A lot of car buyers, especially those who buy used cars, find themselves confused by extended warranties. My dealership experience helped me to uncover this story.
We start with a Facebook user who bought a 2025 Cadillac Escalade. The customer has apparently had many "issues" with their vehicle and sought to add a warranty. We presume they mean extended warranty, since a 2025 model would likely still be under the factory four-year, 50,000-mile warranty. The powertrain has a six-year, 70,000-mile warranty. It is, of course, possible that the customer put so many miles on the Escalade that the warranty is no longer good, but that would be unlikely.
Knowing that, we can guess that the customer was curious about an extended warranty. She says she was quoted $4,000.
A single mom that has no clue what she is doing when it comes to things like this
Torque News Recommends You Research Before Buying An Extended Warranty
Your author is a former service advisor, and I have a lot of experience dealing with extended warranties. My experience was, of course, not in selling them but in working with customers to have them cover repairs.
My advice to anyone who asks whether they should purchase an extended warranty is that they should read the terms. Many warranties start the clock right from the time of purchase. So if you have a two-year-old car with 25,000 miles on it, and you purchase a five-year, 50,000-mile extended warranty, you end up with an overlap if the factory warranty is, say, four years and 50,000 miles. It would be an overlap of two years and 25,000 miles.
If possible, you're better off waiting until the factory warranty expires and buying an extended warranty that can pick up when the factory warranty ends.
Cost matters, too. Reliability is obviously unpredictable, though with a little research, you can get a sense of how often your vehicle needs to be repaired and how costly those repairs might be. Then you can compare the cost of the warranty with the cost of likely repairs before deciding to put money down on a warranty you may never use.
I'd be remiss if I didn't point out something obvious -- if you don't plan on keeping your vehicle beyond the life of the factory warranty, and you don't put too many miles on your car, there's probably no reason to spend the money on an extended warranty.
Here's What Torque News Saw From Facebook Commenters
Facebook commenters were trying to help the original poster. One said: "Yes, get the extended warranty. Repairs can be crazy expensive without it. I always feel better knowing if something happens I won’t have to deal with it."
Another added: "You have bumper to bumper warranty and if you actually call the elective insurance carrier to see what’s covered you’ll be able to make an easy decision .. it’s not needed until you hit the milage or time to void the bumper to bumper warranty. I had a sales person tell me it covered 'everything, even a tear in the headliner or leather' which was categorically false. Call Zurich or whoever their insurance carrier is and figure it out for yourself. You can also get a policy yourself that will likely be a better rate than what the dealer is offering you because they are getting a kickback or commission off the sale vs you buying it direct. Lots of company representatives in this group, proceed with caution."
That's a good point -- sometimes buying an extended warranty directly from the servicer can be cheaper than working it through the dealership.
It's also important to read the fine print for
exclusions, as one commenter said: "extended warranties are great and very helpful but pay very close Attention to the Exclusions, what's not covered so that you're not disappointed when the warranty doesn't cover what you feel it should cover, but I recommend an extended warranty".
Your author knows from experience that warranty companies
will do whatever they can to get out of paying for a claim, so those companies will look for an exclusion that would force the customer to pay out of their pocket.
I'd also add that sometimes extended warranties have a deductible -- make sure you know whether your warranty has one or not. Deductibles might be relatively small, like $50 or $100, but no one wants to be surprised to find out that they need to pay, even for a small portion, of a covered repair.
Torque News' Take On The Extended Warranty Dilemma
My take on the original poster's question is nuanced. Generally, I'd recommend against purchasing an extended warranty on a one-model-year-old vehicle, but the customer may be putting a lot of miles on the car. It also sounded like there was already a litany of issues, although it's unclear if those repairs were covered by the factory warranty or not. It is clear, however, that the customer appeared concerned that their Escalade would continue to act up, even after the factory warranty expired. In that case, as most commenters agreed, an extended warranty wasn't a bad idea. The only questions come down to timing and price, and only the buyer can answer those, since each individual case is different.
About The Author
Tim Healey is an experienced automotive writer and editor from Chicago. He has covered automotive news at Consumer Guide Automotive, Web2Carz, AutoGuide, and was the managing editor at The Truth About Cars. Tim is a member of the Midwest Automotive Media Association. You can find him on Facebook, X/Twitter, and on LinkedIn.
Comments
First off. admitting that…
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First off. admitting that you don't have a clue on the warranty process is not prudent. Extended warranties can be bought elsewhere, not just dealerships. My credit union offers them and can accept payments. PDFs(brochures) of the different levels of coverage are presented before you make a decision. Age, model, mileage, are factors of overall cost. Don't buy one over the phone or on internet. Most are just an extension of your auto insurance roadside assistance. Good luck!
That's why we advise…
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In reply to First off. admitting that… by Daniel Godinez (not verified)
That's why we advise researching before hand.
If an extended warranty is…
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If an extended warranty is absolutely necessary, get additional quotes. F&I managers at dealers pay for their boats with your warranty dollars. A person can also wait a while to make the decision. As long as the original warranty is in effect, you can still buy additional coverage, if needed. In the vast majority of cases, it isn’t worth the money.
Yes, whether it's worth it…
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In reply to If an extended warranty is… by Less Grey (not verified)
Yes, whether it's worth it or not is up to you.