Unfortunately, not all extended warranties are created equal. And some extended auto warranty providers are vastly better than others when it comes to coverage, customer service, and processing your claims.
If you want to avoid a bad extended car warranty, do your research and steer clear of providers whose policies and practices include any of the following red flags.
The warranty is too expensive (or too cheap!)
Pricing for an extended vehicle warranty will change depending on the level of coverage you opt for and the nature of your situation; factors like your vehicle’s make, model, year, mileage, and condition can all influence what an extended auto warranty provider will charge. So make sure you get a few quotes and compare the pricing of each contract.
If one particular provider is far more expensive than the others, it might indicate that the warranty provider is overcharging you for extended vehicle coverage.
Similarly, if you notice that a provider’s quote is surprisingly inexpensive compared to other quotes, it may be because the coverage is lacking or the policy includes too many exclusions.
For context, GuardTree subscription-based pricing starts at $49.95 a month. Use our price calculator to see how much an extended warranty would cost you.
As a general rule, a used car warranty shouldn’t cost more than you expect to spend on repairs during the length of your contract.
The contract is difficult or impossible to cancel
Some providers make it difficult to cancel an extended warranty plan while others won’t let you cancel your contract at all. If you think you may want to cancel your warranty before it expires, a difficult (or non-existent) cancellation policy is a red flag.
Because GuardTree’s extended coverage is subscription based, you’re never locked into a contract. You can adjust or cancel your monthly subscription whenever you want. And there’s no long-term commitment.
Read more: Can I cancel my GuardTree subscription?
The policy includes some deal-breaking exclusions
It’s normal for extended car warranties to include certain exclusions—things like pre-existing conditions, vehicle appearance, and routine maintenance are almost always not covered by an extended auto warranty. But it’s a red flag if the policy also includes specific exclusions that are deal breakers for you.
For example, let’s say you drive an electric vehicle and you come across a policy that excludes coverage for electric vehicle components. Because of this exclusion, that extended car warranty wouldn’t be right for you.
If you notice that an extended car warranty excludes specific components or types of repairs that could affect you in the long run, avoid signing up with that provider altogether.
The provider’s customer service is poor or non-existent
If you’re considering an extended car warranty from a broker or reseller, double check that they offer good (i.e. available, helpful, responsive!) customer service. If a warranty provider isn’t easy to contact when you have pre-sale questions, they probably won’t be easy to contact when it’s time to make a claim.
When we launched GuardTree, we noticed that quality customer service was lacking in the majority of extended car warranty providers. That’s why we provide a dedicated team of claims specialists that our customers can reach out to at any time for help.
Got a question for our team? Get in touch here.
The claims process is complicated or unclear
Before you sign up for an extended auto warranty, assess the provider’s claims process via their website. A good rule of thumb to follow here is: if the claims process doesn’t look fast, simple, or easy, don’t bother.
At GuardTree, we’ve intentionally designed our 4-step claims process to be quick and simple. You can take your vehicle to any licensed repair shop of your choice. And to help you avoid extra hassle, we pay your repair shop directly.
There are restrictions on where you can go for repairs
Some extended car warranties restrict where you can have your car repaired, while some policies don’t include any repair-shop restrictions at all. For example, with a GuardTree extended car warranty you can take your car to any licensed mechanic or repair shop in Ontario.
Having restrictions on where you can go for repairs might not be a huge issue if the mechanics you can use are located close to where you live or work. But it could become a huge hassle if you’re restricted to using a repair shop that’s a huge inconvenience to get to.
Double check where you can (and can’t) take your car in for repairs in the warranty’s policy documentation can save you from having to deal with future inconveniences.
The warranty provider isn’t backed by a reliable insurer
Reputable car warranty providers are often backed by larger insurance companies. It's a red flag when a warranty provider is backed by a poorly rated insurance company. And it’s an even bigger red flag when a warranty provider isn’t backed by a reliable insurance company at all.
To determine a provider’s reliability, you’ll need to do some online research to assess the reputation of who’s backing the warranty.
For example, GuardTree is backed by Trisura Guarantee Insurance Company and trusted Canadian auto protection names. Trisura is an A-rated (excellent) organization operating for more than 15 years and incorporated under the Insurance Companies Act (Canada). In short: with GuardTree, your car is protected by the best.
The warranty provider has too many negative reviews
If an extended car warranty provider has too many negative online reviews, that’s a red flag. Online forums, Reddit, and Google reviews can help you determine if the company has a solid reputation amongst its existing customers.
It’s a good sign that you’ve found a reputable provider when other consumers are happy with the company. If most of the feedback is negative, you should probably steer clear of the provider entirely.
Get more for your money. Get GuardTree.
Looking for an extended car warranty for your vehicle? GuardTree is a comprehensive, monthly extended warranty subscription that you can cancel at any time.
GuardTree provides protection from most major electrical and mechanical repairs and offers additional benefits like roadside assistance, car rental, and trip interruption costs.