Jennifer Cook is a writer for USA TODAY Homefront and has spent hours perusing sample warranty contracts from vehicle manufacturers and warranty providers. She began her career in automotive content researching insurance and vehicle shipping companies. Jennifer is based in the sleepy town of Cedar Mountain, North Carolina and spends much of her time exploring the Blue Ridge Mountains. She hopes to become an accomplished scuba diver in the coming years but knows that fear of sharks is a healthy thing.
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A car warranty is an agreement from a vehicle manufacturer or warranty company to cover specific parts, repairs and other services. New car warranties come with your vehicle, but you can purchase different coverage before or after the original warranty expires.
A powertrain warranty covers parts and repairs for the engine and drivetrain. This includes a small number of components known for needing expensive repairs, such as the cylinder block, transmission and drive axles. Bumper-to-bumper warranties, which a new car limited warranty falls under, build on powertrain coverage and include protection for systems like the suspension, air conditioning and steering. These policies will cover almost every repair need, with some exceptions.
Warranty plans that fall between these two coverage extremes exist. Most are tiered levels of stated-component protection.
Extended car warranties are often referred to as vehicle service contracts. These coverage agreements have set durations and mileage limits and typically list included or excluded coverages directly in the contract. The best extended car warranties have high mileage limits, many coverage options and transparent sample contracts.
The most common types of car warranties are powertrain and bumper-to-bumper coverage. Powertrain warranties provide minimal stated-component coverage, meaning they only cover the parts and repairs listed in the contract.
In contrast, bumper-to-bumper warranties cover most parts and repairs outside a small list of exclusions. These plans are exclusionary, covering everything except the parts and repairs listed in the contract.
Types of plans often go by different names. Warranty coverage begins with a vehicle’s limited factory warranty and can be extended through manufacturers and third-party companies. Common names for car warranties include these:
Most new vehicles have additional coverage plans, including a corrosion warranty and emissions system protection. Also, many warranty companies offer warranty plans tailored for electric vehicles and ATVs.
Car warranties aren’t designed to operate like maintenance plans or car insurance policies. For this reason, these plans won’t cover normal wear and tear or services such as oil changes, tire rotations, wiper blade replacements, alignments, brake pads or filter changes.
Car warranties won’t cover damages caused by accidents or severe weather. Car warranty coverage is also void for parts damaged by vehicle misuse, vandalism or lack of maintenance. Coverage may also be denied for previously covered parts that become damaged by non-covered or aftermarket parts.
Most car warranty plans won’t cover emissions components such as catalytic converters and emissions control units. These items are typically covered by mandated emissions warranties that come standard with many new vehicles.
It’s standard in the industry for new car warranties and extended car warranties to include perks in coverage. Some of the standard perks are these:
Although rare, some third-party warranty companies, such as Endurance and Omega Auto Care, include maintenance benefits with coverage. Sometimes these are an add-on that can be purchased, and sometimes they’re included for the first year of coverage.
On the surface, both car manufacturer and third-party warranties work similarly. You get the warranty, make a claim with your provider and receive coverage. However, some key differences in how these two types of warranties work can help you decide which is right for you.
Factory warranty coverage requires you to take your vehicle to the nearest car dealership for covered repairs. However, this coverage guarantees the use of genuine original equipment manufacturer (OEM) parts during repairs.
If you want to extend your coverage with the manufacturer, you typically have to purchase an extended warranty plan when you buy the vehicle or during your original factory warranty period. Should your original coverage expire, your vehicle may be ineligible for manufacturer-backed extended coverage.
Original warranties may transfer to new owners if you sell your vehicle but could transfer with limited coverage. In many cases, only powertrain coverage passes to a new owner. Extended factory warranty coverage may transfer with a fee.
Third-party warranties allow you to choose between hundreds of ASE-certified repair shops across the U.S. However, these policies allow for use of generic replacement parts, which may not be as reliable as their OEM counterparts.
Many third-party car warranties can likely be purchased or extended during your vehicle’s lifetime. Several reputable car warranty companies provide coverage options with high model year and mileage limits.
Third-party warranty coverage is often transferable for a fee and can add resale value to a vehicle.
How long your car warranty will last depends on various factors, most notably the type of plan you have. New vehicle limited warranties typically carry terms of 3 years/36,000 miles to 5 years/60,000 miles. However, new vehicle powertrain coverage can last much longer.
Generally, exclusionary or bumper-to-bumper warranties won’t last as long as powertrain or stated-component coverage. This is because your vehicle will likely need more costly repairs as it ages. Still, car owners can still find comprehensive coverage for well-maintained high-mileage or older vehicles.
Like your coverages and plan terms, how much your car warranty will cost depends on its level of coverage and several other factors. The cost of your plan may also include a down payment and a deductible. Down payments are typically equivalent to your first month’s payment, and deductibles range from $50–$200.
Factory warranties are typically included in the purchase price of a new vehicle. This means you won’t pay any additional fees for your coverage. However, your specific manufacturer’s warranty plan may require a deductible for some coverages.
A manufacturer’s extended warranty typically costs more than coverage from a third-party warranty. It’s typically an upfront or yearly cost with a deductible for covered repairs. Dealerships usually try to roll extended warranty costs into your auto loan if you purchase it at the same time as your vehicle.
You can expect to pay an average of $848 annually for extended warranty coverage from a reputable third-party provider, based on the quotes our team got from the top warranty providers. However, warranty payment options vary depending on provider and plan.
Most third-party extended warranties have payment terms shorter than their coverage terms. For example, you might have a warranty with coverage terms of five years and only make monthly payments on the plan for three years. For this reason, your initial yearly payment averages may be higher than $848. Some providers also give the option of paying for the plan in full or yearly, and they sometimes give discounts if you choose to pay up front like this.
Additionally, some extended warranty contracts are served on a month-to-month basis. While these month-to-month contracts are convenient for shorter-term coverage, you’ll pay more overall for this type of coverage since you’re paying each month for the life of the warranty.
Yes, a car warranty can be worth it. Whether you have a new or used vehicle, a car warranty can protect your budget, reduce stress and keep your car on the road longer. However, whether investing in additional car warranty coverage makes sense for you will depend on your budget, coverage needs and ownership plans for your vehicle.
If your vehicle is relatively new and still covered by its original factory warranty coverage, you may not need to invest in an additional car warranty. But a car with high mileage or in poor condition could use help from an extended auto warranty.
Alternatively, these plans make sense for those looking to maintain proper care of most vehicles of road-worthy age. Frequently used systems such as heating and air conditioning, steering and suspension can be costly to repair, and a small deductible and monthly payment could result in significant savings. Additionally, if you plan to sell your vehicle, an extended car warranty can boost its resale value and establish trust with the buyer.
Original and extended factory coverage may transfer with some limitations. Third-party warranties typically transfer to new vehicle owners with a small fee, usually between $50 and $100.
Yes, you can cancel a car warranty. Reputable third-party warranty providers often offer customers a 30-day money-back guarantee. After this period of time, you’ll typically receive a prorated or partial refund for your car warranty.
Choose the right coverage for your vehicle with these steps:
Most car warranties provide solid protection in the event of unexpected repairs. What a car warranty covers depends on what type of warranty you have and your provider. Some car warranties come standard with new vehicles, and you can purchase additional warranty coverage from vehicle manufacturers or third-party warranty companies with some limitations.
Endurance offers coverage for up to 8 years or 200,000 miles, but it only offers long-term plans.
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