Why Doesn’t CarEdge Sell Extended Warranties in California?

What vehicle are you interested in?

Last updated Apr 24, 2023

“We’re calling you to tell you about your vehicle’s extended warranty …” If you’re like most people, seemingly everyday you get a spam call from an “extended warranty” company. Extended warranties, officially known as vehicle service contracts (VSCs) suffer from a lack of information disclosure and are represented as something more than they are with marketing designed to sell instead of inform. VSCs can be a great benefit to car owners, especially when you know exactly what to expect and how it can help you.

We’ve been talking about VSCs (“Extended Warranties”) here at CarEdge, since we first started educating car buyers.  One of the first things we realized is that there was no one in the market providing honest information about VSCs to consumers. We decided to change that.

After conducting countless hours of research, and by leveraging our industry connections, we chose to partner with AUL Corporation to offer CarEdge members a VSC (“Extended Warranty”) at a great price. With AUL’s 31 years of experience in the industry and great customer reviews, we’re proud to work with them.

However, there is one issue: California is much more restrictive when it comes to VSCs. For this reason, we’re currently unable to sell them to California residents. 

Because transparency is important to us, today, we’ll take some time to discuss the reasons that we are currently unable to sell VSCs in California. We’ll also discuss the options that currently exist for California residents.

Remember, as a CarEdge member, you can schedule a FREE 15-minute consultation call with us to discuss VSCs. We’ll be happy to walk you through your VSC options. Create a free CarEdge account to schedule your call today.

Mechanical Breakdown Insurance: The “Extended Warranty” in California

Only one entity within the state of California can sell vehicle service contracts: car dealers. The car dealer lobbied the state of California to pass this monopolistic law that forbids any other business from selling vehicle service contracts to California residents who register their vehicle in the state.

So how do other third parties sell “extended warranties” in California? They actually sell mechanical breakdown insurance (MBI). Take note of the word “insurance,” as MBIs are actually regulated through the California Department of Insurance (CDI). 

As a consumer, when you buy MBI, you are essentially buying a contract between the insurance company and yourself, just like you would with any other kind of insurance. As such, the CDI will carefully scrutinize and regulate the rates and coverage provided by the insurance program.

MBI is similar to normal car insurance in that it’s well regulated for consumer protection. Even though it is technically an insurance policy, though, it functions much like any other vehicle service contract in California would.  

There are plenty of laws in California that regulate mechanical breakdown insurance. Because of these laws, the process is a little different than it is when you’re buying a standard extended warranty in other states. If you’re looking to dive deeply into this unique version of an “extended car warranty” in California, you can read more on the official California Department of Insurance website.

Mechanical breakdown insurance is the only form of mechanical coverage that can be purchased online in California. The CDI advises that consumers verify that any company that is selling MBI is licensed to sell it. To earn a license to sell an MBI policy, the policy itself has to be approved by the CDI. This means that they’ll go over every line, examine every level of coverage, and set standards that the company must abide by.

From the viewpoint of the consumer, the experience of using an MBI policy as compared to using a VSC will essentially be the same. It will simply feel like another form of an extended car warranty in California. You would take your car to a covered mechanic when a breakdown occurs and file a claim. From there, payment would be made directly to the shop by the coverage provider. 

But if you’re looking to buy a vehicle service contract in California, you still can. You just have a much smaller window to make your purchase decision and you’ll be limited in who you can purchase it from. Let’s take a look at when you can buy one and where you can get it.

Can You Even Buy a Vehicle Service Contract in California?

Do you want to take one guess as to when you can buy a vehicle service contract in California? That’s right…when you’re buying your car from a dealership. While the decision to restrict VSCs in California was done to protect consumers, it’s given dealerships far more leverage than they have in other states.

In most states, you can buy a VSC at any point in time (presuming your car is still eligible, according to the company’s criteria). However, those who are looking for a vehicle service contract in California can only buy their VSC from a dealership at the time that they are buying their car.

Unlike other states, VSCs sold in California have special requirements, too. A VSC must list the dealership itself as the obligor of the contract, rather than a third-party company, such as the AUL Corporation. The dealership must also work with a backup insurance company that will cover any repairs that they deny.

In essence, you can still buy a vehicle service contract in California, but you will likely end up paying too much for it. Remember, you can still negotiate the price of a VSC if you are going to be buying it at a car dealership.

When Will CarEdge Sell an Extended Car Warranty in California?

We are currently exploring every avenue that will allow us to sell a top-quality MBI policy in California. Our partner, AUL Corporation does offer a MBI product in California, and we are actively pursuing the required licensing to be able to sell to our members in California.

Our stance on extended warranties is that every consumer should research their costs for common repairs, consider how long they’re going to keep their car, and consider their tolerance for risk. Anyone who comes out of that process with the decision that it’s time to buy an extended warranty should be able to buy one from a top-quality, transparent provider, even if they live in California.

We want our members in California to have the exact coverage that they’re looking for, while being able to negotiate a great deal for their policy.  Keep checking our site for updates on this situation. We’ll do our best to keep all of our California members informed about when they will be able to buy a mechanical breakdown insurance policy from our partners.

Vehicle Service Contracts in Other States

For our members in other states, if you’re thinking about purchasing an extended warranty for your car, we recommend you get a quote from CarEdge. We will always be transparent in our pricing. Our current price model is to charge a flat $500 markup on all our VSCs. We will even offer a free consultation call to help you determine whether a VSC is the right decision for you. When you are ready to buy, you can now purchase a plan 100% online through CarEdge.

CarEdge vehicle service contract
In CarEdge account you can “self-quote” your VSC


  1. Joe Iseri

    Do I have to negotiate and purchase the VSC at the actual dealer that I purchased the vehicle from, or can I “shop around” at other Dealers (same maker, of course) after I purchased the vehicle?

  2. Joe Iseri

    I’m sorry, not sure if I needed to inform you that I live in California in my previous comment submission.

  3. Peter Brenner

    You mentioned AUL does offer a MBI in California . How does one go about contacting them for coverage and cost?

    • Zach Shefska

      Peter, at present the best option would be to negotiate with multiple dealers until we’re able to offer it. I wish I had a better answer.

  4. Mark Chandler

    You do not offer VSC’s in Massachusetts as well. I guess it is the same thing sort of. I can get an MBI from car max when I asked. Are you going to do the same sort of things here and in Florida where you can not sell VSC’s.

    • Zach Shefska

      Correct, Mark. We are working on being able to offer solutions in those three states.

  5. John

    Since you can’t offer a vsc in Florida I was looking at one offered by my local Ford dealer on a recent purchase, 2011 escape limited with 42k, one owner, excellent, serviced at the dealer every 4000 miles+-.
    The dealers pricing is $1800 for a 2yr, 24k bumper to bumper, 100 ded.

    • Zach Shefska

      John, use our quote to have a basis for comparison.

  6. Rudy

    Are you still not able to offer MBIs or VSCs in California? I purchased a 2022 Toyota Tundra and declined the extended warranty because I was going to buy from CarEdge when I stumbled upon this gut wrenching comment section.


Submit a Comment

Your email address will not be published. Required fields are marked *


The latest insights
right in your inbox

Get the latest car trends and money-saving strategies, once a week.

By signing up, you agree to CarEdge's Privacy Policy and Terms & Conditions.

Share This