Auto Warranty

Understanding auto warranties is hard work for the average person. But because there is a lot at stake, you'll want to review the basics.

Dealers are required by law (Federal Trade Commission) to post a Buyers Guide on each vehicle. This document outlines what type of warranty is offered. Some of the most common types of warranties and service programs include:

"As Is": This designation means that the dealer cannot be held accountable for any necessary repairs after the sale. While some dealers may offer additional verbal warranties, those promises are not legally binding.

Warranties―Limited and Unlimited: Neither limited nor unlimited warranties necessarily cover the entire vehicle and all parts of the vehicle. The only warranty coverage that can be enforced is what is written on the car's Buyers Guide sticker and included in the contracts. An unlimited warranty means that any owner of the vehicle can call upon the coverage of the warranty within a certain time period and that the full price of repair is covered by the warranty. Limited warranties may restrict the percentage of repair paid for, limit the systems eligible for coverage, restrict coverage by time or mileage, and they state, whether the owner is required to pay a deductible.

Extended warranties: Technically, extended warranties don't exist because by definition, warranties are included in the selling price of a vehicle. The confusion comes when a dealer uses that phrase when actually they are selling service contracts. Like warranties, these contracts (car repair insurance) pay for repairs on the covered mechanical systems, but the level of service varies greatly depending on the terms of the contract. Be sure to do careful research on both the company offering the service contract and the terms of coverage before you sign a contract.

Certified Vehicles: A relatively new phenomenon in the car-selling arena is the concept of "certified" vehicles. Dealers offer these cars with the assurance that the car is mechanically sound because the mechanics in the dealer's service department have verified that major systems are in good shape. Cars sold as certified are covered for the expense of repairs much like an original warranty does on a new car. At least one of the reasons why dealers can now offer certified vehicles is that the improvements in technology, materials, and workmanship has extended the longevity of cars in general.

Once you understand what type of warranty or other service program is offered for the car you are interested in, it is time to take the next step.

Find out about auto warranty options for your vehicle using the sites below.