Quick answer
You don't need to buy an extended warranty just because you're buying a new car. Your manufacturer's warranty is already included in the purchase price. An extra contract may make sense if it adds useful repair coverage, fits how long you'll keep the car, and costs less than you're comfortable setting aside for repairs.
You don’t need to buy an extended warranty just because you’re buying a new car. Your manufacturer’s warranty is already included in the purchase price. An extra contract may make sense if it adds useful repair coverage, fits how long you’ll keep the car, and costs less than you’re comfortable setting aside for repairs.
When should you buy an extended warranty on a new car?
Consider buying when the contract adds useful coverage beyond your manufacturer’s warranty, rather than paying for protection that duplicates what you already have.
Start with the warranty booklet for your new car. Check which defects or failures it covers and when that coverage ends. Manufacturer warranties often have time and mileage limits, with coverage ending when you reach whichever limit comes first.
An “extended warranty” is usually an auto service contract. You buy it separately, and the seller agrees to perform or pay for specified repairs or services. Despite the familiar name, it isn’t a warranty as defined by federal law.
The Federal Trade Commission’s auto warranty guide says a service contract probably won’t help if it starts before the manufacturer’s warranty expires. The key is whether the contract adds something useful, not whether its name sounds comprehensive.
You don’t have to settle this at the same time you choose the car. The FTC’s March 2023 guidance says service contracts can be bought anytime. However, the Consumer Financial Protection Bureau’s guidance, reviewed in March 2024, notes that products often have eligibility restrictions. Waiting doesn’t mean every contract will remain available.
Ask about eligibility and the coverage start date before deciding to postpone. Our car warranty guide explains the broader distinction between included warranties and separately purchased contracts.
Should you buy an extended warranty on a new car from the dealership?
Buying from the dealership can make sense, but the written coverage, total price, and claims administrator matter more than where you purchase it.
Service contracts are sold by manufacturers, dealerships, and independent companies. A dealership sale doesn’t necessarily mean the manufacturer handles the contract. According to the FTC, many contracts sold by dealers are administered by independent companies that decide whether to authorize claim payments.
Before agreeing to the dealership’s offer, ask:
- Who is responsible for paying covered claims?
- Who decides whether a repair qualifies?
- Where can you have covered repairs performed?
- Does repair work or towing require advance approval?
- Can you review the complete contract before paying?
Keep the answers next to the actual contract language. A salesperson’s explanation should match what you’re buying in writing.
The price is also worth questioning. The CFPB’s guidance, reviewed in March 2024, says the cost can be negotiated when you purchase your vehicle. You don’t have to treat the initial offer as a fixed price.
An extended warranty is optional and generally cannot be required to get an auto loan. Before signing loan papers, ask whether they include charges for optional products. If someone insists you must buy the contract, ask them to identify that requirement in writing and consider another dealer or lender.
You can review extended car warranty quotes separately from the vehicle purchase. Compare the coverage terms, not just the seller’s price.
How much does a new car extended warranty cost?
There isn’t a standard price: the vehicle, covered repairs, contract length, and deductible all affect what you’ll pay and what value you receive.
The FTC’s undated guide, fetched in September 2026, describes prices ranging from several hundred dollars to several thousand. That’s a broad reference, not a current quote for your new car.
What you’ll pay usually depends on whether the vehicle is new or used, its make and model, the repairs or services included, and the contract’s duration. You may also owe a deductible each time the vehicle is serviced or repaired.
Compare the contract with the protection you already have and the alternative of saving for repairs:
| Approach | What you pay | What it provides | Main limitation |
|---|---|---|---|
| Manufacturer’s warranty | Included in the new car’s price | Coverage for certain defects or failures | Time, mileage, and coverage limits |
| Separate service contract | An extra purchase price, possibly plus deductibles | Repairs or services specified in the contract | Exclusions and claim requirements |
| Repair savings | Money you choose to set aside | Funds you control for maintenance or repairs | Only the money you’ve saved is available |
Don’t judge affordability by the purchase price alone. Ask whether towing and rental expenses are fully covered, whether depreciation reduces repair payments, and which costs remain yours.
You might pay more for the contract than you receive in benefits. That doesn’t settle the decision by itself, but it makes a comparison with your own repair savings worthwhile.
What is the best extended warranty for a new car?
The best contract for you adds relevant coverage, clearly explains exclusions, and has requirements you can follow throughout the time you expect ownership.
There’s no useful universal winner without knowing your car, existing warranty, intended use, and ownership plans. Start with those details rather than a label such as “full protection” or “bumper-to-bumper.” Even broad-sounding coverage can have limitations and exclusions.
Coverage that addresses your concerns
Read both what’s covered and what’s excluded. A contract covering only “mechanical breakdowns” may not cover problems caused by normal wear and tear. Auto service contracts typically don’t cover accident damage, and few cover all repairs and maintenance.
Routine maintenance is typically excluded, although some contracts cover tasks such as scheduled oil changes. Check the actual wording instead of assuming maintenance is included or always excluded.
Claim rules you can follow
Check whether repairs need preapproval, where the car must be serviced, and what maintenance the contract requires. Failure to follow required manufacturer maintenance recommendations might end your coverage.
Also ask whether claim payments are reduced based on mileage. A covered repair doesn’t necessarily mean the entire bill gets paid.
Terms that fit your ownership plans
If the contract lasts longer than you expect to own the car, ask whether you can transfer it, whether there’s a transfer fee, or whether a shorter contract is available.
Finally, identify the company responsible for coverage. The FTC recommends checking with your state consumer protection office for complaints. The value of the contract depends on that company’s ability to honor it.
What if you regret buying an extended warranty?
If you regret the purchase, review your cancellation rights and contract terms before assuming you must keep paying for coverage you don’t want.
The sources supporting this guide don’t provide an owner survey or a regret rate. It wouldn’t be fair to claim that most owners either love or regret these contracts.
What the consumer guidance does identify are reasons a purchase may disappoint:
- The contract duplicates the manufacturer’s warranty.
- A needed repair falls under an exclusion.
- Towing or rental reimbursement doesn’t cover the full expense.
- Deductibles or reduced claim payments leave additional costs.
- The buyer pays more than they receive in benefits.
If any of those concerns apply, compare what the seller promised with the written contract. The FTC’s March 2023 consumer guidance recommends getting coverage in writing before paying and making sure the seller’s explanation matches it.
The CFPB’s guidance, reviewed in February 2024, says you have the right to cancel an extended warranty or vehicle service contract at any time and end coverage. Don’t assume that means a full refund.
Ask for the cancellation process and refund calculation in writing. If the contract was added to your auto loan, also ask the lender how cancellation will be handled.
For a dispute over rights or refund terms, check with your state consumer protection office or a qualified legal professional rather than relying on a salesperson’s verbal answer.
Should you buy an extended warranty on a used car instead?
A used car contract deserves the same scrutiny: check existing coverage, eligibility, exclusions, and cost before deciding whether it adds enough value for you.
A used vehicle may already have some warranty coverage. Manufacturer coverage may still apply if its time or mileage limits haven’t been reached. Don’t assume “used” automatically means you’re paying for every repair yourself.
The question isn’t simply whether an extended warranty is better for a new car or a used car. It’s whether the particular contract fills a meaningful gap for the vehicle you’re buying.
For a used car, work through these questions:
- What warranty coverage comes with the vehicle?
- Does the service contract add coverage or duplicate it?
- Is the vehicle eligible under the contract’s restrictions?
- Are the repairs you’re concerned about covered?
- Can you meet the servicing and maintenance requirements?
- Does the term fit how long you expect to keep the car?
The FTC says prices depend partly on whether a vehicle is new or used, but that doesn’t establish which purchase offers better value.
Saving for repairs remains an alternative in either case. The CFPB suggests setting aside money each month for maintenance or repairs. Compare that approach with the contract’s price and the expenses you’d still have to pay yourself. Don’t change your vehicle choice just to make an add-on contract seem worthwhile.
What should you do before deciding?
Read your existing warranty, identify any coverage gap, and compare a written service contract with the option of saving that money for repairs.
Keep the decision separate from pressure to finish the car purchase. Ask for the complete contract, total price, deductible rules, coverage dates, exclusions, and cancellation terms.
If you’re reviewing offers, the car warranty plan comparison page is another reference. The written contract should still drive your decision.
If you can’t explain what the contract adds beyond your included warranty, hold off. Buying a new car doesn’t create an obligation to buy an optional service contract.
Frequently Asked Questions
Do I have to buy an extended warranty to get a car loan?
Generally, no. The CFPB’s guidance, reviewed in March 2024, says an extended warranty generally cannot be required for an auto loan. Ask whether your loan papers include optional products. If you’re pressured to buy them, you have the right to walk away and look for another dealer or lender.
Can I buy an extended warranty after buying my new car?
Yes, you may be able to buy a service contract after purchasing the car through a dealer or an independent seller. However, products can have eligibility restrictions. Ask about those restrictions, the coverage start date, and any overlap with your manufacturer’s warranty before assuming a later purchase will meet your needs.
Will using an independent repair shop void my manufacturer’s warranty?
No. The FTC says a dealer cannot deny your manufacturer’s warranty coverage simply because someone else performed routine maintenance or repairs. A separately purchased service contract is different: it may specify where covered work must happen or require preapproval. Check which type of coverage you’re relying on before authorizing work.
Is saving for repairs better than buying an extended warranty?
It can be, especially if a contract duplicates existing coverage or excludes the repairs you’re concerned about. Saving gives you funds for maintenance as well as repairs, but you’re limited to what you’ve put aside. Compare that with the contract’s price, deductible, exclusions, and the length of time you’ll keep the car.