Why more Aussies are turning to extended warranties

With the cost of used cars rising and modern vehicles becoming more complex, repairs are more expensive than ever. Even small components can cost thousands to replace because they are tightly connected to technology and electrical systems.

At the same time, people are keeping their vehicles longer, driving fewer kilometres and relying more on private transport. All of these factors have made extended warranties increasingly appealing.

Still, extended warranties are not one size fits all. Understanding the advantages and limitations first will help you decide if it is the right fit for your situation.

The Pros of a Used Car Extended Warranty

  1. ‍Protection from major repair costs
    • One serious fault can derail your budget. Engines, gearboxes, turbos, alternators and modern electronics can easily run into the thousands.
    • A good extended warranty shields you from these big, unexpected costs and helps keep you on the road.‍
  2. Predictable and manageable expenses
    • Instead of worrying about what might break next, a warranty gives you a set cost upfront or through manageable monthly payments. Budgeting becomes simpler and far less stressful
    • Many warranties require the entire amount upfront. Auto Auto solves this with monthly subscription payments, but this isn’t an industry standard.
  3. Peace of mind, every time you drive
    • If your car is older, high-tech or outside its factory warranty, the uncertainty can be unnerving.
    • A warranty covers eligible failures and allows you to enjoy the convenience of your car without constantly thinking about the ‘what if’.‍
  4. Extra confidence when buying a second hand car
    • Used cars come with unknown histories. Even a well-maintained car can have hidden issues.
    • An extended warranty reduces the risk and gives you confidence as the next owner.‍
  5. Transferable warranties can boost resale
    • Many warranties are transferrable to the next owner, making your car more attractive if you choose to sell.
    • Buyers love knowing the car is still protected.‍
  6. Simple claims support
    • Instead of negotiating with mechanics or wondering what to do next, a warranty provider handles the process.
    • Auto Auto’s online system makes it easy, fast and transparent.

The Cons of a Used Car Extended Warranty

  1. ‍You may not need it if you still have a factory warranty
    • If your manufacturer warranty still has years left, an extended warranty may overlap.
    • The best time to buy is usually as your factory warranty is ending.
  2. ‍Not all warranties offer strong coverage
    • Some providers limit claim amounts, exclude key components or require you to service the car at specific dealerships.
    • Cheap warranties often come with catches.‍
  3. You might not claim enough to justify the cost
    • If your car is extremely reliable or very lightly used, you may not end up using the warranty at all.
    • Some drivers prefer to self-insure.‍
  4. Confusing terms from old-style providers
    • Traditional warranty providers often rely on complex fine print or pressured sales tactics.
    • This can make the whole process feel uncertain or unclear.

Who should consider an extended warranty?

You might benefit from a used car extended warranty if you:

  • Plan to keep your car for several years
  • Drive an older or higher kilometre vehicle
  • Want predictable costs instead of unpredictable bills
  • Cannot absorb a large, sudden repair expense
  • Prefer ongoing cover beyond factory protections

It may be less essential if:

  • Your car is still under a long manufacturer warranty
  • You replace cars frequently
  • You have a strong emergency savings buffer

How extended warranties compare to your legal rights

Australian Consumer Law provides consumer guarantees that apply to every used-car sale. These protections require the car to be safe, reliable and as described at the time of purchase.

However, these rights do not cover new mechanical failures that happen months or years after you buy the car. An extended warranty fills that gap by protecting you against ongoing breakdowns long after standard protections have ended.

If you are unsure about your existing rights, you can read our guide: Used Car Warranty Rights Australia in the Auto Auto Glossary.

The takeaway: are used car extended warranties worth it?

They can be an excellent investment, especially for cars with costly parts, complex electronics or drivers who want predictable motoring costs. The key is choosing a transparent provider with solid coverage and clear terms.

Auto Auto makes this easy with flexible monthly subscription payments, no lock in contracts and a 60 second online sign up. You can take out your extended cover when it suits you and cancel anytime.

If you want to see what coverage looks like for your car, you can check your rego and get a quote online. It is quick, simple and designed to give Australian drivers confidence.

Stay Protected with a Flexible Warranty Subscription

With long wait times for new vehicles, many Australians are keeping their current cars longer and Auto Auto’s extended warranty subscriptions make that decision easier.

Our subscription model replaces the need for large upfront payments with simple, monthly billing. You can start your cover when it suits you, keep it for as long as you need, and cancel anytime without penalties. It’s protection built for flexibility, backed by over 30 years of industry experience and trusted by thousands of Australian drivers.

A car warranty subscription ensures your vehicle stays covered while you wait for new car stock to return, giving you peace of mind that you’re protected from costly repairs in the meantime.