After purchasing, the new vehicle comes tagged with a slightly confusing term: extended car warranty. This extra protection layer can prevent unexpected repair crashes, but understanding its intricacies can seem challenging.
This guide will cover the complete A-Z of extended car warranties, imparting everything you need to know.
Understanding Extended Car Warranty
What is an Extended Warranty?
An extended car warranty is a service that provides coverage beyond the manufacturer’s warranty duration.
A new car warranty covers specific repairs and replacements within a set limit (3 years or 50000 km).
Once this warranty expires, an extended warranty takes over offering similar protections for an extended period with:
- Primary Coverage: Engine, and electrical components.
- Optional Coverage: Roadside assistance, labour costs, and reimbursement.
Key Features of Extended Car Warranty:
- Cost Structure: Varies from lump-sum payment to monthly instalments. A deductible is required for repairs.
- Flexibility: You can customize the duration and scope of coverage to fit your needs.
What is Covered By an Extended Car Warranty?
An extended car warranty can cover a wide range of issues, but it’s crucial to understand what’s included. Typically, it includes:
- Engine and transmission repairs
- Electrical system ( Alternator, starter motor, power windows, etc)
- Labour costs for complicated repairs
- Some plans offer additional perks like roadside assistance and rental coverage
What Is Not Covered in an Extended Car Warranty?
While extended warranties provide extensive coverage, certain items typically remain excluded, including:
- Routine maintenance (oil changes, tyre rotations)
- Wear and tear components (brake pads, clutches, suspension)
- Modifications and damages from accidents
Advantages of Extended Warranty for Cars
- Repair Savings: An extension covers all repairs and major component replacements.
- Increased Resale Value: A vehicle with an active warranty gets a higher resale price.
- Convenience: Extended warranties include perks like roadside assistance and reimbursement.
Demerits of Extended Warranty for Car
- Higher Upfront Costs: Extended car warranty increases the cost of the vehicle.
- General Exclusions: Parts involving general wear and tear are excluded from extended warranty plans.
- Underutilisation: Coverage will go unutilised if the vehicle doesn’t face major issues.
Extended Car Warranty Price in India
The cost of an extended car warranty varies depending on several factors in India:
- Vehicle Brand & Trim: Luxury vehicles have higher costs than commercial models.
- Coverage Term: A 2 year plan will be cheaper than a 5 year extension.
- Dealer or Third-Party: Manufacturer warranty is priced higher but more comprehensive than third-party warranties.
Average Car Warranty Price in India
| Warranty Duration | Price (INR) | |
| Hatchback | 2 years | ₹10,000 – 20,000 |
| Sedan | 3 years | ₹25,000 – 35,000 |
| SUV | 5 years | ₹40,000 – 50,000 |
| Luxury Cars | 5 years | ₹1,00,000 – 2,00,000+ |
When to Purchase an Extended Warranty
You can opt for an extended car warranty at multiple stages:
- At Purchase: This is the best time to get an extension as you can negotiate better deals.
- Before Expiration: Some manufacturers allow the purchase of an extended warranty with the ongoing standard warranty.
Differences between New Car Warranty and Extended Warranty
| New Car Warranty | Extended Car Warranty | |
| Coverage | Included with the vehicle purchase.
Begins as soon as you purchase the car |
Optional, can be customised.
Can opt for this plan before the standard warranty plan expires |
| Cost | Included in the car’s price. | Requires an additional upfront payment. |
| Duration | 2 to 3 years or a fixed mileage limit. | Can be extended by 2-5 years. |
| Coverage Scope | Limited, may not cover all parts. | Broader coverage, customisable options. |
Extended Warranty vs Insurance: Key Differences
| Extended Warranty | Car Insurance | |
| Provider | Offered by manufacturers or third-party entities | Offered by insurance companies |
| Cost | One-time payment or installments | Annual premium payments |
| Mandatory or Optional | Optional | Mandatory |
| Covers Faulty Components | Yes | No |
| Damages Covered | Mechanical & electrical failures | Accidents, theft, and natural disasters |
| Theft Coverage | No | Yes |
Factors to Consider Before Buying Extended Car Warranty?
Deciding whether an extended warranty is needed depends on various factors:
- Usage Duration: If you plan to keep your vehicle for more than 5 years, an extended car warranty shields you from expensive repair bills.
- Resale Plans: An extended warranty will help get a higher resale value.
- Vehicle Reliability: Newer models are more reliable. However, as vehicles age, repair costs increase.
- Driving Conditions: If you drive in rough terrains or frequently travel long distances, extended coverage can be a lifeline.
Others Also Read: Behind the Strong Resale Value of Certain Car Brands
Final Reflections
An extended warranty is a shield that can save you from unexpected repair expenses, especially as your vehicle ages. It can save you thousands making your investment worthwhile even if it seems a non-essential spend.
Check your driving habits, and budget to make your final decision. Remember, it’s about securing protection and peace of mind during journeys.
Frequently Asked Questions
- When is the best time to buy an extended warranty?
The best time is at the point of vehicle purchase to lock in lower rates.
- Should I purchase an extended warranty on my new car?
If you consider a new vehicle purchase, an extended car warranty will be negotiable, lowering prices. It will be a wise investment if you:
- Plan to keep the car long-term.
- Use it extensively (especially a diesel model with higher repair costs).
- Want hassle-free ownership with zero repair worries.
- How long does an extended warranty last?
The average duration extends from 2 to 5 years or 20,000 to 100,000 km.
- Does the extended warranty cover engine replacement?
Yes, extended warranties cover major repairs, including engine overhauls.
- Is a car battery covered under an extended warranty?
Typically no, until you have opted for specific coverage that includes batteries.
- What is the one thing the extended warranty will not cover?
Regular wear and tear items such as brake pads, clutches, and tyres are not covered.
- Does a car insurance plan and car extended warranty offer similar benefits?
No, both offer different coverage benefits. An extended vehicle warranty is limited to the car, whereas an insurance policy provides broader coverage.
Also Read: The Role of Coolant in Car Engine Health and How to Maintain It
