Extended Warranties Explained

Q: What is an extended warranty, and when can it be smart?

A: An extended warranty can be smart — but dealers mark them up heavily.

Q: What is the real cost of an extended warranty?

A: Real cost (wholesale or direct from providers): $1,000–$2,000 (depending on coverage level, vehicle make, mileage, and term—e.g., 5 years/60,000 miles).

Q: How much do dealers typically charge for extended warranties?

A: Dealer price: $2,000–$4,000 (sometimes more, with markups of 100–500%).

Q: What are some notes or nuances about extended warranties?

A: These are technically "vehicle service contracts," not true warranties, and their value depends on the car's reliability (e.g., worth it for luxury or high-mileage vehicles, less so for Hondas/Toyotas). Average quotes in 2025 are around $1,200–$1,600 per year of coverage, but monthly breakdowns make it $80–$130. Dealers buy them wholesale and add profit, but you can negotiate 20–50% off or buy direct from third parties (e.g., Endurance or CARCHEX) post-purchase for savings. Read exclusions carefully—many don't cover wear-and-tear items—and consider manufacturer-backed options for better claims. Prices rise after initial purchase (e.g., 10–20% more after 30 days).

Q: How does VINdicated help with extended warranties?

A: It aligns with flagging overpriced add-ons. If this is implied, VINdicated would call out heavily marked-up extended warranties to avoid paying excessive costs.)