Earning my CERTIFIED FINANCIAL PLANNER™ designation prepared me to confidently discuss topics like estate planning, insurance, and portfolio management. It did NOT prepare me to discuss car repairs or if the extended warranties the dealerships encourage are worth the big bucks.

However, a car purchase is a major financial event that most of us will deal with again in the future. Therefore, I want to talk about it! Just know that this blog is based much more on my personal opinion than most of my other posts!

So, here we go:

Are the extended warranties that dealerships want to sell you worth the price?

Short answer – I don’t think so.

If you only plan to own the car for a few years, the likelihood of your necessary repairs costing more than the warranty is slim. So, if you are a short-term car owner, the warranty is generally a no go.

What if you plan to keep the car for 5+ years? Isn’t there more of a chance that something will go wrong with the car then?

Yes… But also no.

Yes, there will be expenses and repairs related to routine maintenance. Belts get old, spark plugs need replaced, brakes need new pads, etc. Just remember, routine maintenance costs are not covered by the extended warranty anyway!

It’s often the case that when a car has issues due to a manufacturing error, it becomes apparent within the first few years of ownership. So, the costs that would be covered by the extended warranty will often arise during the normal manufacturer’s warranty. There’s no need to have double coverage.

How do you politely turn the warranty down or negotiate a lower price?

Working as a car salesman or saleswoman is an honorable and complex job, and the role is necessary in our society. The dealership’s finance department who sell these warranties is also essential! ! This does not mean you have to buy everything they want you to, just like you wouldn’t buy every single channel your cable guy offered you.

How do you say no to a salesperson when they speak so highly of the warranty and are just doing their job by encouraging you to buy?

Well, sometimes it’s easy. Sometimes it’s really, really not.

My car & warranty buying experiences:

Car #1: We stated we weren’t interested in purchasing the warranty. At this time, we weren’t at all familiar with car extended warranties… we just knew we weren’t “warranty people.” Whatever that means. I don’t remember much push back. The sale moved on smoothly.

Car #2: This was the first car we purchased for me. My sweet husband had a “we want the best for you” attitude, so we purchased the extended warranty. I’m not saying it was a mistake. However, we never used it and determined we would likely not purchase again. Overall, it was a positive learning experience.

Car #3: The gentleman presented the warranty enthusiastically and thoroughly. Truly, he was excellent at his job, and we told him so. We did kindly inform him that we recognized the potential value of the product, but we were not interested in purchasing.

Within 10 seconds, he “gave us the employee pricing” and sliced the cost of the warranty in HALF!!

We weren’t trying to negotiate. I didn’t even know a warranty price was negotiable!

Still, we stated that we appreciated the discount but didn’t want to purchase. The gentleman then switched gears, appearing baffled that we wouldn’t want such a great deal. It seemed he tried to make us feel foolish for missing out. He then left the room to “inform his manager we weren’t buying” since this rejection was supposedly SO unusual. (FYI, it’s NOT unusual. Many people don’t buy).

Really, I think he left the room to give the “weak link” … a.k.a. me … the opportunity to convince my husband that I wanted the warranty. However, that didn’t happen. If anything, the slight condescension made me even more adverse to buying.

He came back, asked again, and then wanted to know our exact reason for not buying. We told him. He then reluctantly moved on with the rest of the sale. Honestly, I left feeling like he was angry with us. Don’t worry though… it didn’t squelch our excitement over our new baby-safe car!!

So, what were our personal reasons for not buying?

#1 We think that the odds of a manufacturing error arising in a used car is unlikely. It’s already been put to the test. Also, it still has 2 years of normal warranty on it, so we don’t need double coverage.

#2 We can self-insure. A warranty is a type of insurance! We decided our emergency savings account is suitable to cover the cost of repairs, so we chose to carry the risk ourselves rather than buy insurance.


You may be very knowledgeable on the topic of vehicles, and you might have a very different opinion than me. You also might have a lower tolerance for risk, causing you to want to buy the “insurance,” a.k.a. the extended warranty. That’s fine! If you have other good reasons to buy that I didn’t discuss here, email me and tell me! I always love learning something new.

If you’re interested in other sources that helped me arrive at my conclusions, check out these articles below:

Consumer Reports

– US News

– MarketWatch