Extended warranties have become a bit of a hot commodity in the last few decades. The unique thing about these warranties is that unlike the one that comes with your car, you can buy these from any company, not just the manufacturers themselves. Is it worth it to spend money on these, however? First, let’s dive into how they work.

What extended warranties cover varies. There are two major kinds of aftermarket warranties: Powertrain warranties, which cover the engine, transmission, and other basic driving components, and bumper-to-bumper warranties, which cover powertrain systems and also accessories like air conditioning and electrical components.

What extended warranties don’t cover are expendables – things that are supposed to wear out. Wiper blades and washer fluid, brake pads, tires, motor oil, and the like. They also don’t usually cover exterior things, like your paint condition or scratches.

So, what makes a warranty “worth it?” It depends on the vehicle. If you’re driving a vehicle like a Subaru with a non-turbo four cylinder engine, which are notorious for head gasket problems, yea, it’s probably a good idea. If you’re driving something with a great track record, however, you’re probably fine without. Other things, like if you have an emergency fund or the cost of the warranty should also factor in. Sometimes its cheaper to save for a big repair than to have a warranty for it. Simply put, research your vehicle and see what problems others are having, if any, and then make an informed decision.