Of 12,000+ buyers Consumer Reports surveyed, 55% never used the coverage once, and the typical buyer saved nothing against what they paid. But the answer changes with what you drive — here is the evidence, the law, and the four questions that decide it.
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Consumer Reports surveyed 12,000+ respondents who had bought a vehicle service contract. 55% of them never used it once.
Among the minority who did claim, the arithmetic still went the wrong way: $1,214 average initial cost vs. $837 median savings among users; net loss >$375. Fold the non-users back in and $0 median savings across all buyers.
That is the whole case against, and it is worth stating plainly because the industry rarely does. It is also, honestly, an average — and nobody experiences an average. The rest of this page is about when you are likely to be the exception.
On the vintage of these figures: that survey was surveyed late 2013, and it remains the most detailed public dataset on the question. CR's current live consumer-facing article on this topic (updated Oct 30, 2025) no longer restates any of the specific 2013/2014 survey figures - it only gestures at 'past CR member surveys' — so treat the percentages as the best available evidence rather than as this year’s reading.
The same survey found the outcome depends heavily on what you drive. Avg. cost: Mercedes-Benz $2,200, BMW $2,007, Chrysler $1,525; usage rate: BMW 71%, Chrysler 65%, Dodge 63%, Mercedes-Benz 60%, vs. Honda/Toyota 39% and Subaru 36%.
Read that twice: owners of less reliable cars both paid more for coverage and claimed on it more often. The pricing already reflects the risk, which is how insurance is supposed to work — and it is why "is it worth it" has no single answer. On a historically troublesome model with expensive parts, a contract can make sense. On a historically reliable one, you are usually buying peace of mind at a measurable price.
Repair costs themselves are genuinely rising: U.S. Bureau of Labor Statistics puts motor vehicle maintenance and repair at +5.2% over the 12 months ending Aug 2026 (NSA) (August 2026 (released September 11, 2026)). That pushes in favour of coverage. But it pushes the price of the contract up too.
The most common way to waste money here is to buy cover that overlaps a factory warranty that has not run out. Powertrain terms in particular run far longer than most people remember.
| Brand | Factory warranty | Source |
|---|---|---|
| Ford | Bumper-to-Bumper: 3 years/36,000 miles; Powertrain: 5 years/60,000 miles | Ford |
| Honda | Basic: 3 years/36,000 miles; Powertrain: 5 years/60,000 miles | Honda |
| Hyundai | Basic: 5 years/60,000 miles; Powertrain (original owner): 10 years/100,000 miles | Hyundai |
| Kia | Basic: 60 months/60,000 miles; Powertrain: 120 months (10 years)/100,000 miles | Kia |
| Mercedes-Benz | Basic Warranty: 4 years/50,000 miles | Mercedes-Benz USA |
| Nissan | Basic: 36 months/36,000 miles; Powertrain: 60 months/60,000 miles | Nissan |
| Subaru | Basic: 3 years/36,000 miles; Powertrain: 60,000 miles | Subaru of America |
| Toyota | Basic: 36 months/36,000 miles; Powertrain: 60 months/60,000 miles | Toyota |
Read off each manufacturer’s own warranty documentation, 12 September 2026. Terms vary by model year and some brands differ for EV and hybrid components — check the booklet for your car.
A point of law worth knowing before you sign. FTC Consumer Advice is explicit that an extended warranty sold separately is not a warranty in the federal sense at all — Not a warranty under federal law; a separately purchased contract. A manufacturer’s warranty comes with the car; this is a contract you buy, and it is governed by its own terms rather than by federal warranty law.
On price, the FTC's range is wide: "Several hundred dollars to several thousand" plus a possible per-service deductible. On what is not covered: Accident damage and normal wear and tear typically excluded.
A marketing claim that does not survive checking: the widely repeated line that dealer contracts are marked up enormously against third-party ones. No more than ~$100 difference between factory (dealer) and third-party programs in CR’s data. Where the two did differ was satisfaction — 53% of dealer/automaker-backed buyers 'highly satisfied' vs. 41% of third-party buyers.
The auto-warranty robocall is not a nuisance at the edge of this industry; for a while it was one of the largest illegal calling operations ever measured. FCC Press Release found the enterprise placed ~5,187,677,000 calls to 550,138,650 phone numbers, Jan-Mar 2021, using 1,051,461 unique caller ID numbers.
FCC Press Release finalised a forfeiture of $299,997,000 final forfeiture in August 3, 2023. After regulators ordered carriers to stop routing the traffic, 99% drop in call volume following the order.
Complaints have fallen sharply since: More than 84% year-over-year decrease, FY2023 vs FY2022 (FTC Press Release). The practical rule has not changed — a company that reaches you by cold call about your car’s warranty is not the company to buy one from.
Most states give you a window to cancel for a full refund, and several cap what can be withheld. Two things people miss: the clock usually starts at delivery of the contract, not the car, and a pro-rata refund after that window is often still required.
| State | What the statute requires | Source |
|---|---|---|
| Florida | 60-day cancellation window; 100% refund minus claims paid; administrative fee capped at 5% of the premium | Florida Statutes §634.121 (Florida Senate) |
| New | 20 days from mailing (or 10 days if delivered at time of sale) minimum free-look window; full refund if no claim was made; 10%/month penalty on refunds not made within 30 days | New York Dept. of Financial Services |
| California | Vehicle Service Contract Provider's license required under Cal. Ins. Code §12800 | California Department of Insurance |
| Texas | Regulated by the Texas Department of Licensing and Regulation (Occupations Code Ch. 1304), alongside unrelated trades like barbering and elevator safety | Texas Department of Licensing and Regulation |
Which agency regulates these contracts differs by state — an insurance department in some, a general licensing body in others — which is why complaint routes differ too. Statutes read 12 September 2026; check your own state’s current text before relying on a figure.
If the honest answer is that the car is at the point where the repair bills are the problem, whether it is worth fixing at all is the prior question, and what a car costs to own puts the repair line in context against insurance and depreciation.
Every figure here is listed with its source, the date it describes and the verbatim quote it came from in this CSV. Free to reuse with a link back.
Where a widely repeated claim did not survive checking, we say so on the page rather than quietly dropping it. Anything we could not verify against a primary source is excluded entirely. Corrections address is on our press and data page.
On the largest public dataset, usually not: Consumer Reports found 55% of buyers never used the coverage and the median buyer saved nothing against the price. It shifts in favour when the car is a historically less reliable model with expensive parts, where owners both paid more and claimed more often.
No. The FTC states that a separately purchased extended warranty or vehicle service contract is not legally a warranty under federal law — it is a contract you buy, governed by its own terms, unlike the manufacturer warranty that comes with the car.
Consumer Reports' survey found no more than about $100 difference between factory-backed and third-party contracts, which contradicts the common claim of large dealer markups. Buyers of automaker-backed contracts did report higher satisfaction.
Usually yes within a free-look window, and the terms are set by state law. Florida requires a 60-day window with a full refund less claims paid and caps the administrative fee at 5%; New York requires at least 20 days from mailing, or 10 if handed over at sale.
Because it was one of the largest illegal robocall operations ever measured. The FCC found a single enterprise placed over 5 billion calls in three months of 2021 and finalised a $299,997,000 forfeiture in 2023. Never buy from an inbound cold call.
The FTC notes that accident damage and normal wear and tear are typically excluded. Pre-existing conditions are excluded too, and providers often require proof that scheduled maintenance was carried out.
Check the powertrain term, which runs longer than most people remember — 10 years or 100,000 miles for Hyundai and Kia original owners, 5 years or 60,000 miles for Toyota, Honda, Ford and Nissan. Buying cover that overlaps it is the most common way to waste money here.