Worst Extended Warranty Companies
Avoid purchasing an extended warranty from a bad company—use Jerry’s tips for shopping instead.
Written by Jacqulyn Graber
Reviewed by Kathleen Flear
Table of Contents
- Signs of the worst extended auto warranty companies
- How to avoid car warranty scams
- Four of the best extended car warranty companies
- How to save on customized car insurance
- FAQs
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Purchasing an extended warranty is a great way to ensure your vehicle’s parts and components are protected for as long as possible—but not all extended car warranty companies are created equal. Some are great, while some are, well, the worst extended warranty companies out there.
If you purchase a new car, it will likely come with a factory warranty protecting it for a specified amount of years and/or miles. Some auto manufacturers also offer enticing extended warranties to extend your coverage—or you can purchase one from a third-party company for customized coverage options that suit your specific needs.
Here to help you evaluate whether an extended warranty company is legit is
Jerry
, thecar insurance
comparison shopping app. Read on to discover what makes an extended warranty company the worst and which companies we highly recommend. Signs of the worst extended auto warranty companies
A quick Google search will show you that there are tons of extended warranty providers out there offering a wide variety of protection plans at various prices. In general, extended warranties offer great peace of mind—but vehicle owners must be careful to ensure they’re working with reputable extended car warranty companies to avoid scammers.
Here are a few red flags that might indicate the extended warranty company you’re looking into should be avoided:
MORE: How to choose an extended car warranty
Bad reputation
Before purchasing a warranty plan, you should read the warranty reviews carefully. Previous shoppers will share their experiences with the car warranty provider and offer unfiltered accounts of their experiences. Bad warranty companies often have a long list of negative customer reviews, sometimes citing the same issue or issues.
Check out reviews on websites like Google, Yelp, and Trustpilot. You can also check out the Federal Trade Commission (FTC) for formal reports of fraud.
Pushy salespeople
When dealing with a customer service representative, you likely want to feel supported and informed. Warranty salespeople should answer your questions and patiently work with you to ensure you’re getting the best coverage available.
Pushy salespeople, on the other hand, are a good sign of warranty scams, or—at the very least—of a second-rate provider.
Confusing coverage plans
Providers will offer a variety of vehicle protection plans, and while you’ll need to carefully read the fine print to choose the best coverage for you, the warranty coverage options should be relatively straightforward.
If you can’t easily understand the essential details of your vehicle warranty, such as warranty cost, monthly payments, deductibles, covered components, and exclusions, then the company may be trying to intentionally confuse you.
No BBB rating
The Better Business Bureau rates brands, businesses, and charities so you can find trustworthy organizations. In addition to issuing a rating and accreditation, the BBB website reports customer reviews and complaints.
Only the best extended car warranty companies will earn A+ ratings, and bad ratings—or no ratings at all—are a clear sign that a company is a scam.
Lack of transparency
Car owners deserve complete transparency regarding what their extended warranty covers. You should be able to look over vehicle service contracts before committing, and FAQs should be addressed clearly and thoroughly.
Slow claims process
The whole point of purchasing an extended warranty is to ensure your necessary car repairs are covered and taken care of. If it takes forever to file a claim and get your vehicle into a repair shop, what’s the point of even paying for warranty services?
Before signing the dotted line, inquire about the company’s claims process and—specifically—how long the average claim takes.
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How to avoid car warranty scams
Believe it or not, car warranty scams are quite common. In fact, you could fall victim to one even if you’re not actively shopping for an extended warranty. You may have received spam calls or mail in the past from alleged companies offering great deals on warranty coverage.
Here are a few tips for avoiding those scammers:
- Don’t answer your phone if you don’t recognize the number—just let it go to voicemail.
- Exercise caution even if the caller ID says your car manufacturer’s name or something like “auto warranty department.”
- Never provide personal information like credit card numbers or social security numbers over the phone, unless you’ve verified that you’re talking to someone from a legitimate company with whom you already have a business relationship.
- Check the expiration date for the manufacturer’s warranty and the terms for extending that coverage before you consider buying coverage from an outside provider.
- Research a company offering extended coverage, look into BBB ratings, and read up on other customer reviews.
- Carefully read the fine print on any contract to see exactly what the alleged warranty covers and how long it lasts.
- If you’re receiving a large amount of scam calls, consider installing a call-blocking app on your smartphone. Such apps use reports from users, the FTC, and other sources to predict which calls are likely scams or spam.
MORE:
Four of the best extended car warranty companies
Rest assured—while there are absolutely some sketchy warranty providers out there, there are also some great ones that enhance and/or extend your manufacturer’s bumper-to-bumper and powertrain coverage and offer great support for mechanical breakdowns.
Here are some of the best extended auto warranty companies on the market:
Endurance
BBB rating: C-
Trustpilot rating: 4.1 / 5.0 stars
Endurance has robust customer reviews, which consistently articulate that the company has strong customer service and offers high-quality vehicle service contracts. The company has been in business since 2006 and is known for having transparent contracts and paying claims quickly.
Carchex
BBB rating: A+
Trustpilot rating: 3.1 / 5.0 stars
Carchex is a BBB Accredited Business and is even endorsed by industry expert Pat Goss from TV's MotorWeek! It offers a variety of coverage levels and has a strong reputation in the industry, thanks—in part—to affordable and flexible monthly payments and high coverage limits.
Protect My Car
BBB rating: A+
Trustpilot rating: 4.5 / 5.0 stars
Protect My Car is unique in that it offers policies for older and high mileage vehicles, as well as brand-new cars. They even have auto repair protection plans for drivers of Uber, Lyft, or any independent business owner who requires their vehicle to stay running.
Plus, a 30-day money-back guarantee and average policy deposit amount of $69 make warranty coverage affordable to all.
CarShield
BBB rating: F
Trustpilot rating: 4.0 / 5.0 stars
Despite a questionable BBB rating, CarShield is one of the most popular warranty companies in the industry and has a solid track record of reliability. Positive reviews for CarShield often mention paid claims, knowledgeable agents, and excellent customer service.
How to save on customized car insurance
An extended warranty isn’t the only way to protect your vehicle—investing in a great auto insurance company is also essential. The very best insurance providers will offer a variety of perks, such as roadside assistance, towing and labor coverage, and even rental car reimbursement.
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FAQs
Do you need an extended car warranty for a used car?
Whether or not you should purchase an extended warranty is entirely up to you and should be based on your personal preferences and finances. Some dealerships offer limited factory warranties for certified pre-owned vehicles, but others don’t offer any warranty at all. Fortunately, there are lots of third-party extended warranty companies that offer coverage for used cars.
Are extended warranties worth it?
Purchasing an extended warranty can lower or eliminate repair bills should something happen to a covered component of your vehicle during the warranty period. However, if nothing goes wrong with your vehicle, you’ll spend more on the contract than you receive in return.
A great way to determine if an extended warranty is necessary for your vehicle is to look into its reliability ratings and estimated repair costs over a five-year period.
How much does an extended warranty cost?
The average extended car warranty cost is about $2,550, though it can range from $1,000 to $4,500 or more depending on the plan.
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