Auto Warranty Coverage & Benefits
Auto Warranties Defined
Auto warranties cover repairs or replacement for certain parts of your car for a limited time frame. This can come in the form of:
- Protection directly from your auto manufacturer.
- A service protection plan (often referred to as an “extended warranty") from a reliable third party.
Each type of coverage has its benefits as well as its limitations, whether it's on a new or used car.
Breakdown of Warranty Types
Terms like “warranties," “protections," and “coverage" swirl around the car buying experience so quickly, it can make your head spin. It's important to understand the difference between these terms and how they can affect you and your vehicle.
These terms include:
- New car warranties.
- Service contracts.
- Extended warranties.
- Certified pre-owned warranties.
New Car Warranties
Coverage that comes with a new car includes a range of protections for a limited number of years and/or miles.
- Bumper-to-bumper: Coverage protecting all the “non mechanical" parts of your vehicle (tires, wiper blades, light bulbs, etc.).
- Drivetrain: Covers breakdown of the mechanics that make your car go.
- Rust or corrosion: Protects against deterioration of the exterior of your vehicle.
- Roadside assistance: If your car breaks down on the side of the road while it's under warranty, you'll get picked up and towed to a certified repair shop. Some coverage also includes a loaner vehicle or rental car.
A service contract is essentially a promise to perform or pay for a limited range of services including:
- Replacement parts.
Unlike warranties, these contracts are purchased separately or after the fact from the purchase of the vehicle (i.e. they're not included in the purchase price).
Though service contracts are often called “extended warranties," they are NOT warranties as defined by the law.
In the simplest of terms, an extended warranty is actually a vehicle service contract that extends the protections on your vehicle for additional years or miles.
During your purchase, the dealer will “wrap" the original manufacturer's warranty and extend its protections beyond the original parameters.
If the dealer is offering you an “extended warranty," they're actually offering you a vehicle service contract... the terms are often incorrectly interchanged for one another. Warranties are always included in the purchase price of the vehicle.
Certified Pre-Owned Warranties
Cars that qualify as certified pre-owned fall meet the following criteria:
- The car is still covered by the original manufacturer warranty due to age or mileage.
- It has met strict mechanical and physical checkpoints established by the manufacturer.
- The manufacturer is extending protections for an additional time frame or number of miles.
Benefits of Warranty Coverage
Adding a service contract (or “extended warranty") to the purchase of a used car can protect you from going broke, at least for a number of miles or years. Not only will you add miles to the original manufacturer's warranty, you may also find added benefits including:
- Tire and wheel coverage (which may not be included in your original warranties).
- Rental car reimbursement or travel related costs.
- Trip interruption coverage (hotel, meals, etc.) if you break down out of town.
You may be required to meet a deductible or pay up front for repairs. Be sure to read through the details of fees and reimbursements before you sign.
Protecting Your Warranty Coverage
While you may have heard that some warranties can be void if you have your regular maintenance done outside of the dealership, the Magnuson-Moss Warranty Act makes this type of clause illegal. This act is regulated and enforced by the Federal Trade Commission (FTC).
However, a manufacturer CAN require you to use a specific repair facility if the repairs are provided free of charge under your warranty.
The best ways to ensure your repairs are covered is to:
- Read your warranty thoroughly and understand what is and is not covered.
- Service your vehicle regularly and keep good records.
- Understand your warranty period and when it ends.
- If you are denied coverage, discuss the issue with the manufacturer, and as a last resort, contact the State Attorney General.