Extended Warranties

Are you absolutely sick and tired of hearing about your car’s extended warranty?
Extended warranty… how can I lose?
What is an extended warranty? Is it a scam?
Are any of them even worthwhile?

I’m Christopher, and this is Trust in the Drive.
Today we’re talking about how to navigate the oversaturated market for extended warranties and how to avoid some scammy practices out there.

So first, what is an extended warranty?
Extended warranties are also known as service contracts or aftermarket warranties. These are offered by third-party companies — they are not your original manufacturer’s warranty. Unlike your manufacturer’s warranty, these cost money. They can be purchased separately from your vehicle and ideally cover repairs and services after the manufacturer’s warranty expires.

Sounds great, right? Well… not always.
In most cases, if you’re buying a relatively new vehicle from a reputable manufacturer and a reputable dealer, the factory warranty will cover most of your needs. All automakers have a factory warranty, typically listed on the window sticker of the car you’re buying.

Making a claim on these warranties is usually a breeze. There’s a long-standing relationship between the manufacturer and the dealership’s technicians that helps make this process simple for the driver. It also builds trust between the driver and the automaker. It’s a great business model — and we’ve been doing it for 100 years.

But let’s say your car’s manufacturer warranty has expired. That’s when these third-party aftermarket warranties can come into play. And yes, there are some reputable companies with worthwhile extended warranties. But you have to be careful — there are a lot of scammy deals out there that don’t have your best interests at heart.

Here’s what to look out for:

1. Read the fine print. Better yet, read it with your dealer’s service advisor so you fully understand it. These contracts are filled with exclusions, limitations, and jargon. If you’re not careful, you may think you’re covered — but then your claim gets denied.

2. Understand the claims process. Some companies make it a nightmare by design: requiring excessive documentation, limiting you to specific repair shops, slowing the process, and leaving you without your vehicle longer.

3. Check the cost. Extended warranties can cost thousands of dollars while providing minimal coverage. For example, one customer paid $3,000 for a warranty, only to find the maximum payout per repair was $500 — basically useless for major issues, if they even pay out at all.

So, those are the risks. But like I said, there are a few companies offering worthwhile service contracts. If you’re a smart, informed shopper, you can get a lot of bang for your buck.

Here are some tips:

• Look over the contract with your service provider, mechanic buddy, or even a lawyer friend. Pro tip: find a contract that covers the entertainment system and dash electronics — these are expensive to repair and often excluded.

• Shop with reputable companies. We like Allstate Dealer Services, Zurich, and MasterTech. They have good communication channels, filing claims is smooth, and overall they provide stress-free coverage. Allstate is our top pick for communication, coverage, and stress-free claims.

• Avoid these companies, according to the Better Business Bureau:

  1. CarShield

  2. US Automotive Protection Services

  3. Department of Warranty Services
     Don’t be tempted by the prices — just steer clear.

That’s it, y’all. Extended warranties really can save you in a pinch if you’ve got a good one. Just be careful, because there are a lot of bad actors out there.

Thanks for watching, and I’ll see you next time. Drive safe.