Greg Brannon, AAA director of automotive engineering, told Automotive News last month that maintenance and repair costs have been “relatively stable over time,” though the category has seen prices increase. For example, “tire prices aren’t what they once were,” he said.
Brannon said an extended warranty serves as a “pretty good proxy” for the cost of unexpected repairs. Though such policies include a profit margin for the warranty provider, competition keeps the product’s price from getting too far above what the underwriter thinks it will pay out in losses, according to Brannon. “It’s cost competitive in the market,” he said.
AAA spokeswoman Brittany Moye said she couldn’t disclose how much of the 9.68 cents a mile would be spent on the extended warranty, calling this proprietary to AAA’s source. Brannon declined to reveal more about the extended warranties used in AAA’s calculations, calling this proprietary as well.