Should You Bother With An Extended Warranty?

Hello ladies and gentlemen and welcome to Letters to Doug, a weekly column wherein Doug addresses your automotive-related letters with letters of his own, such as P.


If you want to participate in Letters to Doug, you can: just send me a message on my Facebook page, or send me an e-mail at I will read both, though I must say that I prefer the Facebook thing, because you people have signed me up for every single e-mail list that exists, and I few that I honestly wonder if you created for the sole purpose of sending me strange e-mails.

Anyway, today’s question comes from a reader I’ve named Perry, who lives in a place I’ve named Arizona. His friends probably call him Perrizona, except that his name is actually Roger and he lives in Connecticut. Anyway, Perrizona writes:

Dear Doug,

I am aware of your experience with the CarMax warranties and how you have used them to keep English cars under their own power. But what do you do for a extended warranty from a reputable company if you are buying your car from Stinky Pete’s Car Shack, a government auction or some other similar situation? Are there warranty companies out there that are worth dealing with? Any light you can cast on this subject will be helpful.



For those of you who don’t know what Perry is talking about, allow me to educate you: about three and a half years ago, I purchased a used Range Rover from nationwide used car dealer CarMax, which is a place where they sell used rental cars to people with wood paneling in their homes.

In addition to the Range Rover, I also purchased a six-year bumper-to-bumper warranty for $3,899. Not surprisingly, this warranty quickly paid for itself, and recently I’ve been walking out to my Range Rover to find it leaning to one side like the Titanic when Rose was floating on that door, suggesting that the air suspension may have failed again. So it has been a great investment.

But what about other third-party warranties? Are they any good?

Generally speaking, Perry, the answer here is “no.” This is one of the things that makes the CarMax situation so desirable: it actually works.

I say this because the vast majority of third-party warranties I hear about try to deny repairs based on any possible mitigating circumstance. You added aftermarket wheels? Deny the sunroof replacement. You went 1,000 miles over on an oil change? Deny the power liftgate repair. You once stole a Diet Dr. Pepper from a grocery store when you were 13 because Taylor Hallman, who was 14 and much cooler, dared you to? Deny the engine replacement. And refer to the authorities.

And then there’s the other issue with third-party warranties: even when they do cover stuff, they often try to weasel their way out of it. For example, sometimes they won’t cover the full labor rate, or there’s a total coverage maximum hidden in the fine print, and that maximum is $82.47 over the life of the warranty, or they just stop picking up the damn phone when you call.


Now, I admit, there are good third-party warranties. I know this because some readers have told me about them. So if you do your homework, and search around, and look at all the reviews, you may actually find a warranty that’s as good as CarMax.

Likewise, CarMax isn’t perfect. I know this because readers have told me about that, too. I would say for every 10 to 15 good CarMax e-mails I get, I also receive roughly one or two bad ones, along the lines of “CarMax wouldn’t cover my dealer’s labor rate,” or “CarMax didn’t want to use new parts,” or “The zipper in my CarMax free promotional windbreaker clamped down on my cheek, and now I look like The Joker.”


But I would say generally, the CarMax warranty seems to be the best among aftermarket third-party warranty providers. And I say this because I have full confidence that when I drive myself into the dealer to replace my failed air suspension, CarMax will pay every penny of the bill. Assuming I make it.

@DougDeMuro is the author of Plays With Cars, which his mother says is “fairly decent.” He worked as a manager for Porsche Cars North America before quitting to become a writer.



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