What to Know about Car Warranties

Car warranties can save you a lot of money when something goes wrong with your car. The problem is that there are so many different warranties that it’s often difficult to know whether you’re covered or not. Each warranty type, from factory warranties to extended warranties to bumper-to-bumper warranties, gives you a different level of cover and serves a unique purpose.

Do you really need extended warranty? Our experts share tips and recommendations for understanding warranties and the impact they have on buying or selling cars.

Often, the best solution is to read the warranty agreement or the documentation to see what it covers and what the exclusions are. That way, you’ll be able to see the exact type of cover you have for your car.

But here’s the next problem: These documents are often written in legalese that makes it difficult to understand them; thus, even after reading the document, you might not be certain about what is covered.

Luckily, we’re here to help. With this guide, we’ll show you everything you need to know about car warranties.             

What Is a Factory Warranty?

A factory warranty or manufacturer’s warranty is the manufacturer’s guarantee that, if problems occur with your new car within a certain amount of time or number of miles, it will be responsible for doing the repairs free of charge. In simple terms, it is basic coverage offered by the car’s manufacturer to repair certain issues for free.

The length of a factory warranty varies depending on the manufacturer, and it is based on a certain number of years or miles, whichever comes first. Generally, these warranties are also transferable in the event that you sell your car to someone else and the period or mileage limit hasn’t expired.    

What Does a Car Warranty Cover?

Typically, manufacturer warranties cover parts and systems that break down because of flaws or defects in factory-installed parts. As such, it’s offered on any new or certified pre-owned vehicle.

You also get:

• Extended warranties, which extend this protection longer than the specified time period or mileage limit.
• Bumper-to-bumper warranties, which are the most comprehensive coverage that you can get for your vehicle and have only a short list of exclusions. 
• Powertrain warranties, which cover your vehicle’s powertrain.
• Corrosion warranties, which cover the cost of repairing corrosion on your vehicle. 

These different warranty types will be dealt with in more detail below.   

Exceptions and Exclusions

Typically, a car warranty doesn’t cover everything and usually contains several exclusions. 

These exclusions include: 

• Regular maintenance, such as oil changes, tire rotations, and service.
• Wear and tear items, such as brakes, brake pads, clutches, windshield wiper replacements, and headlight bulbs.
• Exterior or body panel damage, such as dings or scratches in the paint.
• Interior damage, such as holes in the seats, tears in the upholstery, and broken plastic.  
• Damage caused by improper car care, such as skipping regular maintenance, reckless driving, or improper paint care.   
• Damage from accidents, such as dents in the bodywork, broken windscreens, or glass components. 
• Damage from the environment, such as tree sap, salt, sand, hail, or wind.
• Alterations or modifications, such as installing parts not specified by the manufacturer or tampering with the odometer. 

Different Types of Warranties

As we said above, there are different types of warranties. Some come standard with your vehicle, and others can be bought as extras.   

Factory or Manufacturer’s Warranties

Manufacturer warranties or factory warranties are offered by manufacturers as a promise or guarantee that the manufacturer backs their product and will fix any defects or problems with the vehicle within a certain time period or number of miles. These warranties are offered on any new or certified pre-owned car and cover any defects with these vehicles. 

Generally, there are different types of manufacturer warranties that cover different things. These include:

• New vehicle limited warranties, which cover most of the car’s systems and parts. Most of these warranties last for up to three years or 36,000 miles, but this depends on the manufacturer.
• Emissions warranty coverage, which provides at least two years or 24,000 miles of emissions control coverage.
• Lifetime limited parts warranties, which cover the repair or replacement of certain parts for the duration of the car’s lifetime.
• Maintenance warranty coverage or service contracts, which are typically offered as add-on coverage and cover your car’s maintenance for a certain time period.   

Bumper-to-Bumper Warranties

Bumper-to-bumper warranties are the most comprehensive type of warranty you can get for your car. They’re also often called exclusionary warranties because only a short list of items or components are not covered. 

These are often offered for both factory and extended warranties, and their standard length is three years or 36,000 miles, depending on the manufacturer.    

Because bumper-to-bumper warranties are so comprehensive, they can cover:

• All major vehicle systems
• Air conditioning and heating
• Electrical components
• Steering
• Safety features
• High-tech systems
• Hybrid vehicle parts       

Powertrain Warranties

As the name suggests, a powertrain warranty covers your car’s powertrain. This coverage includes the:

• Engine 
• Transmission
• Axles 
• Drive shafts 
• Seals 
• Gaskets 
• Transfer case 

Keep in mind that this is only a list of the things that it covers, and depending on your car’s drivetrain, there are other things that it could cover. The coverage period of a powertrain warranty is often longer than a standard warranty and usually covers you for five years or 60,000 miles. Some even last as long as 10 years or 100,000 miles.  

What’s an Extended Warranty?

An extended warranty is a warranty that provides coverage for your car after your manufacturer’s or factory warranty expires. So say, for example, you buy a car with a 36,000-mile or three-year manufacturer’s warranty. When this warranty ends, you’d be able to purchase an extended warranty that will give you further coverage after the expiry.

Some manufacturers offer their own extended warranties, but they have limits on when you can buy it. For example, some manufacturers require that you buy the extended warranty before your manufacturer’s warranty ends. 

There are other third-party providers or car dealerships that offer extended warranties on cars. Here, the point at which you can buy the warranty is a bit more flexible.    

Whether you buy an extended warranty from the manufacturer, a third party, or a dealership, it’s likely that you’ll be able to choose from various plans offering different levels of coverage. Generally, the more expensive the plan, the more car parts and repairs it covers.

Typically, though, extended warranties give you the following coverage:

• All major vehicle systems. If you, for instance, buy a bumper-to-bumper extended warranty, it will cover most parts of your vehicle.
• Powertrain. This includes the engine, the transmission, etc.
• Corrosion. An extended warranty may cover you against damage caused by rust.  
• Roadside assistance. Many extended warranties offer roadside assistance, which can include towing and trip interruption services.
• Normal wear and tear. Unlike factory warranties, which typically only cover defects in materials or workmanship, some extended warranties also cover repairs and replacement from regular use of your car.        

Are Extended Car Warranties Worth the Money?

Extended car warranties often sound good because they promise to cover you after your factory warranty has expired. It is, however, important that you read the fine print and see exactly what the extended warranty covers and what it doesn’t. Apart from this, there are other benefits and drawbacks when buying an extended warranty for your car. 

The biggest benefit of an extended warranty for your car is that it can save you money in the event that something goes wrong. So, for example, if your car’s factory warranty has expired and the car breaks down, an extended warranty could save you from a costly repair instead of you having to pay the entire bill out of pocket. 

This ultimately gives you peace of mind, which means that you don’t have to worry about the costs if something goes wrong with your car.

Unfortunately, there are some drawbacks to extended warranties, too. For instance:

• Many people who buy extended warranties for their cars never use them, and if they do, the cost of the repairs is often lower than the cost of the warranty.
• When you buy an extended warranty before your manufacturer’s warranty expires, you may end up paying for a warranty that you’re already getting for free.
• Extended warranties typically don’t cover everything that a manufacturer’s warranty covers. This could mean that you think you’re covered, but if something happens, it turns out you’re not. This could be a nasty surprise, so it’s important that you read the fine print to figure out what the warranty covers and what it doesn’t.
• An extended warranty can often limit your choice of where to have your car fixed or serviced.
• Some extended warranties may only pay a portion of the cost to repair issues based on the car’s mileage. For example, a warranty may pay 100% of the cost for a car that has a mileage of 40,000 miles, while it may pay only 80% of the cost of repairs for a car that has a mileage of 60,000 miles. 
• You might buy an extended warranty, but the manufacturer, dealership, or independent third party goes out of business. Ultimately, this would mean that you have a warranty you can’t use.

In the end, you should consider what an extended warranty will cost you and weigh that against the possible cost of repairs in the event that something goes wrong with your car. If it then appears to be worth it, it makes sense to buy the warranty; otherwise, it doesn’t.         

The Bottom Line on Car Warranties

A warranty can save you a lot of money if something goes wrong with your car, but it’s important that you read the contract and understand what the warranty covers and what it doesn’t cover. In this way, you can protect yourself against unnecessary expenses, especially if you’re considering buying an extended warranty.

Fortunately, with manufacturer’s or factory warranties, this isn’t much of an issue because you get them as part of your purchase, and you can be reasonably sure that they’ll cover you for any repair costs that occur as a result of defects or poor workmanship.   

If you want to learn more about car warranties or you’re looking at getting a warranty for your car, visit Car Digest.    

Frequently Asked Questions

Figuring out what a warranty covers, what it doesn’t cover, and how long it lasts can get complicated sometimes, so we’ve compiled some frequently asked questions that car buyers usually ask when it comes to their warranties. 

How do I determine whether a factory warranty has expired?

Factory or manufacturer’s warranties are typically valid for a certain time period or number of miles. So, if you want to see whether this type of warranty has expired, look at the car’s service book to see when it was purchased. When you know that date and the mileage, you’ll be able to figure out whether the factory warranty has expired.

If you don’t have the service book available, you can inquire from the manufacturer using the vehicle identification number (VIN).    

Can you get a factory warranty on a used car?

Yes, you can, but it should be a certified pre-owned vehicle. In other words, you can’t buy a factory warranty when you buy a used car, but you can transfer a factory warranty if the vehicle is still within its warranty limits when you buy it.    

Can you transfer a manufacturer’s warranty?

It depends on the manufacturer and the vehicle. Sometimes, only a part of the warranty is transferred to the new owner, or the second owner gets a shortened version of the warranty. With other manufacturers, the factory warranty is transferred fully to the new owner of the car. It is best to check the warranty agreement to see whether it’s transferred and, if it is, what part is transferred.