HOW MUCH DOES AN EXTENDED RV WARRANTY COST?

For recreational vehicle owners seeking the ultimate peace of mind for their home-away-from home, an extended warranty makes a lot of sense, and the internet contains numerous articles detailing the benefits of warranty coverage. But for those researching warranty plans, one question remains largely unanswered: “How much does an RV warranty cost?” Unfortunately, there is no simple answer. The cost for coverage varies wildly, which is why RV warranty companies ask RVers for information about their rig before providing a quote. Warranty prices can range from the $1,000s for a short-term travel-trailer plan to $20,000 with some companies for a top-of-the-line, high mileage motorhome. Several major factors affect the price of an RV Warranty:

1. Type of RV – Motorhomes (Class A,B, or C) are more expensive than towable RVs like 5th wheels, toy haulers, and travel trailers.
2. Make/model – Generally, the more expensive the RV, the more expensive the coverage.
3. Year and mileage – Older units are more likely to have issues, so coverage costs more.
4. Coverage level – Exclusionary plans are more expensive than listed-component ones.
5. Coverage length – Longer plans have a lower annual rate.
6. Full-time or commercial use – Units in constant use require an additional charge.
7. Where you buy – RV owners generally pay more when purchasing extended warranties from RV dealers, especially when financing the cost.

TYPE OF RV

Coverage is most expensive for motorhomes since they have both a coach with appliances and all the mechanical components of an automobile. For example, they often have two separate air conditioners—one in the dashboard for use while driving, and at least one for the coach. Plus, a mechanic charges a lot of money to repair engine, transmission, and drivetrain breakdowns. Among these, a Class A motorhome is the most expensive to cover due to size, while Class B and Class C RVs have similar pricing structures. Warranty coverage for towable RVs such as fifth wheels and travel trailers costs less because they do not have the most expensive covered items found on a motorhome. Major mechanical failures on the engine or transmission have a higher cost of repair than items like the water heater or refrigerator. The difference in premiums among towable types is often based on the size and features of each type. 5th wheel trailers and toy haulers are typically more expensive to cover than regular travel trailers.

MAKE & MODEL

More expensive models usually have more features and higher quality components, increasing repair costs, so service contracts for top-of-the-line RV models generally cost more than basic models.

Some RV manufacturers also design their vehicles with technicians in mind, making it cheaper to replace mechanical components or easier for the repair facility to complete the work. This may affect the price for coverage with some extended warranty providers.

YEAR & MILEAGE

The open road takes its toll on every rig that travels it, and living the RV lifestyle causes constant strain on all parts of the unit. This is something the dealership, the RV industry, and the repair facility understand well. It’s why a new unit is worth so much more, and why insurance coverage and warranties offer their best prices on new models and low-mileage late models.

An older unit or used RV is more likely than a new RV to have issues, so coverage is more expensive. By some warranty administrator’s estimates, 80% of recreational vehicles will need repairs by their fifth year of operation. By the eight year, almost all RVs will have needed repair at some point.

COVERAGE LEVEL

RV extended warranty costs also depend on the type of policy each RVer wants. There are two different types of coverage: exclusionary policies and listed component policies, also known as inclusionary plans or comprehensive coverage. For a thorough explanation, check out our blog post on the difference between exclusionary RV plans and inclusionary coverage.

Exclusionary policies actually contain fewer exclusions and offer more complete coverage than listed component policies. This makes them more expensive. Exclusionary contracts are also simpler and easier to understand. The best warranty product for your rig is a balance between the best price and the best fit for your needs.

Warranty options like extra coverage for wheels/tires and consequential damage also increase the price. Different companies offer different warranty add-ons. Consequential damage is not needed on exclusionary contracts, since the contract has already delineated exactly what issues will not be covered.

Roadside assistance is another popular warranty add-on. Roadside packages provide tow services alongside other emergency features that come in handy if you’re stuck on the side of the road.

The deductible you choose also affects the price—plans with a higher deductible will have a lower overall cost, but you will spend more with each trip to the repair facility.

COVERAGE LENGTH

Longer plans feature significantly lower annual rates for coverage. Since the longer the RV operates, the more likely it is to need major repairs, a longer plan makes a lot of financial sense to many RV owners.

The longest warranty periods are offered on new units. Because most new RVs receive a limited manufacturer’s warranty and are less likely to break down, a warranty salesperson can offer a rate that provides a huge discount compared to a plan purchased when the unit is a few years old. Often, a longer plan on a new unit is the same price or even cheaper than a shorter plan on an older model.

While at first glance, this seems to offer no real benefit to a new owner, there are a few pros to purchasing a warranty early in the RV’s life. First, the unit is protected immediately as the manufacturer warranty expires. An important thing to remember is that many manufacturer warranties cover different items for different lengths of time. By obtaining a warranty before the factory warranty begins to expire, RV owners ensure that protection on their unit never lapses.

FULL-TIME OR COMMERCIAL USE

RV extended warranty providers require an additional charge for RVs that are operated full-time or commercially. Since constant use exposes the RV to more strain, wear, and tear, the likelihood of major failures increases dramatically. However, as many full-timers can attest, a warranty can bring serious peace of mind to those truly living the RV life.

Full-time warranty add-ons often give extra protection to the RV—some warranty companies liken it to a homeowners insurance policy. Keep in mind, though, that insurance covers damage from accidents and nature, while warranties cover mechanical breakdown from regular use.

If you’re considering living in your RV year-round and trying to decide whether or not a warranty is worth it for you, check company reviews, RV forums, and even the Better Business Bureau to see what other RV owners say.

WHERE YOU BUY

There are two ways to purchase an extended RV warranty: from the dealership at the time of the RV purchase; or from a warranty company. Because dealers potentially receive more money from the sale of the warranty policy than from the recreational vehicle itself, their coverage is almost always more expensive than coverage purchased from a warranty company. This is especially true of exclusionary contracts purchased through the dealer.

Just because it’s the most expensive doesn’t mean it’s the best coverage. Often the dealer’s warranty covers the same items, and is in fact the same warranty policy as the warranty company’s coverage, but at a higher rate, especially if the RV buyer is financing the purchase.

In that case, dealers roll the warranty cost into the overall loan amount, meaning that the RV buyer is paying interest on their warranty. That interest can sometimes amount to thousands of dollars in the long run. In contrast, RV extended warranty companies do not charge interest on payment plans.

Plans financed through dealerships have less convenient refund policies as well. Since the plan is financed, customers don’t receive an immediate refund. Instead, they simply pay fewer payments on the financed amount, meaning that customers don’t see any of that money back until the very end of their payments. Plans purchased directly from a warranty company generally offer reviews within 30 days.

By purchasing from an extended warranty company directly, you also have the ability to investigate whether or not you’re getting a good deal or signing up with a reputable company. You can save money on RV repairs in the future by taking a moment in the present rather than simply taking the word of an RV dealer who may never see you again.

Researching the fine print is a good idea as well, so be wary of salespeople who won’t share their documentation. Any company with a good reputation will make their contracts available online.

Warranty shoppers should also make sure that the company they purchase from is backed by an insurance company. Some less scrupulous companies are backed by risk retention groups, which is less trustworthy. The insurance company that backs the warranty company ensures that customers still receive their coverage, even if the company goes under. Risk retention groups do not offer the same guarantee.

The bottom line: not all RV warranty coverage is created equal.

WHAT MAKES AN RV WARRANTY WORTH IT?

An extended warranty for your RV is a vehicle service contract between you and the warranty provider. This service plan provides for RV repairs after your RV manufacturer’s warranty runs out.

A warranty functions as a protection plan for when an RV breaks due to mechanical failure—the failures that come with routine use over time. When failures cause costly repairs, warranty holders only have to pay their deductible for covered repairs. The warranty company pays the rest of the bill directly to the RV repair facility. Rather than tens of thousands for a diesel engine repair, RV owners could potentially pay a hundred dollars.

An extended warranty is not an insurance policy, and is not meant to fix your vehicle when it’s in the service center because of a collision or other physical damage. In the event of a collision with another vehicle, a warranty will not cover the other vehicle, either—that’s liability coverage, which is available through an insurance company. Note, however, that many warranty providers offer roadside assistance for emergency mechanical breakdown and some accidents, such as flat tires and blowouts.

With most reputable coverage, the service plan can be used at any licensed repair facility in the United States or Canada.