An extended car warranty, more accurately known as a vehicle service contract, primarily covers the repair or replacement of major mechanical and electrical components after the factory warranty expires. The core components covered are typically the engine, transmission, and drive axles. However, coverage varies dramatically by plan, generally falling into three categories: exclusionary policies that cover everything except a short list of items, stated-component policies that list only what's covered, and less comprehensive powertrain-only plans.
It’s crucial to understand what is not covered. Most plans exclude routine maintenance (oil changes, brake pads), wear-and-tear items (tires, wiper blades), and damage from accidents, neglect, or improper maintenance. Additionally, aftermarket parts you install or pre-existing conditions are almost never covered.
Here’s a comparison of common coverage levels:
| Coverage Component | Powertrain-Only Plan | Mid-Level Stated Component Plan | Exclusionary "Bumper-to-Bumper" Plan |
|---|
| Engine | Full | Full | Full |
| Transmission | Full | Full | Full |
| Drive Axles | Full | Full | Full |
| Air Conditioning | Not Covered | Usually Covered | Full |
| Fuel Pump | Not Covered | Usually Covered | Full |
| Electrical Systems | Not Covered | Usually Covered | Full |
| Steering | Not Covered | Sometimes Covered | Full |
| Brakes (Hydraulic) | Not Covered | Not Covered | Full |
| High-Tech Electronics | Not Covered | Not Covered | Often Covered |
| Navigation/Infotainment | Not Covered | Not Covered | Often Covered |
Before purchasing, always read the sample contract thoroughly. Pay close attention to the deductible amount (per visit or per repair), claim procedures, and whether the plan allows you to use any licensed repair facility or restricts you to dealerships. The best plans offer flexibility and clear terms.
