2024 was an exciting year for the electric vehicle industry. Global sales of EVs grew 26% to 17.1 million units, far faster than the 1.7% increase in the sector overall (according to S&P Global Mobility). A flood of new EV models has stimulated demand in the new car market, while a growing number of EVs from earlier model years have triggered growth in the used car  market. Through October, used EV sales were up 64% in 2024, proving the sustained demand for pre-owned  electric vehicles.

This growth in used EVs naturally comes with strings attached. A basic warranty (commonly referred to as bumper-to-bumper coverage) typically lasts at most 5 years or 60,000 miles. The high voltage battery gets a few extra years (in the case of Tesla, the drive unit is included in the battery warranty). 

The  American car owner has high expectations. With the average age of all U.S. cars approaching 13 years, it’s clear we like to keep our wheels running for a long time. But it’s not just for automotive love; there are some very pragmatic reasons why we don’t switch cars like outfits. On the negative side, rising insurance and maintenance costs. On the positive side, the average sales price of a used vehicle (read: stronger retained value) is also rising, and in terms of reliability, cars built in the past 10-15 years are more reliable than the cars of decades past. All of this gives drivers a better chance of getting more bang for our buck. Not to mention that shopping for a new car gives people anxiety—over three-quarters of Americans don’t trust dealerships, per a KPA survey. Dealing with new vehicle paperwork from the bank, or the insurance company, or the DMV does not help matters.

For EV owners, it is in these later years that big-ticket repairs can creep in. Replacing an electric motor could cost up to $9,000 – and a battery replacement can run you as much as $20,000. For this reason, coverage beyond the factory warranty is essential—for peace of mind and financial stability. But not all warranty plans are created equal– and knowing what to look for can save you money, time and stress.

The EV-ICE delta

To start, it is important to understand how EV and ICE (internal combustion engine) warranties differ.

Certain components, most notably the electric motor and battery, are absent in ICE cars, and add cost and complexity to the electric vehicle’s maintenance profile. In other respects, the EV is much simpler: some types of maintenance are unnecessary, such as oil changes, spark plugs, or timing belts. Dealership Service Departments, accustomed to servicing ICE cars, often lack the experience of servicing EVs, which increases the risk of delays, errors, and costly mistakes. In fact, for dealers, the most profit is generated in the service department; this is one of the main reasons why dealers often try to discourage people from buying EVs, and why they try to maximize the cost of any post-purchase services. They know the likelihood their EV customers will return for service is a lot smaller than in the case of their ICE drivers.

You would never visit the eye doctor for a root canal. Nor would you hire an electrician to fix your leaky toilet. It is no different with extended warranties—they should be written specifically for the product they cover. Only a warranty designed from the ground up to protect EVs—ideally by people who are EV drivers themselves, and who’ve worked in the EV space—will properly insulate you from risk.

Key factors to compare in EV extended warranty plans

When evaluating EV extended warranty options, consider five key factors:

1. Provider reputation: Does the EV extended warranty provider have good reviews? Are EVs a key focus or is their EV warranty just one of many products they offer? When you talk to their customer service, do they sound like an organization that cares? Do they pick up the phone?

2. Cost vs. value: How will the warranty impact your long-term ownership costs? Will your projected maintenance savings outweigh the warranty expense? Is the warranty transferable, which would boost your EV’s resale value? Equally important, are you able to cancel the policy for a pro-rated refund (i.e. does the warranty hold its own value)?

3. Plan flexibility: Does the provider have flexible options that fit not only your vehicle, but your budget and lifestyle? Do you have a choice of payment plans? Can you choose different coverage levels and term lengths

4. Claims process: How quick and convenient is the process of filing a claim? Are you able to file online or via an app? Does it work with EV service centers or direct-to-consumer service models? Can you schedule service without messy paperwork? Are approvals handled quickly? 

5. Transparency: Be sure you review the contract and any other relevant documentation before you sign. If the company you’re considering doesn’t show you the terms of the contract before you buy, consider that a red flag.

Of course, there are always pitfalls to avoid:

1. The fine print: As with any contract, it is important to read every word in the fine print—even if the sales rep has explained it clearly. Verbal affirmations are not legally binding. A contract should be a selling point, not a barrier.

2. One size doesn't fit all: Watch for generic warranties that don’t cover EV-specific issues. If it looks and reads like an ICE-specific warranty, it’s not an EV warranty.

3. Do the numbers add up? Collect quotes and project the monthly cost of warranty payments according to different ownership scenarios. Monthly subscriptions might look cheaper in the short-term, but tend to run higher than fixed-contract overall.

4. Service network: Consider the extent, proximity, and quality of the service network. A warranty might look good until it’s time to have work done, and you learn that your repair options are limited, or non-existent.

5. Exclusions: Ask about policy exclusions — be direct and get very specific if necessary. Some examples:

- Rather than assume all battery issues are covered, find out if battery degradation is covered below a specific percentage.

- See if the policy covers components that have been re-engineered or updated. EV manufacturers do at times upgrade to new types of parts if an old part fails.

- Timely software updates or scheduled maintenance may be required to maintain warranty validity.

- The use of non-recommended charging hardware or practices might void the warranty.

- Racing your EV might void the warranty.

- Other factors may apply, such as extreme weather damage, aftermarket modifications, or even specific driving habits.

An EV warranty should spell “peace of mind”

A big part of your EV purchase decision is about peace of mind. You’ve watched gas prices climb over the years, and going electric eliminates that concern. Those frequent mechanic bills will be a thing of the past. You have enjoyed the thrill of improved performance. You might even be sleeping better at night knowing that you’re part of the solution—the effort to reverse climate change.

If getting into an EV helps you on all of these levels, shouldn’t you also treat yourself to worry-free ownership?

•  Inspired by AppleCare, our warranty plans are built for simplicity and reliability during the claims process.

• As a fixed cost warranty provider, Xcelerate offers the option of a prorated refund if you cancel your warranty. – You can also opt to transfer the remaining coverage to a private buyer, a key selling feature when it is time to sell.

• Some warranty providers reserve the right to change terms of service (it’s in that fine print we warned you about). With XCare, you won’t have to worry about that.

• Unlike subscription-based, monthly-fee services, XCare offers coverage with retained value, transferable warranties and no hidden fees or dynamic pricing.

Built by and for the EV community, XCare EV Protection™ is the only EV warranty designed from the ground up to cover EVs and their unique service needs. No other coverage provides our level of protection for your EV.

To explore XCare plans or to contact us for personalized advice, click here.