Disclosure: This content was produced by an independent editorial party for the purposes of educating our customers, and is not influenced by the other business operations of CARCHEX.

If you are looking for repair and replacement coverage after your factory warranty has expired, you’re probably looking for an aftermarket warranty. What is an aftermarket warranty, and what does it cover?

A 2018 Pegasystems Inc. survey found that 62% of drivers with active car warranties have benefitted from their warranty within the past year, and 54% of drivers aged 16–24 have an extended warranty. So, why do over 48% of respondents still report confusion about their car warranty? Perhaps they don’t understand their specific type of car warranty and how it differs from other coverage plans on the market.

Is an Aftermarket Warranty the Same as an Extended Warranty?

There are different names for a car warranty, including factory warranty, vehicle service contract, extended auto warranty, and aftermarket warranty. Some of these warranties are different, some are the same, and some aren’t warranties at all. How can you tell the difference? Here’s a clue: Only one of these contracts is actually a warranty.

That’s right. A factory warranty is the only true warranty, whereas the other types of warranties are actually vehicle service contracts. In fact, extended auto warranties and aftermarket warranties are all just other names for vehicle service contracts.

What is a warranty, and what is a vehicle service contract?

  • An auto warranty (i.e., a factory warranty or manufacturer’s warranty) covers the cost of repairs and replacements for free as an implied part of the cost of the new vehicle. It covers defects in materials or workmanship.
  • A vehicle service contract covers the cost of repairs and replacements once the factory warranty has expired. A “VSC” is optional and purchased at an additional cost.

How Does Coverage Compare to the Factory Warranty?

Factory warranties typically have two parts: a shorter, limited bumper-to-bumper warranty that covers all manufacturer parts, and a longer powertrain warranty that covers the vehicle’s engine, transmission, and drive axle components. Terms are typically three years or 36,000 miles and five years or 60,000 miles, respectively.

Aftermarket warranties, which can be purchased from a dealership or a third-party provider, can offer several levels of coverage with various terms, often adding another five years or up to 120,000 miles. These terms only apply after the factory warranty expires.

In addition to repair coverage, a quality aftermarket car warranty will also include roadside assistance benefits, such as towing, rental coverage, trip interruption, and even battery jump services.

Young woman standing by her broken car on the road and using phone to call for help

Benefits of an Aftermarket Warranty

Vehicle service contracts can save you hundreds—even thousands—of dollars on major repairs.

For example, a Nissan factory warranty covers a new Nissan vehicle from bumper-to-bumper for up to three years or 36,000 miles. Once this warranty expires, a major repair, such as a power steering pump replacement, can cost over $1,000 out of pocket. However, with an extended car warranty or aftermarket warranty, you pay only for the contract and deductible, which could be half the price.

There are many benefits of an aftermarket warranty for cars:

  • New and Used Coverage—Unlike factory warranties, which only cover new cars, an aftermarket warranty may cover new cars once the factory warranty expires, or pre-owned vehicles with higher mileage.
  • Transferable Coverage—All good extended warranty contracts allow you to transfer your vehicle protection to a new owner. Not only does this give the new owner peace of mind, but it also increases the resale value of the vehicle.
  • Coverage No Matter the Price—The cost of parts and labor can change from year to year and location to location, but a vehicle service contract covers the full price of the repair even if the price has changed since last year or five years ago.
  • Competitive Market Price—When you choose a third-party provider like CARCHEX, you can shop for competing protection plans, which results in better prices.
  • Communication with Repair Facilities—When it’s time for repairs, you won’t have to negotiate with mechanics on price or guess the fair price of a repair. The contract’s obliger will communicate with the repair facility on your behalf regarding approval, price and payment.

Who Offers the Best Aftermarket Warranty?

There is a lot of competition in the extended warranty market, which can be both a good and bad thing. On one hand, competition drives down prices, especially among third-party providers. On the other hand, the more extended auto warranty providers in the market, the higher the chance that potential customers fall prey to bad practices and highly limiting contracts.

Just a few of the industry names you’ll see while researching extended car warranties include CARCHEX, Endurance, Liberty Bell Auto Protect, Concord Auto Protect, AA Auto Protection, Delta Auto Protect, AAA, autopom!, and CarShield.

How do these companies compare across industry experience, Better Business Bureau ratings, insurance, coverage options, and deductibles?

CARCHEXEnduranceConcord Auto ProtectLiberty Bell Auto Protect
Years in Business2114710
BBB AccreditedYesNoNoNo
Customer Complaints100+680+15+20+
Insured PlansYesYesNoYes
Coverage Levels5533

Data updated November 2020

Though many competitors offer similar coverage levels (powertrain, powertrain plus, exclusionary, bronze, silver, gold, etc.), the devil is in the details. For example, in the chart above, you will notice some plans are uninsured. Even if a competitor has positive reviews, you’ll still want reliable, insured coverage that you know will be paid no matter what. Some states do not regulate vehicle service contract providers under the Department of Insurance, but it is important to hold your provider to a high standard with regard to risk.

CARCHEX offers the highest BBB rating and transparency among its competitors, as well as insured plans that won’t leave you with the bill.

CARCHEX Superior Service

As a CARCHEX customer, you have the ability to choose from five coverage levels. Bronze-level contracts, which are the most basic, cover your vehicle’s powertrain. Each tier increases the number of covered components, leading up to Titanium coverage, which is an exclusionary contract. Titanium plans cover all vehicle systems unless specified otherwise.

  • Titanium—This level offers the most comprehensive coverage at a premium price.
  • Platinum—This is the highest level of stated-component coverage.
  • Gold—This tier is recommended for vehicles over 60,000 miles.
  • Silver—Silver plans are still affordable, and coverage extends beyond the powertrain.
  • Bronze—This level offers the most affordable coverage for engine, transmission, and drive axle components.

In addition to the covered components, CARCHEX service plans provides 24/7 roadside assistance, key lockout service, battery jump services, towing/wrecking and rental services, and trip interruption reimbursements.

What Makes CARCHEX Stand Out?

CARCHEX service goes beyond coverage. The customer experience is equally important.


  • Easy claims process
  • No-Haggle, Low-Price Everyday Guarantee™
  • Endorsements from CARFAX, Edmunds.com, Kelley Blue Book, and more
  • Repairs paid directly to repair facility by obliger
  • 30-Day Money-Back Guarantee
  • Affordable monthly payment plans
  • Generous roadside assistance coverage and reimbursements
  • Ability to choose from 30,000 repair facilities
  • Coverage for high-mileage vehicles

Outstanding service is always rewarded. CARCHEX boasts accolades from many review sites and institutions.

  • “Best Choice Award” for 4 consecutive years from BestReviewsHub.com
  • 2017 “Top Pick” from Thoroughly Reviewed
  • 2017 “Silver Status” Golden Bridge Award
  • 8-Time Inc. Magazine 500|5000 Hall of Fame Honoree

What Should You Ask Your CARCHEX Representative?

The number of extended auto warranties can be intimidating. Companies can market more than 15 contracts, with some companies offering more than 30. To help you find the best plan for your specific vehicle and lifestyle, ask your CARCHEX representative the following questions:

  • Is there fine print that I should be aware of? What exclusions might I overlook, such as parts that are only covered in conjunction with other defective parts?
  • What will my monthly payments be with a payment plan? Can I lower my contract price with a higher deductible? Or, is a $0 deductible available?
  • Who do I contact to make a claim?
  • Is my favorite or local mechanic approved by CARCHEX?
  • Does the plan cover cars with more than 100,000 miles?
  • Does the plan cover certified pre-owned (CPO) vehicles?

Frequently Asked Questions


Pegasystems Inc: https://www.pega.com/about/news/press-releases/survey-reveals-reasons-consumers-forego-purchasing-extended-automotive

RepairPal: https://repairpal.com/estimator/nissan/altima/power-steering-pump-replacement-cost

Kelley Blue Book: https://www.kbb.com/car-news/10-steps-for-selling-your-car/2100006447/

BBB: https://www.bbb.org/us/md/hunt-valley/profile/extended-warranty-contract-service-companies/carchex-0011-23015869

BBB: https://www.bbb.org/us/il/northbrook/profile/auto-warranty-processing/endurance-warranty-services-llc-0654-88077689

BBB: https://www.bbb.org/us/pa/king-of-prussia/profile/auto-warranty-services/concord-auto-protect-0241-236024557

BBB: https://www.bbb.org/us/fl/saint-petersburg/profile/auto-service-contract-companies/protect-my-car-0653-90067737

BBB: https://www.bbb.org/us/fl/saint-petersburg/profile/auto-service-contract-companies/protect-my-car-0653-90067737

IRMI: https://www.irmi.com/articles/expert-commentary/warranty-service-contract-insurance