Their Job Is to Find How to Deny Your Claim — 'We Want Your Entire Service Record From the Day You Bought the Car Brand New' - and They Denied It Because You Did This Oil Change at 5,200 Miles, Not at 5,000 Miles

"Should you buy an extended warranty in 2025?" "Are car extended warranties a scam?" A Toyota Master Mechanic answers these two questions to help remove the confusion about whether an extended warranty is right for you and your car.

"Should you buy an extended warranty in 2025? Let's keep it simple…cars in 2025 are extremely complicated, and that's just there's no way around it. Even the most reliable cars, they're a lot more complicated than the same car from 15 years ago," states the host in a recent episode of the Car Care Nut YouTube channel, who begins his take on whether or not extended car warranties are a scam.

This is one of those "Yes and No" answer questions because, in a world where absolutes are rarely absolute, there are almost always exceptions depending on your circumstances.

Extended warranties are tailored to specific folks," states the host.

Here is the video with all the details; however, a summary immediately below the video is provided for your convenience, covering all the key points you need to know.

Are Car Extended Warranties a Scam?

VIDEO SUMMARY KEY POINTS

Warranties Tailored for Specific Owners of New Cars

For example, the host points out that if you are a Toyota owner who:

1. Drives normal mileage.
2. Does not like it when even the smallest issues arrive.
3. Stays on top of all maintenance and repairs.
4. Wants to keep their car for 10-15 years.

"This is the person that an extended warranty may make sense to because it may not be something big like an engine problem or transmission problem; it could be a collection of little stuff that actually ends up making that warranty make total sense.

Things like the radio goes out, seat stops working, some gizmo stops working, and the whole point of buying a car with gizmos is to enjoy them, and if they all break down, it's like, what's the point?" says the host.

The point the host is making is that if this sounds like you, then you should consider both the personal and financial aspects of your loan period.

Suppose you have a long loan period of 8-10 years, and your manufacturer warranty is 3-5 years. In that case, you have to consider whether you will like paying for what could be expensive small repairs such as radio or infotainment problems, seat adjustment, etc., that can add up while still making that loan payment.

In other words, if you cannot live with a car with multiple minor issues because you do not want to add to your car payments, then an extended warranty may make sense for you.

Do you want to shell out a small fortune of repairs while you are still making payments on that car? That's where you want to actually consider it.

Warranties for Used Car Shoppers

In the host's opinion, buying a three- or four-year-old used car makes sense because of its significant depreciation, which saves you a lot of money. However, the risk is that you can never be 100% sure of how well it was maintained or all of the hidden issues it may have.

With that in mind, buying an extended warranty makes good sense.

One example he provides is a customer who bought a 2017 Tacoma with 48,000 miles on it, which ran fine until it reached 68,000 miles. According to the vehicle records, it is believed that a 26,000-mile oil change gap existed before the owner purchased it, which contributed to the engine's premature failure at 68,000 miles. Not having an extended warranty meant the owner now faced the prospect of paying several thousand dollars for a new engine.

Extended warranties: If you plan them and you are the right buyer for them can actually really save you in a bad day.

Which Extended Warranty Should You Buy?

Not all extended warranties are the same. As such, you need to be aware of two basic scenarios concerning the extended warranty the salesperson is offering you:

1. A brochure explaining the extended warranty with a focus that it is only going to cost you $20 per month. You need to know exactly how much $20 per month adds up to, considering how long you intend to keep the vehicle. Do not let the salesperson roll the cost into your payment plan, which will inflate the final price.

2. Beware of plans that do not explain exactly what is covered. For example, if you buy a used car and the extended warranty does not cover eventual high-ticket items such as:

• A catalytic converter
• Seals and gaskets
• Struts and shocks

Sometimes I see the language on these brochures they literally mention the same thing twice on the things they cover, but they never list what they do not cover―and that's what you want to find out.

Red Flags to Watch Out For

These are the red flags that should make you run away from an extended warranty:

1. Lifetime Warranties―There is no such thing as a lifetime warranty. The scam here is that they are set up so that whomever is selling it, has ways to deny your claims.

Their job is to find how to deny your claim — 'we want your entire service record from the day you bought the car brand new till today, 180,000 miles'… and they denied it because you did this oil change at 5,200 miles, not at 5,000.

2. Online Extended Warranties―Avoid online warranty deals that only require that you sign up for it and pay them without any type of investigation on their part about your car and its condition. One risk is that they typically offer a one-size-fits-all policy that might not cover your car and its components. Another risk is that they may have fine point provisions such as the repair labor costs are limited to $50/hour by a mechanic when most mechanics work a much higher hourly rate. That difference will be billed to you.

Are Car Extended Warranties a Scam?

Back to the host's question of whether or not extended warranties are a scam, he concludes with his answer that goes beyond a "Yes and No" answer:

In general, if you buy an extended warranty from a legitimate source, the scam risk is lessened as long as you know what you are buying into and what it means to you.

Yes, when you buy the wrong one. No, when you buy the right one and it works for you.

For example, if you buy a car knowing that you will put a lot of miles on it in a short time, an extended warranty does not make sense for you. Remember, it's not just time but mileage that can also prematurely end your warranty.

In such a short period of time the likelihood of things going south are not actually high. But equally, if you are majority of folks who will drive their car normal mileage―not nothing on the extreme or nothing on the very low―consider it but don't overpay for it… negotiate the price of the extended warranty.

"If you get a decent deal on an extended warranty and it's from a reputable dealership that is trying to sell you from a reputable company, research the company name. It's important that you actually ask for the company name so you can research it. I wouldn't hesitate because they are not a scam, folks. If you do your due diligence and understand what you are buying, they are not a scam. But if you just sign the paper and say let's go, you could have bought a very bad extended warranty―not bad because the company is like scamming or whatnot, it's just a bad contract and a bad policy that's as simple as that because you didn't look at the important hidden stuff."

For additional articles focused on extended warranties, here are two titled "So I'm Getting A Brand New RAV4 Hybrid Soon, And I'm Wondering If The Extended Warranty Is Worth It? ―This Happened to Me, and Here is What I Did But Wished I Had Done" and "Secret Warranties That Can Get Your Car Fixed for Free."

COMING UP NEXT: Did My Own Tune-Up, Then This Happened — Any Advice? 2006 Ford Fusion V6 With a Little Over 164K Miles

Timothy Boyer is an automotive reporter based in Cincinnati who currently researches and works on restoring older vehicles with engine modifications for improved performance. He also reports on modern cars (including EVs) with a focus on DIY mechanics, buying and using tools, and other related topical automotive repair news. Follow Tim on Twitter at @TimBoyerWrites as well as on Facebook and his automotive blog "Zen and the Art of DIY Car Repair" for useful daily news and topics related to new and used cars and trucks.

Image Source: Deposit Photos