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Extended Car Warranties: Manufacturer’s or Independent Company?

Moneymagpie Team 9th Aug 2022 No Comments

Reading Time: 3 minutes

You’re considering getting an extended warranty for your car. Your dealership has made you an offer, but before you opt in, you’d like to investigate your options. Will a third party warranty offer you a better deal? Of course, the answer to that depends on the warranty in question. To be absolutely sure you’re making a fair comparison, look through the full agreements carefully to see what is covered, what coverage costs, and most importantly, what’s excluded.  

In general, however, independent companies do offer the best extended car warranty deals. Here’s why you’re likely to find that your dealership’s extended maintenance plan isn’t necessarily the most favorable option. 

They Need to Be Competitive, so they Are Competitive

Ask yourself why there are independent extended warranties out there. The answer is fairly simple. On investigating automakers’ extended warranties, independent companies decided that they can compete against the standard dealership offer. It may seem strange that an independent company can offer better vehicle guarantees than its makers can, but it’s a simple fact.  

They Offer Greater Flexibility

The cost of repairs through a dealership is always higher, and extended warranties from dealerships usually stipulate that you must use their workshops. That can be incredibly awkward because of the strict limitation of your options. What if the nearest dealership isn’t necessarily “near?” What if there is currently a long queue of repairs ahead of yours? While independent providers work through a list of approved repairers, you’re likely to have more options and greater flexibility when choosing where to take your car when repairs are needed. 

They Offer the Same Benefits as Your Dealership’s Warranty and Possibly More

A really good independent extended warranty will give you all the cover that your dealership’s warranty would, and it may even cost less and offer more. Compare your options by summing up the cover and look for extras. For example, lockout assistance is an extra you wouldn’t ordinarily expect, but some packages offer it. Two flat tires and stuck by the roadside? It isn’t a mechanical failure, but flat tire assistance is also offered in some extended warranties. All these extras aren’t just handy when you need them: they will even improve the resale value of your car, so think it through thoroughly. 

They Have Happy Customers

Better Business Bureau (BBB) ratings are important to look at when you want to determine the reliability and reputation of the firms that you want to do business with. While not all companies offering extended car warranties have great reputations, a great many of them do. It’s just one more factor to look at when deciding on a provider for your extended warranty.  

You Probably Can do Better Than the Automaker’s Warranty

As we’ve noted, it’s a competitive market out there, and not all independent extended warranty packages are created equal. On a balance, however, there’s an extremely good chance that you’ll find a better deal through an independent company. If you couldn’t, that company probably wouldn’t exist in the first place! 

If you’re serious about comparing offers, start developing a spreadsheet in which you can capture all the features each warranty offers along with any other elements that are important to you such as BBB ratings. The warranty that’s right for you might be easier to spot than you expected it to be.  

Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. 

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Jasmine Birtles

Your money-making expert. Financial journalist, TV and radio personality.

Jasmine Birtles

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