Methodology for auto warranty company reviews

Auto warranties are vehicle service contracts with auto manufacturers that cover the cost of repairs within an agreed-upon term of months or miles driven, whichever comes first. However, once your manufacturer’s warranty expires, you’ll be responsible for the full cost of subsequent repairs — unless you buy a vehicle service contract.

Vehicle service contracts, or extended auto warranties, protect you from paying the full cost of repairs and replacements (mechanical breakdowns), even after your factory warranty expires. Instead, you pay a monthly or one-time fee over a certain number of months and a deductible for repairs relating to an approved claim.

We research, rate and review vehicle service contract providers to help you find the right protection for your vehicle and get back on the road faster.

Research

To provide comprehensive and accurate extended auto warranty information, we conducted firsthand research on more than 30 top providers in the industry. Our research included speaking to and gathering quotes from company representatives, navigating first-party information, such as sample contracts, and assessing provider transparency.

We also turned to consumers like you to expand our understanding of providers’ customer service and satisfaction levels. We surveyed 1,500 vehicle service contract policyholders to gather insight on key indicators of quality, such as cost, claims and brand trust.

Overall, we spent 500 hours researching more than 40 providers and considered 1,700 data points for each. Additionally, we analyzed more than 100 customer reviews for each brand on third-party aggregators, including Trustpilot and the Better Business Bureau (BBB). This acts as our barometer for the quality of claims handling, communication and more.

Review and rate

After reviewing providers, we submit our analysis to detailed review standards to compare and rank the companies we believe are the best options for you. We score companies out of 100 points in each of the five categories. Next, we synthesize these scores into an overall score out of 100 points. We then simplify the score into the 5-star rating we include in our reviews and recommendations.

We focus our rating factors across five key areas:

• Market standing
• Coverage
• Cost
• Trustworthiness
• Customer experience

Market standing (20 points)

Though there are many trustworthy auto warranty companies to choose from, the market is also home to scams masquerading as auto warranty providers. One of the best ways to vet a company you’re considering is to look into its reputation within the market. The better a provider’s reputation, the likelier it will stand by its promises.

Our team considers years in business, availability, company size, ratings from industry experts, awards and sponsorship partners when calculating this score.

We awarded more points to companies founded before 2000, since they’ve had more time to receive complaints or praise. Brokers that offer plans through established, well-reputed plan administrators earned higher scores as well.

Coverage (25 points)

Coverage options and customizations are a huge factor in choosing the right auto warranty company. We look at the number of plans, coverage levels, term length, mileage limit and included perks.

Companies that provide more variety — three or more plans — scored well. Then we awarded points to providers for each of the following plan types: exclusionary, powertrain and maintenance coverage. Companies with coverage extras, such as towing, rental car and trip interruption, scored additional points.

Looking at the durability of coverage, we awarded more points for plans that lasted up to 250,000 miles or for term lengths of 10 or more years. Companies with stricter limitations on warranty terms earned fewer points.

Cost (25 points)

Price is the most important factor in choosing a vehicle service contract provider for 17% of customers, according to results from our 2023 survey of 1,500 respondents. We rated providers based on the cost of each plan type they offer and whether it is low, average or high compared to the average of our entire quote pool. Companies that offer discounts earn a few additional points.

We also analyzed deductible offerings, which affect the out-of-pocket cost when filing a claim with any given provider. Deductible cost and number both contribute to each provider’s overall deductible score, up to 25% of its cost factor’s points.

Trustworthiness (10 points)

An extended auto warranty company’s trustworthiness can help determine its legitimacy and service quality. It’s important for an auto warranty company to offer transparency into its coverage details and contact particulars. To evaluate provider trustworthiness, we rate each on sample contract availability, money-back guarantee (if any) and waiting period for coverage.

We favor providers that offer a 30-day/1,000-mile waiting period and easily accessible online information. We awarded fewer points to providers without sample contracts, longer waiting periods, or unlisted plan details and resources.

Customer experience (20 points)

The value of an auto warranty provider is based on the service it provides, and consumers expect prompt and friendly communication with their providers. After secret shopping each brand in our review standards, we scored them on six factors: mobile app, online chat, BBB customer rating, BBB complaints within the last three years, Trustpilot rating and ease of quotes process.

We awarded the most points for higher third-party ratings and customer review scores, numerous and varied communication channels, and the tenor of employees we spoke to during our secret shopping process.