What are Canada's Top Extended Car Warranties?
Did you know the average cost of a new car in Canada now exceeds $40,000? The COVID-19 pandemic and supply chain shortages have significantly inflated prices on both new and used cars. Used cars are up to $5,000 more expensive than they were even just a year ago. The average used car now costs $25,000.
With car prices rising at an alarming rate, you want to be sure your car runs well for a long time. A used car warranty can be a great way of ensuring that it does just that.
This guide provides an overview of extended car warranties, what they cover, and how much they cost and provides answers to all your questions about extended car warranties.
How do used car warranties work?
Manufacturers' warranties are generally included with new cars. If the car is resold though, they may not transfer. Since warranties may be voided when the car is sold to a new owner, used car warranties, or third-party warranties, provide peace of mind for used car repairs.
Warranties may be offered by the manufacturer, but more commonly are offered by a private third-party provider on used vehicles. These extended warranties can provide extra protection.
A warranty from a manufacturer typically covers the first two to five years of a car's life. This is short compared to the amount of time some buyers spend financing their vehicle with a car loan. Some companies now offer car loans that are up to 96 months or 8 years! If you are holding on to your vehicle and financing it for that long, an extended warranty can help you to cover expensive repairs.
|Manufacturer's Car Warranty Period|
|Used car extended warranty|
Exceeded the allotted amount of kilometres on your original car warranty? Purchased a used car that does not come with any form of warranty? In both of these cases, an extended car warranty would be a good choice for you.
Good to know
Compare and purchase an extended car warranty at the top of this page.
Why consider a subscription used car warranty?
Have you ever had that moment of panic when your car does not start or it makes an unfamiliar sound? Lots of here that and worry about the cost straight away. Often that fear is right.
Car repairs can be very expensive and always seems to come at the worst time. A car warranty can provide extra reassurance that you will be able to keep driving and keep your costs low. Instead of risking large expenses when a part wears out, you can plan financially by purchasing a car warranty subscription like the one offered by GuardTree.
Below we have compiled average costs for typical car repairs. A used car warranty can save you from paying these out of your own pocket.
|Part||Estimated cost of a repair|
|Front wiper motor||$500|
|Fuel pump||$450 to $1,200|
|Front suspension arm||$520|
|Alternator Replacement||$605 to $1,200|
|Air conditioning repair||$770 to $2,000|
|Ignition module||$1,200 to $3,200|
Some car warranty providers include roadside assistance in their extended warranty packages. For example, GuardTree a popular subscription car warranty provided includes:
- Unlimited number of roadside calls
- Towing, up to $175 reimbursement per event
- Extrication and Winching, up to $175 reimbursement per event
- One emergency fuel delivery claim per year (keep in mind the fuel costs are extra)
- Locksmith, up to $175 reimbursement per event
- Spare tire installation if you get a flat tire
- Jump-start your battery if it dies
How much is an extended warranty on a used car?
As a subscription, anticipate spending between $49.95 and $79.95 each month. If you purchase the extended warranty
The cost of an extended warranty for a used car will depend on factors such as the make and model of your vehicle, how old the car is, the mileage and any applicable deductibles that have been added.
Some providers have you purchase for a specified term length such as 12, 24 or 36 months while others charge monthly instead of locking you in.
How do you purchase an extended warranty on a used car?
In Canada, there are a few different ways to purchase an extended car warranty. You can get it through car dealerships, through some lenders when you get a car loan, or you can purchase it separately online.
Some popular providers like GuardTree, Ensurall, CarShield and Obvi, allow you to quickly get a quote and purchase online.
When comparing used car extended warranties, price isn't everything. Weigh up the following:
- What is covered and what is not
- Specific exclusions in the contract
- Which repair shops are approved:
- Cancellation policy
We always recommend reading the fine print before purchasing any type of policy. Make sure to do so when purchasing an extended car warranty. There can be big differences from provider to provider. Compare to make sure you are getting the best coverage for you.
When should I buy an extended warranty on my vehicle?
Car repairs are becoming increasingly complicated because of electronics and computer-controlled components. Extended used car warranties may not be for all buyers, but can be a lifesaver when an expensive repair comes down the line or you break down on the side of the road.
While there is not necessarily a “right” or “wrong” time to purchase an extended warranty for your vehicle, the longer you wait, the more risk you run of having an issue with your car. Also once your vehicle reaches a certain age or mileage, you may not be able to get an extended warranty on it.
Good to know
Remember that you do not need to buy warranty coverage when you buy your car. Some dealers push hard, but that pressure is a negotiating tactic. You can get extended warranty coverage, or not, later. Compare warranties now.
What does an extended warranty cover on a car?
Basic used car warranties will cover your engine and transmission, components that need regular maintenance to keep them running smoothly. Depending on the vehicle's condition and mileage, you may see coverage for steering wheel parts, brakes, electrical, or suspension.
A car warranty typically covers the car and accessories concerning reliability and safety. It does not cover cosmetic damage or normal wear and tear. Here is an example of what an extended vehicle warranty may cover:
- Extended powertrain coverage
- Transfer case
- Other related parts
- Some providers will also cover roadside assistance
What does an extended warranty NOT cover on a car?
While an extended warranty covers substantial repairs to keep your car running, many important things are not covered. Examples of repairs that may not be covered are:
- Routine maintenance: oil changes, tire rotations
- Wear and tear: brakes, brake pads, clutches, windshield wipers, headlight bulbs
- Appearance and exterior damage: scratches and dings
- Interior damage: tears in the upholstery, holes in the seats, broken plastic
- Damage from an accident: dents in the exterior, broken glass
- Damage from environmental factors: salt, sand, wind, hail, tree sap
- Damage caused by improper car care: skipping regular maintenance, reckless driving, etc.
- Alterations or modifications: installing incorrect parts, tampering with the odometer, etc.
If you have repairs that need to be done to any of the above items, you would be responsible for paying those costs out of pocket.
Keep in mind that warranty providers may require you to do routine maintenance during the life of the extended warranty. Failure to follow the manufacturer's recommended maintenance schedule may result in a repair claim being rejected.
Is a manufacturer’s original warranty or a 3rd party warranty better?
When you purchase a new car, most manufacturers give you peace of mind by providing warranty coverage for a specified time period which ranges from around two to five years. The downside to the coverage they offer though can be very short-lived.
See below for a breakdown of the pros and cons of manufacturer versus 3rd party coverage but also sheds some light on the differences between the two warranties.
- Covers a wide range of repairs
- Typically included in sale price
- Short-lived coverage; usually valid for between 2-5 years
- Only offered up to a limited number of kilometres (rarely more than 100,000)
Used car warranty
- Provides peace of mind for major repairs that may occur
- Easy to budget for
- You must pay the premium out of pocket
- Covers a lesser range of wear and tear repairs
Can I cancel my warranty subscription?
If your circumstances change and you wish to cancel your used car warranty subscription, there are a few things to keep in mind. If you purchased your warranty through a dealership and/or pay all upfront, you may not have the option to cancel coverage after signing the contract.
However, if you purchase an extended warranty using a subscription service like the one offered from GuardTree, you can cancel at any time. When signing up for an extended vehicle warranty, be sure to check your specific provider's cancellation terms before subscribing to an extended warranty.