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Does your luxury car need an extended warranty?

Like most insurance policies, an extended warranty is something you pay for in the hope that you’ll never need to use it.

By LLM Reporters  |  March 5, 2022
White 2011 BMW 3 Series Coupe The fifth generation 3 Series car fast mooving on street in Dubai
Image Credit: Grisha Bruev/

When it comes to looking after your luxury items, there’s nothing worse than the fear of something going wrong, and unfortunately cars are one of those items that pose a greater risk of this. for luxury car lovers, nothing is too much when it comes to caring for and protecting your prized possession and so an extended warranty might be just what you need to ease your worries. The best extended car warranty for your exacting needs can be difficult to find, so read on to learn what you can expect from an extended warranty, why you might choose one, and the costs and benefits of doing so.

What is an extended warranty?

An extended warranty is simply extra coverage protection you can purchase after your factory or dealership warranty has expired. Most new and used car purchases come with a warranty to cover malfunctions. These last for a particular amount of time (six months to five years) or a certain number of miles after the purchase of your luxury car. An extended warranty is not insurance, but it does come with a premium. Warranties cover mechanical breakdowns, interior systems, and some repairs but do not cover damage in the event of an accident or vandalism.

When you might need an extended warranty

If your luxury car breaks down or has an internal issue, it can be expensive to repair. Let’s say you have a Jaguar extended warranty; all those costly repairs are covered. This doesn’t mean you must have an extended warranty or even that it’s the best idea, so carefully weigh all the pros and cons of an extended warranty before signing on the dotted line.

Young caucasian couple choosing new car for buying while walking along row of autos outdoors, widescreen
An extended warranty is simply extra coverage protection you can purchase after your factory or dealership warranty has expired

Consider how often do you trade in your vehicle. If it’s less than every five years, chances are you will only need your factory warranty. If keeping your car for the long haul is more your style, an extended warranty might pay for itself in the costs of repairs. Next, investigate the costs of repairs an extended warranty covers to see if you’re likely to use it.

Sometimes the cost of repairs is prohibitively expensive, especially for luxury cars, making the warranty premiums well worth it. If, however, the cost of covering those repairs would require little out of pocket, an extended warranty might be throwing money away. You should know which features your extended warranty covers and what the typical cost of repairs will be for your luxury car. When you do a comparison, it should be easy to see if the extended warranty is worth the money or not.

How much does it cost?

Not all extended warranties are created equal. If you’re driving a luxury car, expect the warranties to be a bit more expensive, but then again, so are the repairs and service. Factors that affect the cost of an extended warranty are length of coverage, age of vehicle, repairs covered and vehicle condition.

Sources say extended warranties can cost from a little over £1,250 to £3,500, expect more on the higher end when you drive a luxury car. You can get a plan that has a deductible and lower premium or pay it all upfront depending on where you get your extended warranty. If you’re shopping from a dealership, expect to decide on your extended warranty when you purchase the vehicle or before the factory warranty runs out. After-market extended warranties are also available from several companies and can traditionally be purchased any time.

car dealership: woman receiving car key from salesman
Like most insurance policies, an extended warranty is something you pay for in the hope that you’ll never need to use it

What it covers

If you expect serious engine trouble or internal issues, an extended warranty might be perfect for you. Extended warranties do not cover things like oil changes or other routine maintenance. Depending on the plan and company offering the extended warranty, you can expect coverage on things like the engine, transmission, brakes, and electronics. Tires, paint jobs, and normal wear and tear are typically not covered under extended warranties. Your warranty can also include extras like free towing or roadside assistance.

Pros and cons

The obvious pro to having an extended warranty is not having to shell out for expensive repairs to your luxury car. The biggest downside is that you might never use it and end up spending out for nothing but peace of mind in return. Only you can decide whether an extended warranty is worth the cost for you.

Evaluate your type of vehicle and how much you expect to pay for repairs over the next few years you. Be sure to investigate everything a warranty covers, how much overlap there will be with your factory warranty, and what the repairs would cost out of pocket. Only then will you know if you really need an extended warranty for your luxury car.