Best Extended Car Warranties of 2024 News ad

Money’s Main Takeaways

• Extended car warranties are optional insurance policies that can provide good value in some situations because they’ll pay for certain repair costs that aren’t covered by auto insurance.

• It’s impossible to know ahead of time if an extended car warranty will be worth the money — the answer depends on if your car winds up requiring an expensive repair, and if that repair is covered by the policy.

• Before buying anything, read company reviews and the fine print of extended car warranty policies carefully.

A car is one of the biggest purchases most people make in their lifetimes, and you’ll want it to be protected with a good auto insurance policy as well as a solid warranty. Brand new cars come with manufacturer warranties that cover mechanical malfunctions and defects that manifest within a specified timeframe or number of miles driven. These warranties typically last at least three years or 36,000 miles, though some are valid longer, especially on key components like the drivetrain.

Vehicle owners also have the option to purchase an extended car warranty — more properly known as an auto protection plan or vehicle service contract (VSC) — that will cover certain repairs after the manufacturer’s factory warranty has expired.

Extended car warranties can provide peace of mind because they promise to cover repairs that owners would otherwise have to pay for out of pocket, and they’re good values in some situations. However, most personal finance experts say that extended warranties in general are not worth the money, and they warn that the extended car warranty industry in particular notoriously has a bad reputation.

Among the issues that might steer drivers away from extended car warranties: Sales tactics can be aggressive and misleading, and the contracts are loaded with confusing fine print and exclusions that customers sometimes only understand when they attempt to use the warranty to cover repair costs.

Read on to learn about the best extended car warranty companies of 2024 and find out whether a vehicle service contract is right for you.

Our Top Picks for Best Extended Car Warranty Companies

Best Extended Car Warranty Reviews

Why we chose it: We selected Endurance as the best extended car warranty for broad coverage because it has no mileage limit with certain plans and all of its policies come with a free year of its Elite Benefits service.

Endurance stands out because it is the rare extended car warranty company that doesn’t list a specific vehicle mileage maximum for coverage. Whereas other providers cover vehicles only up to 200,000 or 250,000 miles, Endurance offers unlimited mileage coverage. Endurance does, however, have an age limit, only covering cars that are 20 years old or newer.

Endurance, which is a direct protection plan provider (not a broker) and has been around since 2006, offers three main coverage options highlighted on the company website. All of the plans come with one year free of Elite Benefits, a special service that includes 24/7 roadside assistance, replacement of key fobs and up to two tires annually due to road hazards (not regular wear and tear) and total loss protection. After the first year free, this service costs $29 per month.

Endurance’s least expensive plan option, Secure Plus, comes with coverage for the usual core components in extended warranties such as the engine, transmission, air-conditioning, steering and brakes. The exclusions at this plan level include the vehicle’s cooling system, suspension, fuel system and gaskets.

To get coverage on all of these components, customers should go with Endurance’s most comprehensive (and most expensive) plan, Supreme. The middle tier is called Superior, and it covers the suspension and fuel system but not gaskets. All of these plans include roadside assistance (for jumpstarts and tows) and rental car benefits (with some reimbursement if your vehicle needs repairs).

As with any extended car warranty plan, premium costs will depend on your vehicle make and mileage, and you must call to get an accurate price quote. Endurance will not offer price quotes online or via email. The company advertises rates starting at $99 per month, and it’s known to promote special deals, such as $300 off a new contract or 10% off plans during holiday periods.

Endurance says “almost all service shops and mechanics — and most definitely ASE Certified technicians — accept” its coverage. Chain stores like Pep Boys and Midas and major car dealerships accept Endurance protection plans too. But the company recommends that you call your preferred auto shop in advance to verify.

As for Endurance’s reputation, it’s mixed. The company has a roughly 3.6-star customer review rating at both the Better Business Bureau (BBB) and Trustpilot, which is above average compared to other extended car warranties. But Endurance is not officially rated or accredited by the BBB, and it draws a high level of complaints there — over 1,400 closed in the past 12 months. Many of the complaints feature frustrations related to “getting the runaround” when customers file claims to get coverage, as well as gripes about constant sales pitches.

Endurance offers several different kinds of policies, including the following auto protection plan coverage tiers:

See details on Endurance’s Secure Website >>

Why we chose it: In an industry plagued with complaints and low customer ratings, Toco Warranty receives generally good reviews, with an A+ rating from the BBB and a high 4.7-star rating at Trustpilot. Toco’s coverage tiers are simple for customers to sift through as well, with four levels of service based strictly on vehicle mileage.

Toco Warranty has the best reviews and ratings of the dozen extended car warranty companies whose plans were analyzed by Money. Founded in 2012, Toco gets an A+ rating from the BBB and an overall 4.5-star rating from customer reviews there, as well as a 4.7-star rating at Trustpilot (87% 5-star reviews).

Toco used to be a broker of vehicle service contracts that worked with companies like Warrantech that actually handled claims, but since 2022 Toco has written and administered its own contracts. The company tells Money that it is “vertically integrated so we control the customer experience from beginning to end.”

Toco makes coverage options simple by offering plans based solely on vehicle mileage and doing a better job than most of spelling out what is and isn’t covered by plans. Colors are used as the names of the four levels of coverage:

• Orange: up to 100,000 miles
• Yellow: 100,000 to 150,000 miles
• Blue: 150,000 to 200,000 miles
• Green: 200,000 to 250,000 miles

In general, the plans for lower mileage vehicles cover more components and potential repairs. This is to be expected, as newer cars tend to need fewer repairs. All Toco plans include coverage for powertrain components like the engine, transmission and drive axle, plus roadside assistance, towing and coverage for costs related to rental cars and trip interruption, as needed. Yet whereas the (lower mileage) orange and yellow plan cover the cooling system, fuel system, electrical and modern tech features, these are excluded from the green plan.

Prices for Toco’s vehicle service contracts can vary widely, and the only way to get price quotes is via phone. The most affordable Toco plans tend to be for lower-mileage cars, with prices starting at around $75 per month. Toco’s plans are “pay as you go,” with month-to-month subscriptions that can be canceled at any time.

Be aware, however, many of the company’s 5-star reviews appear to be from customers who have just purchased their plans and want to offer nice feedback about the sales process. In other words, these positive reviews are often from customers who haven’t actually tried to file a claim and get Toco to cover repair costs. Bad user reviews and BBB customer complaints, on the other hand, often mention the confusion and frustration involved in getting Toco to pay for claims.

Toco extended car warranty plans are determined by vehicle mileage:

See details on Toco’s Secure Website >>

Why we chose it: Olive is the only extended car warranty service analyzed by Money that successfully provided a price quote completely online, without the need to provide a phone number or even an email address. Customers can also quickly view coverage inclusions of various plans and browse online how different levels of deductibles will affect the monthly cost, making Olive the easiest shopping experience overall.

In Money’s trial runs through the buying process for extended car warranties, Olive offered the easiest shopping experience by far. Olive was one of just two services Money encountered that promised entirely online price quotes, and it was the only one that lived up to the billing. (The other company, Chaiz, failed to find any plans available in our queries.) If you prefer getting information via the internet, or simply want to get price quotes and sort through the extended car warranty options without sharing your phone number and email address, Olive is your best bet.

In addition to instantaneous online price quotes, Olive allows people to customize the deductible ($100, $250, $500) and see how each will affect the price. (The higher the deductible, the lower your monthly cost.) Olive also promises “no robocalling” ever and flat pricing, with no price increases, as well as contracts that are paid month to month and can be canceled any time.

Olive was founded in 2019, though its parent company, Repair Ventures, has been around since 2000. Repair Ventures gets an A+ rating from the BBB, but it has a low customer rating (2 stars out of 5) there, based on a small number of reviews (only 11, as of late 2023). There is no Trustpilot entry for Olive, and minimal other user reviews online for the company.

While Money found Olive to be transparent and clear in terms of coverage inclusions and pricing, it was difficult to find out some basic information about plans — such as mileage limits. After some searching, we discovered that Olive’s plans are available only for vehicles that are 10 years old or younger, only up to 140,000 miles. These policies are much more limited than many competitors, which often cover vehicles up to 20 years old and over 200,000 miles.

What’s more, costs were prohibitively expensive for older vehicles near the top end of Olive’s allowance — often $250 per month or higher, or upwards of $3,000-plus per year. At the low end, for newer cars with fewer miles, Olive’s costs were more reasonable, in the neighborhood of $50 to $75 a month if you selected the highest ($500) deductible. (But newer vehicles, of course, are less likely to break down and are far more likely to already have at least key components, such as the drivetrain, still covered by the factory warranty.)

Olive offers three tiers of coverage, with three different deductible options ($100, $250, $500):

See details on Olive’s Secure Website >>

Why we chose it: CARCHEX is a longstanding player in extended car warranties, with over 20 years in the business. It offers a wide range of coverage, including plans available for electric cars, rideshare drivers and vehicles with up to 250,000 miles.

CARCHEX is one of the better-known extended car warranty operations, in business as a broker since 1999. But “car warranties” isn’t the correct term. Like other third-party vendors reviewed in this article, CARCHEX doesn’t actually sell warranties. Instead, as the company explains in its FAQ section, it offers “vehicle service contracts or Extended Vehicle Protection plans which are similar in nature to the manufacturer’s warranty in that they cover repair costs for specific components of the vehicle after the manufacturer’s warranty expires.”

Since CARCHEX is a car warranty broker, it doesn’t write and administer all of its plans. Some of its plans are guaranteed by American Auto Shield or Royal Administration Services, for example. Regardless, CARCHEX says customers can choose any licensed auto repair facility when they have car trouble, and that it will pay claims directly to the repair shop with a company credit card — if and when the claim is approved, of course.

The company offers a wide variety of coverage options, for vehicles with up to 250,000 miles, and it states specifically that plans are available for electric cars and vehicles used for drivers working with rideshare brands like Lyft and Uber. Be aware, however, that there may be an added surcharge for a policy that covers rideshare vehicles, and that coverage for electric cars and hybrids may not include the battery. The fine print in one CARCHEX policy we viewed stated that the following are NOT included in coverage: “Electrical components related to any Hybrid of Electrically powered powertrain components/Systems.”

CARCHEX offers the following plans, in ascending order of increased inclusions (and, generally speaking, cost): Powertrain Coverage, Powertrain Plus Coverage, Platinum Coverage and Titanium Coverage. It also offers a special tier known as Extra Care Coverage, intended for components outside the powertrain such as the electrical, steering, suspension and braking systems.

CARCHEX is accredited and gets an A+ rating from the BBB. Consumers should know, however, that a high BBB rating may not equate to good customer reviews or an absence of complaints. Companies can receive a high BBB rating mainly because they respond in a timely and reasonable fashion to complaints — which, apparently, is what CARCHEX does to help it warrant an A+ score. Customer reviews paint a more negative picture of CARCHEX, as it gets a rating of slightly below 2 stars out of 5 at the BBB and 2.5 stars at Trustpilot.

Here’s more information about the service contracts offered by CARCHEX:

See details on Carchex’s Secure Website >>

Other companies we considered

CarShield

Known for cable TV advertisements featuring celebrities like Ice T and Ric Flair, CarShield is perhaps the most popular extended car warranty company in the market.

Why it didn’t make our list: In July 2024, the Federal Trade Commission challenged CarShield’s ads as deceptive and proposed a $10 million settlement alleging that “the company made misleading claims about what the service contracts cover, deceptively represented that consumers could get repairs at the shop of their choice, used deceptive celebrity and consumer endorsements, and violated the Telemarketing Sales Rule.”

CarShield currently has a A+ rating from the BBB, but in the recent past it was a D. It also has as a rating of 1.68 stars (out of 5) based on customer reviews at BBB. Thousands of users also routinely file complaints about CarShield to the BBB, often about difficulties in canceling coverage, challenges finding a mechanic who will work with the company and confusion over what repairs are actually covered.

See details on CarShield’s Secure Website >>

Chaiz

Founded in 2021, Chaiz is a marketplace for extended car warranties that promises immediate price quotes that you can buy entirely online. It has an A rating at BBB (though it is not accredited with the Bureau) and a 4.2-star out of 5 rating at Trustpilot, though that’s based only on a half-dozen reviews.

Why it didn’t make our list: Chaiz’s ratings are based on a very small pool of customers, and in our attempts to get price quotes for cars, it had no options available.

See details on Chaiz’s Secure Website >>

Concord Auto Protect

Concord Auto Protect is a direct provider of extended car warranty packages founded in 2013.

Why it didn’t make our list: Concord currently has no accreditation with the BBB, and it receives an F rating with the service. The company has a rating of 2.4 stars out of 5 at Trustpilot, and a 1.9-star rating at Yelp, though the number of reviews is limited.

See details on Concord’s Secure Website >>

Empire Auto Protect

Empire Auto Protect has been offering extended car warranty plans since 2006. While it did not offer plan price quotes instantaneously online in our queries, the company did respond with specific pricing details via email. This was rare compared to most companies, which only gave price quotes on the phone.

Why it didn’t make our list: Empire Auto Protect is not accredited by the BBB, and though it currently has an A+ rating, it had a C- grade not long ago and receives 1.2 stars out of 5 from a small pool of customer reviews. It has a 3.9-star rating at Trustpilot, but a higher-than-usual proportion of reviews (18%) give the company 1 star.

See details on Empire Auto Protect’s Secure Website >>

ForeverCar

ForeverCar was a well-known extended car warranty company for about a dozen years, but apparently as of the summer of 2023 it has stopped selling new plans and only provides service to existing customers.

Why it didn’t make our list: ForeverCar is not selling new extended car warranties. The company’s website has a log-in for current customers, but little else available to the public. On the BBB listing for ForeverCar, a company representative replied in September 2023 to one complaint, stating: “I’m sorry, but unfortunately, as of August 9th, we are no longer offering plans for sale. We are only servicing the current contracts that we have on our books. I apologize for the inconvenience.”

See details on ForeverCar’s Secure Website >>

Protect My Car

Founded in 2008, Protect My Car has three tiers of extended warranty coverage (Essential, Deluxe, Ultimate), and it has a special rewards program and plans that include free oil changes and tire rotations annually. It rates 4.2 stars out of 5 at Trustpilot.

Why it didn’t make our list: Protect My Car is not accredited with the BBB and it has a C rating there, with a 3.16-star rating from customers. It receives hundreds of complaints annually. The plans were among the most expensive we encountered.

See details on Protect My Car’s Secure Website >>

Best Extended Car Warranty Guide

If you’re looking for coverage on a car that goes beyond the auto manufacturer’s warranty, an aftermarket third-party extended warranty may provide protection against some breakdowns due to electrical or mechanical malfunctions. Extended warranties should not be confused with car insurance, which can help you pay for replacement costs (if the car is stolen or totaled) or repairs related to damage from an accident or other event. Instead, extended car warranties are vehicle service contracts that you pay for upfront in the hopes that the plan that will cover qualifying repairs down the road.

To help you determine if an extended car warranty is right for you, this guide covers how this optional coverage works, what it covers, what’s excluded from coverage and what to watch out for when buying.

What is an extended car warranty?

An extended car warranty is technically not a warranty as defined by federal law. Instead, the products commonly referred to as extended car warranties are actually “optional contracts sold by vehicle manufacturers, dealers, or independent companies,” the FTC explains. “The contract seller agrees to perform (or pay for) certain repairs or services outlined in the contract.”

An auto service contract or “Vehicle Service Contract (VSC) is often referred to as an ‘auto warranty’ or ‘extended warranty,’ but it is not a warranty,” the fine print disclosure at Endurance Warranty Services’ website states. “A VCS does, however, provide coverage for your vehicle after the manufacturer’s car warranty expires.”

A VSC is essentially an optional insurance policy you can purchase to cover certain components and repair costs when a car is malfunctioning. The policy supplements or replaces the warranty coverage provided by the car’s manufacturer.

How does an extended car warranty work?

Extended car warranties cover some vehicle repairs and the replacement of certain components for a predetermined number of years or miles. Buyers should be warned that extended car warranty contracts “have a lot of detail that you need to sit down and read,” says Lauren Fix, founder of Car Coach Reports. “My standard line is what the big print gives the small print takes away.”

As with factory (manufacturer) warranties, vehicle service contracts generally exclude “wear and tear” items such as tires, brake pads and wiper blades, and do not cover routine maintenance costs, such as oil changes. Most extended car warranty contracts also require vehicle owners to regularly schedule preventive maintenance according to the automaker’s guidelines and keep records of all work done on the car. If you fail to properly maintain the vehicle or can’t provide proof of upkeep, extended warranty providers may refuse to pay for claims.

These contracts generally come with a waiting period before you can file a claim. When you buy a plan, you must wait 30 days or more, and often must drive the vehicle 1,000 miles or more, before the warranty provider will consider a claim. If you file before reaching these marks, your claim will likely be denied. Most providers offer 30-day money back guarantees, but because of the waiting period, it’s impossible to use the policy to file a claim during this period.

Extended car warranties will also not cover preexisting conditions — meaning problems with the car that predate the owner’s purchase of the vehicle service contract.

Where you bring the vehicle for service may matter in the decision of whether a warranty provider covers or denies a claim. Some plans allow customers to bring the vehicle in for repairs to any licensed auto shop, while others specify that claims will be paid only if the work is done with a qualifying dealership or mechanic. With some plans, the provider will pay the repair shop directly when covering a claim, while others will ask customers to pay upfront and be reimbursed later.

The contracts for extended car warranties often state that customers must contact their policy provider before agreeing to work done on the vehicle in an auto repair facility. Failure to follow this step could result in the provider refusing to pay the claim. If you’re unsure about anything, ask questions and clarify what your warranty will cover and how claims will be paid before agreeing to service for your car.

Many extended car warranties have deductibles of $100 to $500 that car owners must pay, while the plan provider covers the rest of the bill. In some cases, vehicle owners must also pay out of pocket, without reimbursement, for a preliminary diagnostic service visit before the warranty company will consider a claim. There are many exclusions in vehicle service contracts, and owners should expect to pay for any components or parts of the repair process that aren’t specifically cited as being covered.

Be aware that delays can happen as auto mechanics and warranty companies relay information and questions between each other to see whether the repairs qualify for coverage. Among the most common customer complaints about extended car warranties revolve around confusion over what’s covered and frustrations about unresponsive customer service and claims being denied.

Extended car warranties may go into effect once the manufacturer’s warranty expires or overlap with that coverage. You should verify which is the case for any extended car warranty you are considering.

It’s important to read the fine print and confirm what your manufacturer’s warranty covers and for how long. Otherwise, you could end up buying coverage that you already have.

Are extended car warranties worth it?

Extended car warranties are worth the money if they provide peace of mind to vehicle owners who are worried about unexpected car repair bills, and if the money paid for the contract winds up being lower than the cost of covered repairs. Because of the uncertainty and guesswork involved, however, it’s impossible to know for sure ahead of time if an extended car warranty will ultimately be a purchase that pays off financially.

Customers who buy extended warranties that save them thousands of dollars in repairs are probably very satisfied with their purchasing decisions. But a large number of people who buy extended car warranties never actually file a claim. Others buy warranties and encounter difficulties trying to use them for coverage, with one or more claims denied and hassles and delays involved in the process — such as the possible need to pay for certain repairs or diagnostic work upfront, and wait for reimbursement from the warranty company.

The purchase obviously winds up not being worth the money if you never successfully file a claim that covers repair costs or get only an unexpectedly tiny portion of your car mechanic bill covered.

The value of an extended car warranty will depend on one’s individual circumstances, including the type of car you’re getting coverage for and whether it has lots of (covered or uncovered) problems, as well as your financial situation and the level of risk you’re comfortable with.

An extended car warranty may be worth it if:

• Your manufacturer’s warranty is expired (or about to) and you plan on keeping the car

• Your car is very unreliable and you can’t afford a new one

• Your car has a reputation for having expensive parts and repair needs

• You purchased a used vehicle and worry about unexpected repair costs

• You don’t have emergency savings available for car expenses and want to set a predictable repair budget

• You’re good at sifting through fine print and maintaining your vehicle

• You have a clear understanding of what is (and isn’t) covered in the warranty

Types of extended car warranties

Extended car warranties can come in two general categories: exclusionary or inclusionary.

As the name indicates, exclusionary car warranties list all the parts and repair jobs that are excluded — ie, aren’t covered — under your plan. Inclusionary warranties, on the other hand, only mention the specific parts or systems that are covered in the contract.

At first glance, there may not seem to be a huge difference between these different types of warranties. Yet since inclusionary plans only specify what’s included, they usually leave a much larger number of parts and potential repair needs out. This is why inclusionary plans can often be cheaper than their exclusionary counterparts, which tend to cover more repairs and only exclude what’s spelled out in the contract.

Be aware, however, that extended car warranty websites and salespeople rarely if ever state clearly that a plan is exclusionary and inclusionary. It’s up to you, the consumer, to look closely at how the plans (and their inclusions and exclusions) are presented, and to ask questions as needed. Extended car warranties — those sold by third-party vendors as opposed to manufacturers — often feature the following coverage tiers:

• Powertrain. Powertrain warranties cover parts that generate and transmit power, including the engine, transmission and axles. This is often the least expensive coverage tier because these parts of the car generally last a long time and repairs are rarely needed (though they can be very expensive if repairs are required).

• Powertrain Plus. This typically includes basic powertrain coverage, plus some added coverage or components that vary per company and plan.

• Bumper-to-bumper. There is no true “bumper-to-bumper” plan because no warranty truly covers everything. But so-called bumper-to-bumper warranties offer the most comprehensive coverage, including the vehicle’s major electronic and mechanical systems. Even with this coverage, there will be exclusions for “wear items” such as brake pads and tires, as well as routine maintenance like oil changes, which you’ll have to pay for when the time comes for replacement. Many plans also include roadside assistance and will cover rental cars when your vehicle is being serviced.

What does an extended car warranty cover?

As mentioned above, there are many types of extended car warranty that cover different components. It’s important to note that the components covered will depend on the specific terms of your coverage plan. The following is a list of both some of the more commonly covered parts and services, and those that are commonly excluded from coverage, though companies may offer add-on coverage options for one or more.

What is not covered by an extended car warranty?

Extended car warranties generally do not cover basic wear and tear. Car parts that wear down over time and need to periodically be replaced will usually not be covered. These parts include tires, brake pads, windshield wipers, spark plugs and more. Be aware that even if a company says it covers electric cars, it may not include coverage for the battery or other electric parts of the powertrain.

These service contracts generally stipulate that oil changes and other routine or preventive maintenance are not covered. Damage from accidents or failure to properly maintain your vehicle is not covered, and these policies won’t pay for claims if the repairs could be covered by any other insurance.

Preexisting conditions are not covered by extended car warranties. The policy provider will not pay for a claim if the need for repairs predated the purchase of the plan. New policy holders must typically wait 30 days and/or drive the vehicle for 1,000 miles after purchase before the plan provider will consider paying for a claim.

Extended car warranty providers may also not cover repairs if the work is not approved of in advance. This is why it’s essential to contact your provider before agreeing to repair work.

How much does an extended car warranty cost?

Because no two cars are the same, and because the terms and what’s covered in different extended car warranties vary widely, there’s a wide range of prices for these plans.

In Money’s experiences when shopping for extended car warranties, prices typically ranged between roughly $75 per month to $200, when paying monthly. Most plans, then, cost at least $1,000 per year.

As shoppers would expect, plans that cover more repairs, that last for a longer period of time, and that have low or no deductibles cost more to buy. Here are a number of factors that can affect how much an extended car warranty costs:

• Existing coverage. An extended car warranty can be considerably cheaper if your car is fairly new and still covered by the original factory warranty when you request a quote.

• Coverage type. More comprehensive coverage plans such as bumper-to-bumper and exclusionary plans will often cost more than basic powertrain protection plans.

• Coverage length. Because cars tend to need more repairs as time goes on and their mileage goes up, a longer-lasting contract will cost more than a short-term one.

• Vehicle type. Older cars and vehicles with high mileage are likely to need more repairs than a new vehicle. An extended car warranty for a vehicle that tends to need more frequent repairs will have a higher premium overall. Warranties for cars with expensive parts will also cost more.

• Deductible. Your deductible is the amount of money you need to pay before your coverage kicks in. As a general rule, the lower your deductible is, the higher your monthly payment will be. The typical deductible is $100 or $250, but the options range from $0 to $500.

• Provider. Different providers will charge different prices for similar products. Keep in mind that you get what you pay for and a cheaper product may have less favorable contract terms.

Do you need an extended car warranty?

Here’s what to consider to help you decide on whether to buy a plan.

Don’t buy if the manufacturer’s warranty is still in effect

One simple rule of thumb: If your vehicle’s manufacturer warranty still applies, even in part, chances are you don’t need an extended car warranty.

The recommendation applies even if the manufacturer’s bumper-to-bumper coverage period has elapsed and only the extended powertrain warranty remains in effect. After all, the most expensive and consequential car repairs covered under extended warranties tend to involve powertrain components, notably the engine and transmission.

Many common repairs cost less than annual plan premiums

Even if the factory warranty has expired, an extended car warranty may not always make sense. Many common car repairs cost less than $1,000 — which is on the low end of what you can expect to pay in annual premiums for an extended warranty. And remember: You’ll still probably have to pay a deductible for repairs before your coverage kicks in.

For context, replacing a damaged alternator (a very common repair) can cost you between $250 to $1,000 with parts and labor included. Depending on the specifics of your extended warranty plan, you could easily pay $1,000 or more in premiums throughout the year. Assuming the provider covers the claim, you’ll have to at least pay the deductible if your policy requires one.

Auto repair costs have increased significantly in recent years, and if your vehicle winds up needing several covered repairs, the policy can be worth the money. Yet you should factor in that most modern cars are very reliable and it’s rare for them to need multiple major repairs in the course of a year.

Expensive repairs may or may not be covered or worth fixing

An extended warranty could save you a lot of money if a major component such as your transmission or engine fails. Replacing those could easily cost you between $3,000 and $10,000. However, both typically run for at least 150,000 miles, especially if your vehicle is well-maintained (which is a necessary condition anyway for the extended warranty to be in effect).

You should also note that not every major auto repair is covered by an extended warranty, especially for older vehicles, which may have more exclusions to coverage than newer ones. One common exclusion across extended warranties is the car’s catalytic converter, which can cost thousands of dollars to replace.

Our analysis of hundreds of online reviews for extended car warranties shows that it’s very common for customers to complain that plan providers refused to cover claims for surprising reasons. Sometimes this is the result of providers using “loopholes” and giving customers “the runaround,” reviewers say, while in other situations there appears to be genuine confusion over what is and isn’t covered in policies.

Beware of myths about the need for coverage

Be ready to resist a hard sell on an extended car warranty when you buy a vehicle from a dealer. In part, that’s because high profit margins on these plans mean the salesperson may make more on this add-on than they do on selling the car itself.

And as previously mentioned, an extended warranty could include coverage that might be offered by the manufacturer’s warranty that comes with your new car. The FTC warns: “While a service contract might sound like a good idea, it could duplicate coverage you have through your manufacturer’s warranty.”

Also be wary of spammy robocalls or misleading letters in the mail saying that your vehicle’s warranty is expiring and you need to replace coverage. In some cases, these messages could be coming from completely fraudulent companies. In other situations, they may come from actual extended warranty companies — but they’re probably companies you don’t want to do business with. It’s always best to be skeptical of any unsolicited phone call from a salesperson.

What’s your comfort level with risk, and ability to cover a big repair bill?

If you’re very worried about costly car problems, the peace of mind a plan provides may override its drawbacks. This is particularly true if it’s easier for you to pay a monthly premium instead of saving up for emergencies.

Keep in mind, though, that extended warranties don’t cover everything. You’ll still have to budget for such expenses as routine maintenance and car insurance and be able to pay the deductible as needed if and when you file a claim under a plan. (Also, as noted above, depending on the company, having an extended warranty does not necessarily guarantee you won’t have to pay upfront for a repair that’s approved under your plan and then await reimbursement.)

Rather than pay for an extended car warranty, many personal finance experts advise that you should instead put the money in an emergency fund specifically dedicated to car repair bills. “If you really want to have money set aside for a potential repair down the road, you could always put money away in a savings account every single month, and when you need it, the money will be there,” says Lauren Fix of Car Coach Reports. “Then the money remains yours rather than some company that is making promises. This could be risky if you have a large repair. But it all depends on how you take care of your vehicle. This is where car maintenance is critical and can save you on repairs down the road.”

If you are going to stash money away in case of a car repair emergency, consider putting it in a high-yield savings account, so the funds can be gaining a good interest rate and will still be readily available when you need them. If you never need the money, that’s great too — it means you made the right choice to skip an extended car warranty.

How to choose an extended car warranty

Extended car warranties are sold both by dealerships or manufacturers and third-party vendors. The latter plans are the ones being reviewed here. Unfortunately, most extended car warranty providers do not give price quotes online or via email. So you’ll probably have to make multiple phone calls if you want to browse different options and compare prices and plans.

Here are some things you can do as you shop around for the best extended car warranty coverage:

Compare plans. Compare plans by not only their monthly costs but also the terms and exclusions of the warranty agreement. That includes noting whether you can bring the car in for repair to any certified mechanic or are limited to certain partner auto shops and dealerships. Also, compare potential deductibles and look at how lowering or increasing the deductible affects the premiums you pay, since a higher deductible tends to lower those costs.

Do a side-by-side coverage comparison. Review prospective plans side-by-side for the car components they cover — and don’t cover — and the extent of coverage. Note how the warranty companies stipulate you must maintain the car, and the paperwork required to prove that you’ve done so, since some plans may be stricter than others.

Read online reviews, ratings and complaints. To get a sense of what other consumers think of extended car warranty companies, browse reviews at multiple sites and sift through ratings and complaints posted at the Better Business Bureau. Read beyond the simple star ratings and look for details that reveal what it’s like to file a claim with a company. In our analysis of online reviews for extended car warranty companies, many five-star ratings focus on the salesperson immediately after the initial purchase. Complaints, on the other hand, tend to arise over confusion and frustration involved in filing claims once the plan is in effect.

Negotiate how much it will cost. Extended car warranties are lucrative financial products that leave vendors with much leeway to adjust costs and still make a profit on the sale. You have little to lose (and potentially much to gain) by asking for a cheaper price and playing different warranty companies off each other.

How We Found the Best Extended Car Warranties

To find the best extended warranty companies, Money looked into the types of service contracts offered, ease of getting price quotes and ratings and reviews from the Better Business Bureau, Trustpilot and other services.

• Plans and service contracts. When researching extended car warranty providers, we looked for companies that offered sample contracts and details on what each plan covers. Most companies featured on our list offer added perks such as 24/7 roadside assistance, towing, tire replacement or repair, locked-out service and trip interruption coverage. We included companies that offer comprehensive coverage options and provide customers flexibility when selecting a certified repair shop.

• Customer service and ease of price quotes. We looked for companies that made it easy to gather price quotes and browse different plan options — ideally, online or via email, rather than just on the phone. We also looked for extended warranty companies that spelled out clearly what is and isn’t covered in plans, and that made it easy to find quick answers in accessible FAQ sections.

• Customer satisfaction, user ratings and complaints. To compile our list of the best extended car warranties, we looked at publicly available ratings and customer reviews on the Better Business Bureau (BBB), as well as multiple customer review sites. Money examined hundreds of customer complaints and analyzed reviews to see whether users were rating the sales staff or other processes like filing claims and attempting to cancel contracts.

Summary of Money’s Best Extended Car Warranty Companies