’s quite common for some dealerships to try and throw in the extended warranty as part of the overall price of the car, but that’s exactly how costs can get out of hand.

When the extended warranty is lumped in, it’s hard to know exactly how much extra it’s costing you (see tip #3 on how to deal with those situations where it’s already been lumped in). Therefore, negotiate for the car deal first, and only then once that is finalized let them bring up the extended warranty.

If they pressure you in the meantime, you can just tell them first that you’re not interested in the extended warranty, because the truth is you can always add it later, even years later when your main warranty is about to expire (see tip #5).

2. Get Multiple Quotes

As with just about anything to do with your car — finance options, insurance, etc. — you should never just take the first price you see. Extended warranties can be bought from dealerships and from third-party companies and organizations. Therefore, you definitely should not be thinking that you have to buy it on the day you’re getting your current car, or even from that same dealership.

Always shop around for quotes on an extended warranty, as long as you analyze the terms and cost of the warranty carefully, you won’t go far wrong (see tip #6 and tip #7 for more on that). What some people also do when possible is even agree to one warranty that looks good enough, but then comparison shop within the valid period that you can cancel the warranty and get a full refund. If one warranty is reasonable enough, there’s no reason not to snap it up if the cancellation and refund policy is there in support. Often dealerships and warranty companies will give you as long as 30 days to make a final decision.

3. Get Itemized Cost

For those times when your extended warranty has been thrown into the overall monthly rate of your car’s finance, ask them immediately to give you an itemized breakdown of the cost of the car. Doing this is also good for seeing just how much every element within the overall deal is costing you, including the specific cost of the extended warranty.

You invariably find that those who have their extended warranties lumped into the overall cost are paying a lot more than those who negotiate for them and purchase them separately from the car itself.

4. Try to Pay Up Front

Pay Upfront Car

There are different options for ways to pay for the extended warranty. If you have it placed within the overall monthly cost of your car financing, then you’ll find that over time you pay far more with interest than the warranty was worth in the first place. Dealerships like to tell you that adding a little to the monthly cost for an extended warranty is worth it because you spread the cost and hardly notice it month to month. When you’re looking at the bigger picture, however, it’s not a good idea.

To get the best price for your extended warranty, you should follow a similar principle to that of your insurance policy. If you pay it all up front instead of monthly, the overall cost is reduced. It’s more of a hit to your wallet in the short term, but you are paying less overall.

5. Don’t Get the Extended Warranty Right Away

Further above we touched on this point. As part of your comparison shopping, and exploring of your exact needs, there’s actually no rush to get the extended warranty right away when you’re buying your car. The extended warranty can be purchased during any time that your main warranty is active. There are a few benefits to this.

First, you can take the time to drive your car around, get to know your driving needs and figure out quickly if you really need an extended warranty or not. Most dealerships rely on your fear of the unknown, and the unknowable future of your driving life to pressure you into buying one immediately. Many people who purchase extended warranties regret it not because the coverage or service was bad, but because they never needed it on their stress-free, light-duty driving schedule.

Second, you can also take advantage of the extra time to see what kinds of warranties are available. There could be sales events, times where warranties are being sold for less during an off-peak month like January, and you might snap up a real bargain with great conditions. So, in many cases, holding off on purchasing the extended warranty can help guarantee a better price.

RELATED: 5 Reasons to Use a Car Broker to Buy Your Next Vehicle

6. Go For Highest Level Possible

When you are purchasing extended warranties, they will come in different levels. You might intuitively think, according to your blog title today, that the best tip would be to go for the most basic level of extended warranty, since that would be better-priced than anything higher. This is not what we think is best. A good price for a warranty can be judged not just on how much it costs to purchase, but on how much in repairs and maintenance it can potentially save you, especially on things that are more likely going to be needed over the course of that warranty period.

Higher levels of warranty cost more on the surface, but they cover many more aspects of your car’s repair and maintenance, and not just the powertrain and drivetrain as a basic warranty would cover. The level and cost of the warranty also has to be matched with a good deductible, which we will cover in the next point.

7. Favor a Lower Deductible Where Possible

Another advantage of taking an apparently higher-price extended warranty policy is that the deductible will be lower. Deductibles can be a real money trap that render your warranty far more expensive than you thought. Let’s say you paid $1,000 for an extended warranty with a $200 deductible. If you made 5 claims on that warranty, you’d have to pay $200 each time, meaning you would have spent the entire cost of the warranty all over again.

If you take a higher-level warranty with greater coverage, you might pay more, but your deductible is lower. Let’s say you go for a $1,200 warranty with a $100 deductible. Those same 5 claims would only cost you an additional $500, which still overall makes it cheaper than the apparently cheaper $1,000 policy mentioned in the paragraph above. Therefore, going for a lower deductible can make a huge difference.

You should also avoid policies in which you are required to first pay the bill in full and then ask for reimbursement later. This is the worst and most inconvenient condition for you.


To make the extended warranty worthwhile, you have to put in some additional work and some additional thought to ensure that you can get the best deal possible. You may also have to negotiate hard for the terms of your extended warranty, especially the policy price, deductible, and the amount of coverage offered. Don’t be pressured by pushy salespeople. Take your time, shop around, don’t rush and compare, compare, compare. 

Magnus Sellén
Written by:

Magnus is the owner and main author of Mechanicbase. He has been working as a car mechanic for over 10 years, and the majority of them specialized in advanced car diagnostics and troubleshooting. Certified Automotive Diagnostic Technician.

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