What is a Car Warranty? Types of Warranties, Warranty Coverage, and How to Get the Most Out of It

What is a Car Warranty?

A car warranty is a contract that provides protection against mechanical and structural defects in your car. The contract promises to cover the cost of repairing or replacing damaged parts for a specific length of time or mileage after purchase. These warranties can be purchased from a dealership or third party, or may come with the car through the manufacturer’s warranty. Warranties cover issues that the manufacturer considers to be defects and usually don’t cover accidents or normal wear and tear. They are a form of insurance for your vehicle and can save you money on costly repairs.

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Emergency Item

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Always Prepared Standard Roadside Emergency Car Kit (62 Pieces)

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Roadside Emergency Assistance Kit (110 Pieces)

Roadside Emergency Assistance Kit (110 Pieces)

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Jump Starter, SUNPOW 1500A

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Stalwart 75-BP1010 Electric Blanket-Heated 12V Polar Fleece

Stalwart 75-BP1010 Electric Blanket-Heated 12V Polar Fleece

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Types of Car Warranties

1. Manufacturer warranty

A manufacturer warranty is a type of warranty offered by car manufacturers that provides coverage for defective parts and workmanship flaws of a car. It is typically offered for new vehicles and certified pre-owned (CPO) cars, and its length is determined by a certain number of years or miles, whichever comes first. In most cases, the factory warranty is transferable between owners if it has not expired.

The most popular automakers in the U.S. vary in the types of warranties they offer. Generally, these manufacturers offer a bumper-to-bumper warranty, a powertrain warranty, a corrosion warranty, and roadside assistance. The bumper-to-bumper warranty typically covers most of the car’s components, while the powertrain warranty covers the engine and transmission components. The corrosion warranty covers rust damage, and roadside assistance is a service to cover any car troubles on the road.

2. Auto warranty

An auto warranty is a contract between an automaker and the owner of a vehicle that states the automaker will fix any defects or malfunctions that arise within the specified time frame. Warranties come in many different forms, such as bumper-to-bumper warranties, powertrain warranties, and extended warranties. Bumper-to-bumper warranties cover all parts of the car except for those specifically excluded, such as tires and oil changes, while powertrain warranties focus on the engine, transmission, and other drivetrain components. Finally, extended warranties provide coverage beyond the manufacturer’s warranty and can be purchased from dealerships or independent providers. It should be noted that coverage and terms will vary depending on the type of warranty you purchase.

3. Powertrain warranty

A powertrain warranty is a type of car warranty that covers the parts of the vehicle that allow it to move such as the engine, transmission, drive axles, driveshafts, seals, gaskets, differentials, and transfer case. Powertrain warranties from major manufacturers typically last from 4-10 years or 50,000-100,000 miles, whichever comes first. Factory powertrain warranties are usually the same or longer than bumper-to-bumper coverage, while extended warranties may also offer powertrain coverage plans. In addition to the engine and transmission, powertrain warranties can also include other parts such as cylinder blocks, camshafts, timing belts, wheel bearings and hubs, axle shafts, exhaust intake and manifolds, and other related components. However, some items may not be covered by warranty, such as the battery, clutch, and certain drive belts. It is important to understand all of the exclusions to this type of warranty before buying so you know what is and isn’t covered.

4. Mechanical defects

A mechanical defect is a fault or malfunction in the components of a vehicle such as the engine, transmission, or other parts. Common mechanical defects are caused by regular wear and tear, poor maintenance, or extreme heat or cold. Car warranties may cover some or all of the components inside a vehicle, and some may explicitly cover mechanical defects. Manufacturer-backed powertrain warranties, for example, often cover the cost of repairing or replacing defective powertrain-related components such as the engine, transmission, and drivetrain.

5. Corrosion warranty

A corrosion warranty is a type of car warranty that covers repairs or replacements of any sheet metal panels that rust through due to premature corrosion. This type of warranty is typically included in a new vehicle’s warranty package and is distinct from other car warranties, such as bumper-to-bumper and powertrain warranties, which cover more general mechanical issues. Corrosion warranties are designed to cover the costs of fixing rust damage that occurs to the vehicle’s outer panels as a result of moisture and salty air. While bumper-to-bumper and powertrain warranties may also cover some types of corrosion damage, they are typically not as comprehensive. Additionally, most used car warranty companies do not offer corrosion coverage.

6. Seat belt warranty

A seat belt warranty is a type of car warranties that covers repairs or replacements of any damages to a vehicle’s seat belts and airbags. It is different from other car warranties in that it offers a longer period of coverage, as it is typically offered for the life of the car, as opposed to the usual terms of 3 years or 36,000 miles for a bumper-to-bumper warranty. In addition, a seat belt warranty covers specific components, namely the seat belts and airbags, whereas other car warranties such as the bumper-to-bumper warranty cover a wider range of components and systems, from braking to fuel delivery to electronics and electrical systems.

7. Theft coverage

Car warranties typically do not offer theft coverage due to the fact that it relates to an external factor that is not related to the quality of the car itself. Theft coverage is typically offered through car insurance policies, which cover damage caused by accidents, theft, weather, or similar external factors. Through an auto insurance policy, you can receive coverage for theft of your car as well as damage caused by the theft of items from within the car.

8. Roadside assistance

Roadside assistance is a type of service that provides help for drivers in the event of a car breakdown. It typically includes tow trucks, battery recharging, flat-tire repair, and other roadside assistance services. Roadside assistance may be offered as an as-needed basis through a membership program or as an optional coverage that can be added to an auto insurance policy.

Car warranties can also offer roadside assistance coverage. Some car warranty providers include coverage for roadside assistance, but not all warranties include it. If you choose to get roadside assistance coverage through your warranty, it’s important to compare the cost of the coverage with what you would pay for it as an add-on to your auto insurance policy, as well as the specific services that are covered.

9. Air conditioning warranty

An air conditioning warranty is a type of extended car warranty that provides coverage for interior climate control systems, such as cabin heating and air conditioning. It pays to replace defective parts with new or reconditioned parts at the company’s discretion and covers labor. Car warranties that cover air conditioning may vary depending on the make and model of the car and may include bumper-to-bumper coverage, powertrain coverage, accessory coverage, and specialty warranties.

Bumper-to-bumper coverage typically covers damage to almost every component of your vehicle between the front and rear bumpers, such as braking, steering, and suspension, as well as fuel delivery, air conditioning, and heating.

Powertrain coverage may cover the cost of replacing a transmission that failed during everyday driving.

Accessory coverage provides coverage for additional vehicle systems and cabin components, such as airbags, seat belt restraints, and exterior contact detection sensors, as well as sound and video equipment, cabin fabrics, and interior paneling.

Specialty warranties of varying term lengths are also likely to be included in your car’s new vehicle warranty package, such as federal emissions warranty, corrosion/anti-rust/perforation warranty, hybrid vehicle warranty, safety restraint system warranty, and battery warranty.

10. Aftermarket warranties

Aftermarket warranties are service contracts that cover the costs of certain services beyond the scope of the manufacturer’s warranty or after the warranty ends. They are purchased separately from the car and are not considered actual warranties like a manufacturer’s warranty. While a manufacturer’s warranty typically covers defects and manufacturing faults, an aftermarket warranty can cover a wider range of services, such as road assistance, towing, and rental car coverage. Unlike a manufacturer’s warranty, an aftermarket warranty may have a deductible, and the customer may need to pay the mechanic and get reimbursed. Additionally, aftermarket warranties may not transfer to a new owner if the car is sold.

Coverage and Benefits of Car Warranties

1. Warranty coverage

Car warranties typically include several coverages and benefits. Bumper-to-bumper and powertrain warranties are the two most common types of coverage. Bumper-to-bumper warranties cover major systems such as brakes, suspension, electronics, and other parts of the car that are not covered by the powertrain warranty. Powertrain warranties cover the engine and transmission, as well as other related components. Additionally, car manufacturers may include several smaller coverages in the main warranty to comply with industry regulations or to expand coverage for uncommon vehicle systems. Specialty warranties of varying lengths can also be included in the new vehicle warranty package. These warranties may cover repairs for parts that are damaged due to normal wear and tear, defects in the manufacturer’s design or installation, or other causes not related to accidents or unexpected events.

2. What is covered by a car warranty?

A car warranty covers most parts and systems of your vehicle for a designated period of time, usually three years or 36,000 miles. This type of warranty, commonly referred to as a bumper-to-bumper warranty, covers damages due to mechanical failure or faulty materials or workmanship. It excludes wear and tear parts and routine maintenance. Additionally, extended warranties may offer coverage for things such as powertrain components, electronic systems, and other commonly damaged parts. Accidents, environmental damages, and other intentional damage are not included in a car warranty.

3. Warranty plans

When it comes to warranties for cars, there are three main types of plans available. The powertrain warranty is the least comprehensive, providing coverage only on the main components that generate power in a vehicle, such as the engine, transmission and drive axle assembly. The inclusionsary warranty, also known as a “named parts warranty”, only covers parts listed in the terms of the contract, and excludes any part not listed in the contract. This plan is considered middle tier, being more inclusive in coverage but still limited in scope. Lastly, the exclusionary warranty, also known as “bumper-to-bumper”, is the most comprehensive plan available, covering so many parts that it’s easier for the contract to state what parts aren’t covered. This is typically an extension of the manufacturer’s warranty. It is important to note that all warranties have clauses and limitations depending on the state in which you live, so it is important to read your contract carefully to understand what it covers and up to what limit, and to be aware of all exclusions.

4. Types of car warranties

Car warranties can be classified into two main categories: factory warranties and extended warranties. Factory warranties, also known as new car warranties, are issued by the car’s manufacturer and usually come included in the initial cost of your car. They usually last from three years or 36,000 miles to 10 years or 100,000 miles and cover defects and manufacturing faults, as well as corrosion and factory adjustments. Extended warranties are also known as used-car warranties, and they can be purchased from either the car’s manufacturer or a third-party company.

Within a factory warranty, you can find bumper-to-bumper and powertrain warranty plans. Bumper-to-bumper warranties cover most parts of the car, from the engine to the electrical system and from the body panels to the interior components. Powertrain warranties cover only the powertrain components, such as the engine, transmission, and drivetrain.

In addition to these two primary warranties, factory warranties often come with specialty warranties of varying term lengths. These include federal emissions warranties, corrosion or anti-rust warranties, hybrid vehicle warranties, safety restraint system warranties, and battery warranties.

Extended warranties may come with additional benefits, such as roadside assistance, towing, and rental car reimbursement. It is important to read the terms of the warranty carefully, as coverage and benefits may vary from company to company.

5. Manufacturer warranties

Manufacturer warranties for cars offer coverage and benefits for defects and manufacturing faults. Typical coverage lengths are based on a certain number of years or miles, whichever limit comes first. These warranties are usually transferable between owners if the coverage hasn’t expired when the car is sold. Benefits may vary from one car manufacturer to another, some offering more parts and longer coverage than others.

6. Car Warranty vs. Aftermarket Warranty

When considering the differences between a car warranty and an aftermarket warranty, it’s important to understand the coverage and benefits they offer. Car warranties, also known as service contracts, are purchased independently from the purchase of a new or used car and can extend certain protections of the original manufacturer’s warranty. These warranties typically cover parts that break due to normal wear and tear, extreme heat or cold, mechanical defect, vehicle recalls, or poor maintenance. They do not cover routine maintenance, oil changes, tire rotation, brake pads, routine wear and tear, mechanical breakdowns, or manufacturer defects. Aftermarket warranties are optional and provide the same coverage as a car warranty, plus the added benefit of being able to purchase them at any time.

On the other hand, car insurance is legally required and provides protection against accidents, theft, and any damage you cause to other vehicles or property while driving. It does not cover known issues or pre-existing issues in your car.

Overall, both car warranties and car insurance provide different coverage and benefits, and it’s important to understand the difference so that you can adequately protect your vehicle.

7. Coverage options

When it comes to car warranties, there are two main coverage options: a new car warranty and an extended warranty. New car warranties typically last until a certain number of miles have been driven or a certain number of years have passed, providing protection for covered repairs or replacements as a result of mistakes made during production. On the other hand, an extended warranty offers the option of prolonging the warranty coverage and can come in three tiers: entry-level powertrain, mid-level mixed coverage, and comprehensive bumper-to-bumper plans. Additionally, third-party providers may be able to offer more tailored coverage options, such as Endurance’s Supreme exclusionary plan.

8. Plan Exclusions

Car warranties usually have a variety of exclusions, including routine maintenance such as tune-ups, adjustments, alignments, tire replacement, oil and filter changes, and fluid refills; parts that are prone to wear and tear such as brake pads, tires, and clutches; betterment and consequential loss clauses; and cars used for commercial purposes such as taxis, commercial delivery vehicles, and ride-hailing services. Additionally, car warranties typically do not cover accidents, normal wear and tear, reckless use, pre-existing issues, repairs or replacement parts not included in your contract, unauthorized repairs, brake pads, shocks and struts, rubber hoses, and serpentine belts, exterior body damage, interior damage, fires, storms, flooding, falling objects, vandalism, and theft.

9. Costs and benefits

Car warranties can provide a variety of benefits and cost considerations when repairing your vehicle. On one hand, an extended auto warranty can save you from out-of-pocket repair costs and provide robust, extended protection. Furthermore, purchasing flexibility is available through different coverage options. On the other hand, extended auto warranties come with additional expenses, and may be of little use if no repairs are needed. Moreover, you may only receive coverage for certain expenses, and costs for warranties will continue to rise through 2022.

When deciding if an extended warranty is right for you, consider the costs and benefits. For example, the upfront and deductible costs could be expensive, depending on your budget. Furthermore, you may not receive reimbursement if the party supplying your extended warranty goes out of business. You also need to consider if your car’s repairs are covered by the service contract or a manufacturer’s warranty. Finally, while life insurance can provide peace of mind, an extended warranty might not be the right choice for everyone.

10. Questions to Ask When Buying a Car Warranty

When buying a car warranty, it is important to ask yourself the following questions: What does the car warranty cover? Do I need bumper-to-bumper coverage or just a basic powertrain warranty? Is my car reliable? How much does the warranty cost? Who should I purchase my warranty from? Are there conditions that come with the warranty? Is there a limit to the amount of money I can claim? Does the warranty have an excess? Is the servicing schedule acceptable? Is there a 14-day cooling off period? Does it state a limit for either my annual or total mileage? Can I only make a claim after a set period? Does the policy cover the full cost of repair? Is the warranty company registered with the ABI? Is there a maximum amount paid for labor costs? Which garages are on the list used for servicing and repair, and what are their locations and costs? Is my car approaching the maximum age allowed for a warranty? Do I understand all the terms used in the warranty agreement? Do I have manufacturer’s warranty and can I extend it? What are the different options when it comes to buying a warranty from an online provider?

How to Get the Most out of Your Car Warranty

Step 1: Determine what type of warranty your vehicle has

To determine what type of warranty your vehicle has, it is important to understand the mileage and date of purchase for the vehicle. The owner’s manual should have details about the warranty coverage that the car had when it was initially sold, so be sure to check that first. To find the mileage, check the odometer. If the mileage exceeds the warranty limit, it is no longer covered. If it is still within the limit, you will need to check the date of purchase. If you don’t know the original purchase date, write down the VIN (vehicle identification number) and call any dealership selling the same car brand. They will be able to look up the purchase date for you. If you are not the first owner of the car, you’ll need to ask whether the warranty was transferred to you when you bought the car. The answer is usually yes, but terms can change when a car is bought as a used vehicle. To understand the coverage of your warranty, pay special attention to parts, time periods, mileage, and other terms outlined in the warranty documentation. If you require maintenance or repairs, make sure to refer to the car warranty or manufacturer recalls to make sure they’re covered. You may also want to look into extended warranties to give you added protection.

Step 2: Learn about the coverage offered by your car manufacturer

Car manufacturers often offer auto warranties to protect consumers from costly repairs. Generally, these warranties will cover repairs or replacements for parts due to mistakes during production. Depending on the type of warranty you have, other components of your car, such as the powertrain or bumper-to-bumper coverage, may also be covered. In addition, many manufacturers also package smaller coverage options into their warranties. It is important to read the documentation accompanying your warranty to understand exactly what it covers and what it doesn’t. If you have any questions, you should contact your manufacturer or service provider to get clarification.

Step 3: Make sure that you’re familiar with the terms and conditions of the warranty

When using a car warranty, it is important to be familiar with the terms and conditions that apply. Make sure you understand all the parts, time periods, mileage, and other terms that apply to the warranty coverage. Additionally, check to see if there is a limit to the amount of money you can make a claim for, if there is an excess, if the servicing schedule is acceptable, if there is a standard 14-day cooling off period, and if the policy covers the full cost of repair. Furthermore, be sure to note if there is a maximum amount paid for labor costs, and if there is a list of garages used for servicing and repair and what their locations and costs are. It is also important to read the small print, as warranties often use very specific terminology, and to remember that the price for an extended warranty is usually negotiable. Finally, make sure to check for clauses such as consequential loss and betterment. Being aware of these terms and conditions can help you make sure your car warranty is being used properly and that your claims will not be declined.

Step 4: Find out what is required to get service under the warranty

To get service under your car warranty, you will need to first understand the terms and conditions of your warranty coverage. Carefully read the documentation that comes with your warranty, paying special attention to the parts, time periods, mileage, and other conditions that apply to the coverage you have. If you need additional coverage, you may want to shop around for an extended warranty from a manufacturer, dealership, or independent provider.

When assessing a potential service contract, make sure you understand the upfront costs, deductibles, and the covered and uncovered repairs and services, including whether or not the coverage overlaps with your factory warranty. Additionally, check the warranty coverage period or mileage and make sure you know if the contract is required by the provider.

To determine whether or not your car is still under warranty, you will need to know its mileage and date of purchase. Your car’s owner’s manual will have details on the warranty coverage from when the car was initially sold, and you can check the odometer to learn the car’s mileage. If you don’t know the original purchase date, write down the VIN (vehicle identification number) and call any dealership selling that car brand. They will be able to look up the purchase date for you. If you are not the car’s first owner, you should also ask whether the warranty was transferred to you when you bought the car.

If you need to make a claim on your warranty, you should stop driving your car immediately and call your warranty provider. Review the details of the warranty, such as the maximum amount of money you can claim and the servicing schedule. Also, make sure to read the small print and check for any excess, standard cooling-off period, mileage limits, and labour cost limits. Finally, find out which garages are on the list used for servicing and repair, and what their locations and costs are.

Step 5: Understand how much time is covered by the warranty

The duration of the warranty will depend on the type of coverage you choose. New cars generally come with a manufacturers’ warranty that typically lasts between three to seven years, though some cars have a five-year or even seven-year warranty. Extended warranties are also available for purchase so you can continue to have coverage after the manufacturer’s warranty expires. When purchasing an extended warranty, remember that the price is negotiable. Try to get a better deal than what is originally offered before signing on the dotted line. Pay special attention to parts, time periods, mileage, and other terms that apply to the coverage in your warranty, as well as any limits or excesses. Read the documentation accompanying your warranty carefully and make sure to refer to it whenever you require maintenance or repairs, as some issues might already be covered.

Step 6: Check out customer reviews for the provider

  1. Research the company’s website to find customer reviews and ratings.
  2. Search for the company on independent review websites like the Better Business Bureau, Yelp, or Trustpilot to view customer feedback.
  3. Look for customer comments on social media platforms like Facebook, Twitter, and Instagram.
  4. Ask friends and family who have purchased a car warranty from the provider for feedback.
  5. Ask your auto mechanic or dealer for recommendations of reliable car warranty providers.

Step 7: Consider what budget you have for insurance coverage

The budget you have for insurance coverage can significantly affect the value of your car warranty. If you don’t have enough coverage, you won’t be able to get the most out of the warranty, as many of the covered repairs and replacements may be too expensive to pay out of pocket. Additionally, if you have too much coverage, you may end up paying more for your car insurance than necessary, which could result in fewer funds available for other expenses. To maximize the value of your car warranty, you should consider the amount of coverage you need and shop around for the best rate.

Step 8: Get a quote for potential costs associated with each step

To get a quote for potential costs associated with each step of purchasing an extended car warranty, you can follow these steps:

  1. Compare different car warranty companies to compare coverage and prices.
  2. Ask your car dealership for details about the warranty they offer, and negotiate the price if possible.
  3. Visit coverage.com and provide the necessary details such as the age of the vehicle, zip code, number of vehicles insured, and whether you are currently insured or not.
  4. Compare quotes from trusted providers like Drivers switch & save and Allstate to determine which one best fits your needs and budget.
  5. Read the insurance disclosure to make sure you understand the terms and conditions of the policy.
  6. Once you have selected a policy, make sure to read the paperwork carefully before signing on the dotted line.

Step 9: Choose the best car warranty providers for you

Choosing the best car warranty provider for you can be a daunting task. To make the process easier, we recommend following these steps:

  1. Gather information on your make, model, and mileage of your vehicle. Knowing these details will help you get an accurate quote and find the best plan for your situation.
  2. Request quotes from multiple providers. Make sure to use the same make and model to compare prices and coverage options.
  3. Read sample contracts, if available, to understand the coverage and any limitations or exclusions.
  4. Research the company’s claims process and ask if they handle claims in-house or externally. Companies that process claims in-house tend to have better control over the quality of their claims handling.
  5. Look for companies that offer customers the option to choose a certified repair shop on their own without network restrictions.
  6. Look for companies that charge fair prices and allow customers to choose a deductible that meets their budgets.
  7. Consider a company’s reputation and customer feedback. Look for certifications that could serve as indicators of the company’s customer service standards.
  8. Check whether the companies on your list have financial backing from larger insurers. Such backing guarantees the enforcement of a service agreement for its entire duration.

Following these steps can help you find the best car warranty provider for you.