Extended Warranties: Worth It or Total Scam?

"If you find a better deal, I’ll eat my steering wheel!"

- Chase | Car deal dad joke writer | Not very good at it...

Week 9 – Extended Warranties: Worth It or Total Scam?

Welcome to Week 9 Deal Guard nation!

You’ve made it through the sales floor, the trade-in dance, the finance jungle, and now... they hit you with the big one:

"Do you want to add an extended warranty?"

This is where they try to seal the deal with one last upsell.

The problem? It’s not always clear if it’s actually worth it—or just another way to sneak a few grand onto your bill.

Let’s break it all down.

Tactic #9: Don’t Buy a Warranty You Don’t Understand

Why This Matters

Extended warranties sound like peace of mind, right? Who doesn’t want protection?

But the truth is:

• Most people never use them. I've bought 6 and NEVER used it!!! It's just one case study but thank about the money I put in. I could be retired now! Yikes!

• Many repairs they cover are already under the regular factory warranty.

• And the price is often WAY inflated by the dealership so we'll talk about shopping around.

Sometimes they’re good. Sometimes they’re junk.

Let’s learn how to spot the difference.

Step-by-Step: How to Evaluate an Extended Warranty

Step 1: Know What’s Already Covered

Every new car comes with:

• Bumper-to-bumper warranty (usually 3 years/36,000 miles)

• Powertrain warranty (usually 5 years/60,000 miles)

That means if your car is brand new, most big problems are already covered.

You don’t need extra coverage on top of that—yet!

Step 2: Get the Real Name and Coverage Details

Ask the finance manager:

“Can you show me the brochure or contract for this warranty?”

Then look for:

• What’s included?

• What’s excluded?

• What’s the deductible?

• Can you use any repair shop, or only certain ones?

• Is it transferable if you sell the car?

• Can I get a pro rated refund if I sell the car or just want some money back?

If they can’t answer clearly or won’t give you a copy to read, big red flag.

Step 3: Price Shop the Warranty Outside the Dealer

Dealers mark up extended warranties like crazy. I know because I use to sell them.

But you can often buy the exact same coverage from a third-party provider for hundreds or thousands less.

Some reputable companies include:

• Endurance

• CarShield

• Olive

• Manufacturer-backed plans (Toyota, Honda, etc.) from other dealers

Ask the dealership:

“Is this a manufacturer-backed plan, or a third party?”

Manufacturer plans are usually better—easier to use, more widely accepted.

Step 4: Do the Math

Ask:

• What’s the cost of the warranty?

• What’s the length of coverage?

• What’s the deductible per repair?

Then ask yourself:

• How long will I really own this car?

• How much would a major repair actually cost?

Example: If the warranty is $2,500 and the average repair costs $600, you’d have to break down at least 4-5 times to break even.

Step 5: Don’t Roll the Warranty Into the Loan

This is sneaky. Dealers will offer to “wrap” the warranty into your monthly payment.

Sounds easy. But it means:

• You’re paying interest on the warranty = nooooooooooooooooooo way!

• The cost is hidden in the loan total

Always pay for it separately if you decide it’s worth it.

By the way, you can always get a warranty later.

Example: I have a cool low mile Cadillac. Its over 14 years old and I have a bumper to bumper warranty on it. The car has 30K miles and drive great so I drive around with my wife and we enjoy it and got the warranty 8 years after purchasing it.

Pro Tip Reviewed: Wait Until Later

You don’t have to buy the extended warranty the day you buy the car. Most providers let you add one anytime before your factory warranty expires.

That gives you time to:

• Shop around

• Research your model’s reliability

• Make a smart, low-pressure decision

Concierge Tip: We Review Every Warranty Line-by-Line

Not sure if it’s a deal or a ripoff?
That’s why we’re here.

Our car deal concierge service at Deal Guard:

• Breaks down what’s covered (and what’s not)

• Checks pricing against national averages

• Finds better options if needed

We protect your budget and your sanity.

What to Avoid

• Don’t buy a warranty just because “you never know.”

• Don’t skip the fine print.

• Don’t finance it with your car loan.

• Don’t trust verbal promises—get it in writing.

Recap: Extended Warranty Smarts

1. Know what your factory warranty already covers

2. Read the real coverage and exclusions

3. Compare prices outside the dealership

4. Do the math—will you really need it?

5. Avoid rolling it into your loan

6. Ask the dealer to separate any insurance product and show price for each.

7. Once you have prices on products, ask for what their cost is and say you'll buy at a 10% markup as an example.

8. What away if negotiation is not an option.

Next week we’ll dive into car insurance—what coverage you really need (and what’s just fluff).

You’re learning the game one layer at a time. 🔥

—

Want help breaking down a warranty offer?
We’ll read the fine print, call out the nonsense, and help you decide what’s really worth it.

Go to GETDEALGUARD.COM TO LEARN MORE

Let us deal with them for you.
Our car buying concierge service confirms every detail and protects your time, money, and sanity.

Our concierge car buying service saves you hours of stress and thousands in bad deals. Your time is valuable—let’s protect it together.

Go to GETDEALGUARD.COM TO LEARN MORE

See you soon,

Chase Jordan

#carbuyingtips #extendedwarrantyadvice #cardealconcierge #carnegotiationstrategy #carshoppinghelp #week9