The Truth About Buying Extended Vehicle Protection

When it comes to automobile protection there is such a wide range of details and factors that could intimidate most people. You could run the risk of being deceived with such matters as well. There are far too many companies to go through, each offering warranties, even on in the online markets and there is little guidance from anyone with an insider’s knowledge of the industry.

Dealership, the dealer is handing auto keys to a young couple, they are excited, cars standing in the background

Sales representatives from car dealerships and third-party brokers tend to sell extended warranties on commission meaning that the more you spend on obtaining a policy and the quicker you make your decision to buy is all in their favor. They tend to assume that if your decision is to “think about it” then they’ve probably lost the deal. Due to this understanding (or misunderstanding, such that it is), many are not shy about saying what they think they need to say to close the sale right now, even if that means saying things that might obscure facts.

So yes, unfortunately, Automobile protection is an industry where buyer confusion is common and many consumers end up with less than they intended to get paying more than they wanted. They may not find out until they are literally down the road  it comes time to actually use the coverage and it’s not what they expected.


Truth is “singular” but when it comes marketing and sales, things get a little obfuscated. The following are some of the common lines you’re likely to hear from dealers and sales people willing to stretch the truth (or even tell outright lies) to sell you their particular vehicle service contracts, also known as extended auto warranty products:

  • “The best place to buy a service contract is from the dealership.” This may have been true years ago, perhaps as far back as pre-internet, but today it’s absolutely false. Besides being expensive, dealerships tend to tack on additional commission charges to coverage you can buy directly from the provider. Dealership warranties often restrict your ability to have your vehicle repaired at the facility of your choice as well. The truth of the matter is that dealerships are third-party resellers of policies and they will always charge more for a policy than it costs when purchased directly from the provider for whom they are acting as the “middle man.”
  • The only time your car will qualify for an extended warranty is when it’s being purchased.” This is simply not true. Policies can be purchased any time, often when a vehicle has up towards 100,000 miles on the odometer or are about 10-years old (whichever comes first). Service contracts are even available after original manufacturer’s coverage has expired, although this will generally cost more than if you had taken the coverage while the original coverage was in force.
  • “By taking their service contract offering at the time of your vehicle purchase, it will help you qualify for or save money on vehicle financing.” This is also untrue as financing qualification is determined by vehicle price, amount of down-payment (or trade-in) and your credit score. If a sales rep says they can get you a better interest rate if you add on extended coverage, you should realize that a more attractive interest rate absolutely not related to purchasing add-ons such as a vehicle service contract. Remember that if you’re told that the vehicle you’re purchasing automatically comes with extended coverage understand that this add-on coverage has already been factored in and will automatically increase the vehicle’s sales price.

These falsehoods used to sell automobile warranties are indicative as to the qualities of the company with whom you’re dealing with. While there is obviously some understood leeway to the relationship between buyer and seller, it is important to go into transactions with the best advice and information available. No one wants to ever “settle.” In fact, what people consider to be the “best” auto dealerships and insurance/warranty providers often take professional pride in the ethics and standards of the deals they present. Like any other good or service, you should always consider your options locating optional sources for warranties, customizing your warranty, and finding the best car warranty companies and pricing from reputable sources from places like Discount Warranties. Whatever road you take, the wheel is in your hands.