When you purchase a brand-new vehicle, you also receive a Garantía de Fábrica. This is the manufacturer’s promise to repair or replace any mechanical components that fail due to fault within a predetermined number of years or miles traveled (whichever milestone comes first).

This is great while it lasts. However, once the factory warranty expires, you’re responsible for any future repair bills — unless you’ve invested in an extended car warranty.

Usually purchased through a dealership or third-party provider, extended car warranties protect drivers from the rising cost of car ownership. But they didn’t always exist. The coverage plans of today are the result of decades of evolution, with providers tweaking products in response to an ever-changing market.

This comprehensive guide to the history of extended car warranties (also known as contratos de servicio de vehículos) will take you from the humble beginnings of auto protection right up to present-day programs. Keep reading for everything you need to know.

The Early Days: The Birth of Automobile Warranties

To give you the full picture, we need to go all the way back to the beginning, starting with the origins of factory warranties and how they became standard practice.

The Origins of Car Warranties

Factory warranties have come as standard with new vehicles for such a long time now, and you’d be forgiven for thinking the first automobiles also included one. However, when the Ford Motor Company first introduced the game-changing Model T in 1908, your only protection was a personal promise from Henry Ford himself: “Twenty-five thousand successful cars bearing the Ford imprint are in use today and are just so many testimonials of Ford success. This is your guarantee when you buy a Ford car.”

A little later, the Maxwell Motor Company (an ancestor of the Chrysler Corporation) gave anyone who bought its Maxwell cars a legally binding 90-day warranty against defects, but tires, rims, magnetos, coils, batteries, or lamps were excluded. While this was a good start, it wasn’t particularly user-friendly, as customers also had to bring any broken components to the Maxwell factory at their own expense.

It took until the mid-1920s for Ford to take note and start offering a legally binding warranty of its own. They introduced a 90-day warranty for parts and a 30-day warranty for labor on all American-market vehicles, which became an industry standard over the next few decades.

The Expansion of Warranty Coverage

As time passed, the development of better car components meant better warranties for consumers. By the late 1950s, advancements in automotive technology meant that new vehicles took longer to experience their first breakdown and also broke down less frequently. By the 1960s, manufacturers began extending powertrain warranties well past 90 days, but the Ford Motor Company went one step further for its customers.

Buyers of the 1961 Lincoln Continental were the first to be given a much more reassuring one-year or 12,000-mile bumper-to-bumper warranty (with a few exceptions, of course). Just one year later, new Continentals doubled that warranty to two years or 24,000 miles, with other Ford and Mercury models adding on identical coverage not long after. At this point, warranties became much more than a guarantee: they became a selling point. Buyers would consider whether a car came with a warranty, much in the same way they would consider a bigger engine or luxury upholstery. Naturally, other manufacturers began following suit.

The Rise of Extended Warranties: Meeting Consumer Demand

Having a factory warranty watching your back whenever you’re out on the road is great for driving with confidence. Should anything break down, you can rest easy knowing it will be repaired quickly and efficiently without impacting your wallet. But all good things must come to an end, and no one enjoys the risk of an expensive repair bill looming over them. As a result, there was a demand for an all-new product: the extended warranty/vehicle service contract.

Vehicle service contracts have existed in some form or other since the late 1950s, but they only really became popular around the 1970s. After spending years drumming up the importance of a 3-year/30,000-mile or 5-year/50,000-mile factory warranty, the increasing complexity of vehicle components led many manufacturers to reduce the length of their coverage or make it less comprehensive. Customers didn’t like the idea of driving without protection after the manufacturer’s warranty expired, leading to a rise in extended warranty purchases.

The Evolution of Coverage: From Basic to Comprehensive

The most important system under the hood is without doubt the powertrain, which works in synergy to power a vehicle forwards. It makes sense then that many extended warranty companies first introduced a basic plan that focused on the powertrain specifically, allowing consumers to protect the more crucial (and expensive) components if their budget was on the smaller side.

The beauty of factory warranties, though, is that they are so comprehensive, and it gives you enormous confidence to know that almost every component between your bumpers is protected while coverage is active. While extended warranty providers can’t usually match this like for like, they understand that customers want the most peace of mind possible and, therefore, introduced exclusionary plans that are as close to a factory warranty as you can expect.

Of course, some customers might want something more in the middle, which led to the introduction of stated component plans. Providers will often have varying levels of inclusionary coverage to choose from, ranging from a ‘powertrain plus’ option right up to something almost (but not quite) exclusionary.

As cars have developed over time, so have their components, which has led to new parts and systems being added to extended warranty plans. Electric vehicles (EVs), for example, have had a huge impact, with some providers introducing plans specifically for them. While some of the more high-tech components aren’t generally covered under standard programs, many providers will offer ‘add-on’ coverage at an extra cost. Ultimately, providers want to give customers the option to protect as much or as little as they desire, with the only exception being the ‘wear and tear’ parts that are designed to be replaced regularly (e.g., bulbs, windshield wipers, and batteries).

The Role of Third-Party Providers: Expanding the Market

As the extended warranty industry began to pick up speed in the 1970s, the vast majority of plans weren’t insured. When claims rolled in, many providers found themselves unable to pay out—leading to them going out of business. To cut a long story short, these tumultuous times resulted in a number of regulatory changes, and it became a legal requirement for providers to obtain insurance backing for any coverage offered. This forced a lot of bad actors out but set the stage for third-party providers to enter the scene and thrive.

The 1990s saw a boom in third-party options as customers sought a more cost-effective way to protect their automobiles. Efforts were made to standardize warranty terms across the country, making them easier to understand and, therefore, allowing drivers to compare providers and their benefits in an easy way. This combination of greater confidence and comprehension made third-party extended warranties, and vehicle service contracts much more accessible and much more popular than the pricier plans offered by dealerships.

The Digital Age: Innovations in Extended Warranty Services

The introduction of home computing, the internet, and smartphones was undeniably revolutionary, and it inevitably led to innovations in extended warranty services, too. Most providers now operate online, with a central hub where customers can log in, see plan details, and make claims. Some of the more forward-thinking providers even have smartphone apps, putting all the most important information right in the palm of your hand.

Big data has also allowed providers to develop better products. With real-time access to claims statistics at scale, they can see what customers require right now and predict what they might want in the near future. Rather than being reactionary, they can be proactive in their approach to programs and benefits, ensuring plan holders receive maximum value for money at all times.

Endurance: Leading the Way in Modern Extended Warranties

Hay plenty of auto protection plan providers to choose from, but none have a reputation quite like Endurance. Serving American drivers for almost two decades, we’ve helped thousands of drivers save big on the cost of car ownership by protecting them from unexpected repair bills. Our market-leading, regulation-compliant coverage plans cater to a wide range of circumstances, whether you’d just like to protect your powertrain or want the driving confidence that only a more comprehensive plan can offer. Unlike dealerships, we’re also willing to be flexible with coverage, so whatever your needs and budget, our award-winning customer service team can tweak specifics to suit you better individually.

Choose Endurance, and not only do you get America’s most trusted coverage, but you also get the country’s best added benefits. All Endurance plans come with Asistencia en carretera 24 horas al día, 7 días a la semana (including towing, fuel delivery, and lockout services), rental car reimbursement, and trip-interruption costs as standard. On top of that, every Endurance customer can activate a year of our Paquete de beneficios Élite, which adds on up to four tire repairs or replacements annually, key fob replacement, up to $500 in collision discounts, up to $1,000 in total loss protection, and more.*

We’re always ahead of the curve when it comes to technology, but we also appreciate that nothing beats a human touch. To give you the best of both worlds, our advisors are always on hand to respond to your queries via phone or email. We also developed the Aplicación para teléfono inteligente Endurance to give you easy access to all the most important plan information at the touch of a button. Better yet, we’re one of the few third-party vehicle service contract providers to be the direct administrator of all our plans, meaning no layers of middlemen to deal with when you come to make a claim.

Protect Your Used Vehicle with America’s Best Coverage

It’s been decades since the dawn of extended auto warranties, with providers setting up shop all across America. So many choices can make the decision process overwhelming, but if you’re a used car owner, there’s only one name you need to know. Endurance’s wide range of coverage options offers an plan de protección automática for every driver — even high-mileage vehicle owners and select luxury cars. We also include a selection of market-leading benefits as standard with every plan, giving you the added protection you need for total confidence out on the road.

For more information on how we can protect you from the cost of unexpected component failure, contact an Endurance plan advisor at (800) 253-8203 o Solicite una cotización GRATIS. Tú también puedes shop our eStore for instant plan recommendations and pricing.

You can find plenty more reading material on our extended warranty blog, including a provider comparison series, advice on preventative maintenance, FAQs, and much more.