Picking Coverage and Deductibles
As with car insurance, you can choose extended warranty plans with different deductibles and levels of coverage. Extended warranties typically offer coverage tiers, and three or four are common. Generally, the first level pertains to the powertrain, while the next adds coverage for more components. The highest-level warranty provides comprehensive coverage, which includes electrical and infotainment systems that can be expensive to fix.
When you're comparing the levels of coverage, pay particular attention to what each one excludes. We recommend the higher level of coverage if you can afford it. This way you're less likely to be caught off guard by a repair that wasn't covered.
Warranty deductibles can range from zero to about $250. When you're shopping, do the math to see whether a more expensive plan with a lower deductible might make more sense for you. It comes down to how much you want to pay up front and how many claims you might have during the warranty period, Weintraub said.
Let's say you opt for a warranty that's priced at $1,500 and charges a $250 deductible per claim. If you make six claims during the warranty period, you'll pay $1,500 in deductibles. That's $3,000 in overall warranty costs.
Or you could choose a higher upfront warranty cost of $1,850 and a lower $100 deductible per claim. If you make six claims, you'll pay $600 in deductibles. That's $2,450 in overall warranty costs.
Finally, if you are considering a third-party warranty company, be aware that some require owners to pay the repairs out of pocket and get reimbursement later.