Are Extended Warranties Worth It in Canada? A Trusted Mechanic’s Take

💡 Note: This post was originally written in 2005. While extended warranties have become more sophisticated (and sometimes more aggressive in sales tactics), the decision-making process behind them hasn’t changed much: it’s still all about trust, timing, and risk tolerance.

Back then, I saw buying extended warranties as a “mug’s game”—a gamble you’re likely to lose. But one winter, after hearing the advice of a mechanic I trusted implicitly, I changed my tune. His comment was simple but weighty: “You should get the extended warranty.” That moment still resonates, and it’s a reminder that sometimes, context and trust outweigh theory.

Normally, I view buying extended warranties as a “mug’s game”. They are not worth the money you pay. However, when my mechanic said, “You should get the extended warranty” after he put my snow tires on, I took his advice.

I have stated before if you can find the following professionals and trust them, you are doing well:

1. Mechanic
2. Dentist
3. Doctor
4. Lawyer
5. Financial Planner
6. General Home Contractor/Plumber

Now the financial planner one, remember, as with all professionals get recommendations from people you know and TRUST! They should not be insulted if you ask for referrals, and if you don’t know the person doing the referral, then find someone you do know. You are giving this person free reign with your finances, so you had better trust them!

Insider Jokes & Lesser-Known Truths About Warranties

What insiders joke about that outsiders don’t know:
In the car world, there’s a running joke:

“The only thing guaranteed with an extended warranty is that the coffee in the waiting room is still free.”

Warranty insiders—especially dealership finance reps—know the profit margins on extended warranties can be huge. These plans are often more about revenue than protection. Many salespeople privately admit that most extended warranty claims are denied due to “fine print” exclusions. Claims often fail because parts aren’t technically covered under wear and tear clauses.

Another inside joke goes:

“You’re buying peace of mind—until you try to use it.”

And the wild part? Some dealerships get bonuses for pushing third-party warranties that are worse than the manufacturer’s. Always read the terms, and when possible, stick to warranties backed directly by the car’s brand.

What Would Shock People About Warranties (Canada-specific)

What shocks many Canadians:

• Warranties may already be included in your credit card benefits. Many Visa or MasterCard products automatically double the manufacturer’s warranty—yet most consumers still pay extra for store-based plans.
  • Check this Visa Canada example
• The hardest part isn’t buying a warranty—it’s claiming it. Many third-party warranty companies make you jump through hoops, require paperwork faxes (yes, still!), and delay reimbursements.
• Manufacturer parts exclusions: Even when you buy the manufacturer’s own plan, the fine print may exclude common failure parts like seals, hoses, or electrical sensors.

It’s also shocking how aggressively extended warranties are now upsold, especially for appliances, electronics, and vehicles. You’ll notice kiosks at big-box stores like Best Buy. Canadian Tire also has these kiosks. They practically beg you to add one at checkout.

Warranties

• Warranties? why would you get one? Maybe you just need a good support structure?
• Warranties (Part ii) for cars? Are extended warranties worth the money? Yes, in my case.
• Warranties (again) are they worth having? More discussions on that topic.
• Warranties and Computers – should you really pay for this? I don’t but I can usually repair it myself, except Apple products.
• Warranties a Final Thought – what parameters should you consider in your decision
• Extended Warranties: An Update explains why the extended warranty on my van saved me.