As a used car owner, your vehicle is typically no longer protected by a manufacturer’s warranty, which means if an unexpected mechanical breakdown were to occur, you would be liable for the expenses.  

One way to protect your wallet from the costs of vehicle repairs is to purchase an extended car warranty. This article will help you determine whether you should consider buying an extended car warranty for your used car by answering these questions: 

What is an extended car warranty?

An extended car warranty is a financial protection product that helps cover the costs associated with most mechanical breakdowns. Extended car warranties are optional policies that one may consider purchasing in order to protect their car after their manufacturer’s warranty expires (typically after 5 years).  

Who is the ideal candidate for an extended car warranty?

Before you start shopping for plans, there are some key considerations that you should make to see if you’re the ideal candidate for an extended car warranty:  

  1. Your vehicle’s model year and mileage – Typically, cars will be covered by a manufacturer’s warranty for their first five years of life. After that, expenses for repairs are up to you to pay. The ideal candidate for an extended car warranty would be a car that is over 5 years old but is still within the extended warranty provider’s age and mileage limits (this varies between providers, so be sure to check this carefully).   
  2. Your budget – Next, consider your own budget for repairs. If you have money set aside in an emergency fund, will it be enough to cover the most common and expensive vehicle repair costs 
  3. Your extended warranty options – If you’ve gone through steps one and two and think that an extended car warranty could be right for you, you’ll next need to find out which extended warranty providers there are available to you. Depending on where your car is licensed, you’ll have different options. Compare third-party extended warranty providers in Canada. 

Why would an extended car warranty be worth the cost?

The cost of an extended car warranty varies depending on the provider that you choose and the plans that they offer. Many extended car warranty providers in Canada require an upfront payment and a long-term contract. However, GuardTree offers Canada’s first monthly subscription based extended car warranty with four different pricing plans 

Vehicle repairs can be very expensive and become more frequent the older your car gets. To give an idea of what typical costs for repairs can be, check out this visual below: 

Vehicle repair costs can add up

It’s always nice to have a rainy-day fund to help you offset some of the expensive car repair costs that add up as a used car owner, but the fund is often too low to cover everything. On top of the repair costs, used car owners may have to pay extra for things like roadside assistance, car rentals, and lodging (which are covered by some warranty companies). To help you see how someone would save money with an extended car warranty, we’ve broken down the math in this article 

Should I buy an extended car warranty?

If you’re still going back and forth to decide if an extended car warranty is the right choice for you, we’ll weigh the pros and cons for you: 

Pros of buying an extended car warranty:
1.You save money should a mechanical breakdown occur. The first and most obvious benefit to purchasing an extended car warranty is that it provides you with  financial protection in the event of a mechanical breakdown. Instead of breaking the bank every time your car needs a repair, you get to know you're saving money with your extended car warranty.
2. You can drive with peace of mind. When driving an older car, you can often feel like you’re driving on borrowed time, especially with used cars that have had previous owners. Having an extended car warranty is like carrying an umbrella with you when you don’t know how the weather will be. Having it with you allows you to enjoy your life stress-free knowing that you’ll be covered when a storm arrives
3. You’ll often receive member benefits. Depending on the extended car warranty provider that you choose, you’ll often be offered some added benefits for being a member. GuardTree subscribers, for example, receive roadside assistance, trip interruption, and car rental compensation at no extra cost.
4. You may get another bonus. Depending on your warranty provider, they may offer more bonuses. For example, with GuardTree, subscribers can feel good about their impact on the planet because GuardTree offsets each member’s carbon emissions every month.  

Cons of buying an extended car warranty:
1. You could get locked into a long-term contract. As mentioned earlier, many providers who don’t offer subscription-based extended car warranties require a large payment upfront for your plan (usually one large annual fee). This could cause issues if you plan to trade in your car, if you end up paying more for the warranty than you need, or if your budget is more suited for smaller payments.
2. You could have an issue with a vehicle component that is not covered by your warranty. Make sure your provider is transparent about what is and is not covered by your extended car warranty. It is typical for providers not to cover things like pre-existing conditions, appearance protection, and routine maintenance costs, but a good extended car warranty will cover powertrain, electrical, mechanical, and software related parts.
3. You could run into a shady provider. Unfortunately, some customers have had bad experiences with providers. We recommend checking out the provider’s reviews and online presence before you buy. If you want to learn more about what to look out for, see this full list of red flags of bad extended car warranty providers.

So, now I know I want to buy an extended car warranty. How do I get started? 

Make sure you’ve done your due diligence in looking out for red flags. Read this for more in-depth understanding of what makes a good extended car warranty 

Next, it’s time to research the providers available to you. Click here to see a comparison of extended car warranty providers in Canada 

Each provider will have a different process when it comes to registering an extended warranty plan for your car. Typical providers will get you started by: 

  • Providing your vehicle’s VIN number (learn how to find your VIN number).
  • Choosing the plan that you want, which determines what parts are and aren’t covered, the length of your contract, and any other benefits that may come along.

It’s always best to be an informed customer. Make sure you’re happy with your contract’s terms and conditions before you sign.  

Get more for your money. Get GuardTree.

Looking for a reputable third-party warranty with comprehensive coverage and awesome benefits? GuardTree gives you peace of mind with a monthly extended car 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 and car rental and trip interruption costs. 

See what’s covered and use our plan calculator to decide if an extended car warranty is right for you. 


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Disclaimer: This post is to be used for informational purposes only and does not constitute mechanical or other professional advice as it relates to your vehicle. Each person must consult a qualified professional with respect to matters referenced in this post. GuardTree Inc. assumes no liability whatsoever for actions taken (or not taken) in reliance upon the information contained herein.