Extended car warranties are legitimate products that could cover your vehicle for certain equipment breakdowns and mechanical failures. This optional coverage that goes beyond the standard factory warranty could pay some, or even all, of the costs associated with costly car repairs.
There are different types of car warranties and legal provisions that define your rights and warranty providers’ responsibilities when your car is under warranty. To learn more about your options for extended car warranties, and if these could be a way to protect your investment (and your wallet), keep reading.
What is a car warranty and how does it work?
Merriam-Webster defines a warranty as “a written guarantee of the integrity of a product and of the maker's responsibility for the repair or replacement of defective parts.” As applied to cars, the manufacturer may offer a type of warranty upon the sale of the car for a specific period of time. Not all warranties are written, however. Some are implied based on the circumstances in which you purchase the vehicle i.e., the state where it’s purchased, used vs. new, etc.
For instance, when you get a new car from the dealer, the industry standard for comprehensive bumper-to-bumper coverage is for 3 years or 36,000 miles, whichever comes first. This means that if something breaks down in the car, then any repairs or replacements are covered by the manufacturer. There are other warranties also built into the price of your new car (covered below), but this is the most common standard offering for this type of purchase.
Beyond the factory warranty, vehicle owners have the option to purchase an extended car warranty — alternately known as an auto protection plan or vehicle service contract (VSC) — that will cover certain repairs. An extended car warranty is not actually a warranty according to federal law. Instead, the products commonly referred to as extended car warranties are actually “optional contracts sold by vehicle manufacturers, dealers, or independent companies,” the FTC explains. “The contract seller agrees to perform (or pay for) certain repairs or services outlined in the contract.”
Types of car warranties
Just like you would search for insurance quotes or use a car insurance comparison tool in your quest for good car insurance coverage, you’ll want to do a diligent search for your car warranty options, too. The first step is understanding the car warranty coverage you may already have and then the options to enhance it.
Here’s a quick guide on the types of car warranties and what they cover.
Most new cars come with a powertrain warranty. Powertrain warranties cover the major components of the powertrain — basically, the parts that power the vehicle. This includes the engine, transmission, driveshafts, differentials and general internal workings of the engine. There are some powertrain warranties that may cover additional parts like the wheel bearings and hubs, axle shafts, exhaust intake and manifolds or other related parts.
Typical limits for powertrain warranties are for five years or 60,000 miles (5 years/60,000 miles), whichever comes first. Some manufacturers may offer these warranties for up to 10 years or 100,000 miles. When choosing a new car, the length of the powertrain warranty should be a consideration, because it can save you money should something go wrong.
Finally, you should know that your powertrain warranty may not cover everything under the hood. Your vehicle manufacturers may consider some parts subject to normal wear and tear, so they don’t cover them. Parts like the battery, clutch and certain drive belts are typically excluded from warranty claims. Make sure you understand all of the exclusions to this type of warranty before buying so you know what’s covered and what’s not.
A bumper-to-bumper warranty is also known as a comprehensive warranty. This kind of warranty, from the original manufacturer, is standard with most new car purchases.
The idea is that it covers everything that could go wrong with your car, from bumper to bumper. However, there are some exclusions, like items that will fail with normal wear and tear, including, but not limited to: windshield wipers, tires, brake pads, brake rotors, light bulbs and window glass.
No matter if it's a manufacturer warranty or extended car warranty, there are always things that not covered — and therefore, there is no true bumper-to-bumper coverage. As always, it's critical to read the fine print of contracts to truly understand what is (and isn't) covered.
Rust and corrosion warranty
Most new vehicles come with a rust and corrosion warranty. This covers body sheet metal panels or aluminum body panels that become rusted or corroded. This corrosion generally can’t come as a result of occurrences like an accident, customer actions or extreme environmental conditions. This extended coverage can start at five years and may go up to 12 years, depending on the cause of the corrosion. This warranty may even stay in effect with a change in vehicle ownership.
Federal emission warranty
Not many people are aware that their new car purchase also comes with a federal emissions warranty as well. Suppose your vehicle fails an emissions test during the vehicle's first 2 years/24,000 miles (8 years/80,000 miles for specified major components). In that case, the manufacturer must make repairs or modifications so that your vehicle will pass the test. In California, your car could be eligible for up to 7 years/70,000 miles of coverage.
Accessory warranties provide coverage for additional vehicle systems and cabin components. They can boost coverage on cabin safety systems, such as airbags, seat belt restraints and exterior contact detection sensors. More comprehensive accessory warranties may include coverage for sound and video equipment, cabin fabrics, and interior paneling.
Note that when you buy certain parts for your car, they also come with their own warranty. Most parts are warrantied against manufacturer defects for 90 days from the date of purchase. To make a claim, you need to first return the part to the manufacturer, which must then approve your claim, before issuing a refund or replacement.
Extended Car Warranty
An extended car warranty can enhance the original manufacturer's warranty on a new car purchase or add more service protection to a used car.
If you’re getting a warranty for a used car, it will more than likely be considered a vehicle service contract (VSC) since federal law is very specific about the use of the term “warranty.” These service contracts can be helpful when it comes to covering unexpected repairs and breakdowns, but reading the fine print is key.
In some cases, you may have to pay a deductible and possibly be required to show that you have been properly maintaining the vehicle according to automaker guidelines, in order for repairs to be covered. The contracts can be complicated, and some customers are unpleasantly surprised when they find out that their problem is not covered, or that their preferred mechanic won't work with the extended car warranty provider.
For all of these reasons, if you plan to purchase an extended auto warranty, make sure you research providers and their reviews thoroughly. If you know how to buy car insurance, this concept won’t be foreign to you.
Once you settle on a company, get extreme clarity on what their extended warranty covers and excludes. This will help you choose the best extended car warranty product and avoid surprises if your claims are not approved.
What does a car warranty cover?
This will depend on the kind of warranty you have. Each warranty has precise language regarding what it will cover and what it won’t. When you receive the documentation accompanying your warranty, make special efforts to understand all the terms and conditions.
Pay special attention to parts, time periods, mileage and other terms that apply to the coverage in your warranty. Whenever you require maintenance or repairs, make it a habit to refer to your car warranty documentation or manufacturer recalls for issues that might already be covered.
What doesn’t a car warranty cover?
There are some car parts and incidents that may not be covered, such as normal wear and tear or reckless use. Routine maintenance such as oil changes and filter changes are generally not covered by warranties unless the contract specifically states that they are. Preexisting conditions — meaning problems with the vehicle that predate the purchase of an extended car warranty — are not covered, and owners must generally wait 30 days and/or drive the vehicle for 1,000 miles after the contract is signed before a warranty provider will consider a claim.
Car repairs needed in the aftermath of an accident are not covered either — that's what auto insurance is for.
If you have questions about exclusions, you should contact your manufacturer or the service provider administering your warranty. And, to avoid being on the hook for a surprise mechanic bill, you should discuss these issues before agreeing to any work being done on your car.
How much is a car warranty?
When you purchase a new car from the dealership, the manufacturer’s warranty is included, so there’s no additional charge. However, the cost for an extended car warranty can range anywhere from $1,000 to $4,000 or more depending on the type of warranty you go with and what kind of car you are covering: new, pre-owned, certified, etc.
How long does a car warranty last?
This will depend on the type of warranty you have and what it covers. Standard manufacturer warranties can last anywhere from 3 years/36,000 miles up to 10 years/10,000 miles. You can pay extra money, of course, to extend your warranty beyond these timeframes and mileage limits.
What voids a car warranty?
You can void your car warranty by adding certain modifications or by using your car in a way that the manufacturer did not intend, suggest or authorize, including but not limited to:
- Racing or other reckless uses
- Some commercial activities
- Unauthorized repairs by yourself or a repair shop
- Skipping out on regular maintenance
Natural disasters like floods or earthquakes can also void the warranty.
Car warranty vs. car insurance?
Car insurance covers damages to your car for covered incidents that could include collisions, natural disasters or other perils like a house fire — which a car warranty will not cover. A car warranty covers mechanical breakdowns and failure of parts and systems in your car resulting from manufacturer defects.
Summing it all up
An extended car warranty is basically insurance that covers some defects and repairs that aren't covered by auto insurance or the manufacturer warranty.
Although car warranties can be helpful, make sure you’re clear about your options before purchasing anything. Understand what coverage you already have in place and what it means to get additional protection for your car’s service needs. Between insurance coverage and warranty protection, you’ll be in a great position to protect both your vehicle and your pocketbook while keeping the cost of ownership as low as possible.
Car Warranty FAQ
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