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Engine Oil Leaks and Your Extended Warranty: What You Need to Know

BY: Andrew Giorgi
Mechanic under a car inspecting an oil leak

When it comes to keeping your vehicle in the best possible condition, there are few things more important than the oil and the oil delivery system. Regular oil changes and new oil filters can work wonders for your car and keep all the engine components in good working order for many years. Oil prevents friction in the engine block and helps regulate the temperature, keeping all the moving parts running smoothly. This is why it is so important to watch out for oil leaks and get them repaired as soon as you notice them.

An oil leak can be caused by several different things, and it is crucial that you find out what the issue is right away. When you buy a new car, it will come with a factory warranty that the manufacturer provides to help you pay for repairs that happen prematurely due to factory issues or design problems.

After this warranty is up, though, you will be responsible for any repairs, including oil leaks on your used car. An extended car warranty, which is more accurately called a vehicle service contract (VSC), is your best option if you want the protection your car needs. Knowing how an extended warranty can help you repair oil leaks and prevent serious engine issues will help you get your car back on the road and running smoothly for a long time.

The Basics of Engine Oil Leaks

Engine oil leaks are a fairly common issue for vehicles of all kinds, even late-model cars. Because the oil in your engine is under constant pressure, any inconsistency in the vehicle’s seals, gaskets, or components can become the source of an oil leak. Understanding some of the causes of a leak and the signs to watch out for can give you a good idea of when the time has come to bring your vehicle to the repair shop.

4 Common Causes of Oil Leaks

1. Loose Oil Filter or Oil Plug

One of the most common causes of oil leaks is also one of the cheapest to repair. When you get your vehicle’s oil changed, the technician at the repair facility will loosen the oil plug to drain the old oil and put in a new filter. If either of these things aren’t tightened down, they can leak oil quickly. Generally, you will notice a leak from one of these areas fairly soon after an oil change, and it will be a good indication that they are the culprit. Then, all that needs to be done is quickly tighten the filter or the plug, and the oil leak should be fixed.

2. Broken Oil Pan Gasket

Your engine’s oil pan sits at the bottom of the engine block, where the oil plug is located. There is a gasket that helps seal the joint between the pan and the block; over time, it can become damaged. The area under your vehicle is subject to a lot of heat, cold, and debris, which can be hard on the seals and gaskets. Even a small bit of damage to the gasket can cause a leak. Generally, all that needs to be done to repair this issue is a quick replacement of the gasket, and everything should be sealed up tight so no oil can make its way out of the pan.

3. Damaged Oil Pan

The oil pan can also be susceptible to damage, even if you are a careful driver. While the oil pan is usually made of high-quality steel or aluminum, road debris, and objects can damage it when moving at high speeds. You can also damage it by accidentally driving over things like parking dividers or curbs. Generally, you will notice a leak from a damaged oil pan right away, and the puddle that gets left behind will be fairly large. In most cases, the pan will need to be completely replaced to repair the issue.

4. Blown Head Gasket

The head gasket in your vehicle is a crucial component; if it blows, you could look at all kinds of issues, including an oil leak. The head gasket sits between the combustion chamber of the engine and the rest of the powertrain, sealing off the area for the most pressure. If the head gasket blows or deteriorates, an engine leak could be one of the symptoms.

You may also notice things like smoke from the exhaust due to coolant getting in the combustion chamber, overheating, and a loss of power. A head gasket replacement is one of the most labor-intensive car repairs, which makes it a fairly serious and expensive issue.

Identifying Signs of an Engine Oil Leak

Puddle Under the Car

One of the most common signs of an engine oil leak is a puddle under your vehicle after it has been sitting for a while. While a puddle under your car can be many different things, if it is black or amber in color, you can be sure it is oil. Look for small puddles, especially if your vehicle has been sitting for a long time. Even a small leak can be a big problem, and checking for puddles occasionally is a good idea.


If your vehicle leaks oil, the moving engine parts will not be lubricated like they should be. This means extra friction will be between things like the pistons and the camshaft. Most of the time, this will cause the engine to overheat, which you will notice through warning lights or smoke coming from the engine compartment. If your engine is allowed to overheat for too long, parts inside it can warp or deteriorate, causing serious problems and even a total loss of the vehicle.

Blue Exhaust Smoke

If oil is being let into areas of the combustion chamber where it should not be, it can mix with the fuel ignited by the spark plugs. It usually ends up in the exhaust system and gets expelled through the tailpipe as blue smoke. While some steam or emissions are common, solid smoke is a sign of a more serious issue. Blue smoke indicates that a seal or gasket somewhere in the powertrain has failed and is letting in oil.

Burning Oil Smell

The smell of burning oil is distinct and immediately apparent once it enters the vehicle’s cabin. If your car leaks oil somewhere in the engine, it will usually start to burn and cause a strong, acrid odor. Any time you notice a new smell, especially one that smells like it is burning, getting your vehicle to the repair shop as soon as possible is a good idea.

Coverage Aspects: Extended Warranties and Oil Leaks

Auto mechanic checks running gear of car and oil leakWhen a problem arises with your vehicle, you want to be sure that you have a protection plan in place that will help you pay for repairs so you can get back behind the wheel. A VSC can give you the coverage you need for all kinds of issues, many of which can be the cause of oil leaks. A VSC or extended warranty covers the most important components of your vehicle, including the engine, drive axle, and transmission. This is true even with basic coverage that only protects the powertrain. Since these will be the general areas where oil leaks start, a VSC can be an excellent defense against leaks and a great way to get them repaired as soon as they come up.

Remember that not all VSCs will cover gaskets and seals in their most basic powertrain coverage. Since gaskets and seals are susceptible to wear and will be some of the most common components to break down on an engine, they may be excluded from baseline coverage. You should always be sure to fully understand what your VSC covers and what is included with your plan before you decide it is right for you and your vehicle.

In the case of an oil leak due to a loose filter or oil plug, these fixes may not be covered under your plan if you don’t have maintenance coverage included. They will be fairly easy repairs to make, though, and should not cost you anything if they were the shop’s fault that did the oil change.

Navigating Your Extended Warranty

When you notice an oil leak in your vehicle, it is important to know what steps you should take and how to use your VSC to repair the vehicle. One of the first things you should do when you see a puddle or notice smoke is look at your dashboard to see if any warning lights have turned on. If so, it is a good idea to pull over and not drive your vehicle any more than you absolutely have to. This will prevent damage to the engine due to friction or overheating. After that, you should take a look at your VSC contract. There, you will find all the different components that are covered and what exclusions your contract has. This will give you a good idea of what causes will be covered and which will not.

Before you take your vehicle into the shop, check the engine’s oil level. This can be done using the vehicle’s dipstick. All you have to do is pull the dipstick out, wipe it clean with a cloth, put it back in the holder, and take it out again. There, you will see what the oil level is like in your vehicle and whether or not a significant amount of oil has leaked out. Take a photograph of the oil level on the dipstick as well as the puddle that has been left behind by your vehicle. This will help you explain the situation to the shop and your VSC provider.

The Claims Process for Car Leaking Oil Under Your Extended Warranty

The claim process for checking your oil leak will change from provider to provider. For the most part, you must take your vehicle to a certified repair shop to find out the oil leak repair cost. Sometimes, this will be the dealership where you purchased your coverage and other times, it will be any certified shop approved by your provider. Once there, the shop will look at the leak and diagnose the issue. If the necessary repair is covered by your protection plan, the shop will either work out the payment with your provider or give you documentation that you can then use for reimbursement. The important thing is to be sure that whatever component is the source of the leak is covered by your particular service contract.

During the claims process, you can expect to either have everything taken care of by the shop and your provider or submit documentation regarding the auto repair, including the photographs you took of the leak puddle and the oil level. The claims process is very specific to each individual vehicle protection provider, though the most reputable companies, such as Endurance, will try to make it as simple as possible. The best thing to do is make sure you are documenting every step you take. As a car owner, you should also keep track of your scheduled upkeep throughout its lifetime to show the provider that you have been staying on top of maintenance.

Preventative Measures and Regular Maintenance

While having a VSC in place to protect you and your vehicle from problems due to an oil leak can be reassuring, your best bet will always be to keep up with its maintenance. A vehicle regularly serviced and kept in good condition will be much less likely to develop an oil leak or other issues that can be incredibly expensive to repair. All of the components that make up your vehicle’s engine are related, and when one fails, you are much more likely to have issues with others. Things like oil changes, brake fluid flushes, transmission service, and tire rotations will help keep your car running smoothly.

If you want to prevent oil leaks in your vehicle, keeping it cool and lubricated will be your best bet. Getting oil changes at the factory-scheduled intervals will help reduce friction in the engine, which will keep it cooler. One of the main causes of broken seals and gaskets is high temperatures, and clean oil is a great way to reduce the risk of leaks. You should also ensure that your cooling system is always in good working order. Flushing the coolant regularly and getting the radiator checked frequently will ensure that your gaskets stay in good shape and that they won’t have to be replaced prematurely.

Leveraging Your Extended Warranty for Engine Health

Keeping your engine in good condition at all times is the best way to prevent oil leaks and avoid expensive auto repairs down the line. With a high-quality auto protection plan from Endurance, you can get things repaired as soon as they need it instead of waiting for the right time financially. This will ensure that your engine doesn’t develop leaks and that you can drive with confidence every time you get behind the wheel.

Endurance has customized automotive protection plans available for every situation, so you can get a protection plan for your vehicle, no matter what kind of driving you do. With options ranging from basic powertrain coverage all the way up to bumper-to-bumper exclusionary protection, there is something for nearly every car and every situation. Endurance also offers warranty coverage for vehicles other providers don’t, such as Canadian Gray Market vehicles, cars with a rebuilt or salvage title, or vehicles used for commercial purposes like rideshare or delivery.

Every Endurance vehicle protection plan also has standard benefits like 24/7 roadside assistance, towing, rental car coverage, and trip interruption protection. We also offer low monthly payments and a 30-day free-look period. Plus, for a small activation fee, you can access Elite Benefits, with extra perks like tire repairs, key fob replacement, and up to $1,000 in total loss coverage.

Contact our dedicated team at (800) 253-8203 to request a FREE quote and take advantage of our award-winning customer service. You can also check out our online store for an instant price preview to find the perfect plan for your budget and needs.

You can find more auto-expert resources on the Endurance blog. Explore FAQs, warranty provider comparisons, DIY maintenance tips and tricks, and more.

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