What Is a Car Warranty?
A car warranty is a service agreement where the manufacturer or service provider guarantees coverage for mechanical defects in a car. For a guide on best used car warranties, check out Auto.com’s.
What Is a Car Warranty and How Does It Work?
When purchasing a new car, manufacturers will include a limited car warranty that covers repair or replacement of parts and components due to factory defects. The manufacturer warranty cost is included in the price of the vehicle. Although they might seem similar, you shouldn't confuse car warranties with auto insurance.
Under a car warranty, automobiles that suffer breakdowns due to mechanical failures not related to driver neglect can be repaired at the dealer or dealer-authorized repair shops without cost to the car owner. Warranties remain active until the car reaches a certain age or amount of miles. Therefore, a new car might be covered by its factory powertrain warranty for five years after the original purchase of the vehicle or until it reaches 60,000 miles, whichever comes first.
Once this factory warranty has expired, a car owner can choose to purchase an extended car warranty to provide further coverage. For extended car warranties, customers need to pay monthly or yearly premiums and cover deductibles if and when a repair is made, as stipulated in their vehicle service contract.
Most extended car warranties work by providing reimbursement for repair bills covered under the protection plan. Car owners submit these expenses and the car warranty provider then pays back what's covered minus the deductible.
In addition to the cost of repairs, both a new car warranty or an extended warranty can provide other benefits such as roadside assistance coverage for towing or jumpstarting batteries. Some extended auto warranties might also include coverage for rental cars.
Types of car warranties
New cars are covered by more than one type of auto warranty, each one with its own specific function. Let’s go through some of the most common car warranties.
Also known as comprehensive coverage, bumper-to-bumper covers all major car components. Generally speaking, comprehensive warranties do not cover normal wear and tear or maintenance services, but do cover any defects or malfunctions. Typical bumper-to-bumper coverage lasts three years or 36,000 miles.
The powertrain warranty covers the vehicle’s parts that generate power and actually cause it to move, such as the engine, transmission, axles, driveshafts, transfer case, seals, gaskets, and most any other lubricated parts that belong to those systems.
The powertrain warranty lasts longer than the bumper-to-bumper, typically lasting for five years or 60,000 miles, though some car manufacturers take it up to ten years or 100,000 miles.
Rust and corrosion warranty
This type of protection provides coverage for natural corrosion or rust damage to your vehicle’s paint and sheet metal. Depending on the manufacturer, some rust warranties will only cover metal panels that have been rusted through or perforated, but not minor corrosion. These warranties generally last for five years and don’t carry a mileage limit.
Federal emissions warranty
All car manufacturers are required by law to offer an emissions warranty. This coverage is usually divided into two types: the Performance warranty and the Design and Defect warranty.
The performance warranty provides coverage for repairing specific components, such as catalytic converters, for vehicles that fail to pass emissions tests. The design and defect warranty covers the repair or replacement of emission system parts and components that are not working properly.
Coverage limits can also vary by state. California, for example, has an additional seven year or 70,000 miles warranty that covers more parts than the federally mandated one.
Aside from parts and components, car warranties can cover accessories such as spoilers, stem caps, splash guards, or transport racks, to name a few. If a new vehicle has accessories installed before being delivered to its new owner, car manufacturers will typically include these in the initial limited bumper-to-bumper warranty. Parts and accessories added after delivery of the new vehicle are generally covered for 12 months or 12,000 miles. Car owners should be aware that custom or aftermarket accessories are not included in this coverage.
Since a factory warranty has a specified end date or mileage limit, car owners who continue to use their car past that point might want to extend the warranty further. These extended warranties are vehicle service contracts sold by the manufacturer or third party and provide different levels of coverage.
Unlike the original factory warranty—that has its cost included in the car’s total price— extended warranties require car owners to pay premiums and deductibles.
What Does a Car Warranty Cover?
As mentioned above, coverage of parts, components, and accessories will depend on the type of car warranty the vehicle currently has. In a general sense, a manufacturer’s warranty, specifically the bumper-to-bumper warranty, is an exclusionary warranty. This means that it covers everything that is not included in its list of exclusions, which tend to be minimal.
Comprehensive car warranties cover most major vehicle systems such as:
This includes everything from rack and pinion to A/C compressors, airbags, seat belts, alternators, power windows, locks, and GPS systems.
Meanwhile, the powertrain warranty covers everything engine-related plus the parts that connect the engine to the wheels including:
Extended car warranty companies — such as Endurance, Carchex, or Autopom! — offer coverage comparable to either bumper-to-bumper or powertrain warranties, but each warranty provider might have different tiered plans and levels of coverage. As opposed to the exclusionary nature of a comprehensive warranty, extended warranty providers could also offer inclusionary warranties which cover only the parts and components listed.
What Doesn’t a Car Warranty Cover?
A car warranty does not cover wear and tear or regular maintenance, such as oil changes. This includes, but is not limited to, such car parts as:
If it’s an exclusionary warranty, it will not cover anything that is listed in the contract. If it’s an inclusionary warranty, it will only cover things that are listed and will not cover parts and components that do not appear in the contract.
Due to the variable nature of each vehicle service contract, it's up to the car owner to read and understand their vehicle’s warranty to get a sense of what is and isn’t covered.
How Much is a Car Warranty?
Factory car warranty costs are included in the price of the vehicle so car owners don’t directly pay for it like they would car insurance. However, extended car warranties do carry a cost, both in premiums and deductibles.
Extended car warranties can vary in coverage options, and pricing depends on a plethora of factors such as car make, model, mileage, and geographic location. For these reasons premiums can range anywhere from several hundred to several thousand dollars a year.
Although extended warranty companies don’t have resources comparable to a car insurance comparison tool, car owners can visit several company websites and request free quotes to be able to compare coverages and prices across the industry.
How Long Does a Car Warranty Last?
The duration of a factory warranty depends on the manufacturer that offers it and the type of warranty. Most major car manufacturers offer bumper-to-bumper coverage for three years or 36,000 miles, whichever comes first. Powertrain coverage is typically five years or 60,000 miles. But this is not a hard and fast rule. There are many car companies, such as Hyundai and Kia, that offer longer coverage options.
Car owners who purchase an extended car warranty can choose from different terms offered by the service provider and can range from one to five years. However, most extended car warranties have a maximum mileage cap for which they offer services; if a car has over 150,000 miles, for example, the company might deny coverage.
It is important for car owners to be aware of the exact term length of their warranties, especially considering the growing trend of scam car warranty calls. This is a racket where someone poses as a representative of a car warranty company and claims the customer’s current warranty is about to expire. The caller then attempts to sell them on an extended car warranty that doesn't exist. Customers are encouraged to not engage these scammers and report them to their phone carriers.
What Voids a Car Warranty?
Car warranties, both factory and extended, require the car’s owner to provide adequate and routine maintenance to their vehicle. If a part or component breakdown is determined to have been caused by neglect, the provider can void warranty.
Actions such as off-road use, overloading, or racing can be determined to be a misuse of the vehicle and can lead to a warranty void. Alterations or car modifications that lead to damage to other parts or systems, can also result in the contract being voided.
It’s highly encouraged that car owners familiarize themselves with their warranty contract to understand what is not covered and what types of situations can lead to the voiding of the warranty. It’s also important to keep service records and receipts that provide evidence of the regular car maintenance.
Car Warranty Vs. Car Insurance
Although superficially similar, car insurance and car warranties differ in what type of repairs are covered.
Car warranties cover any expenses that might result from mechanical breakdowns due to factory flaws or faulty parts, such as a blown gasket or faulty transmission. Car insurance covers damage sustained by your vehicle due to accidents, theft, vandalism, or natural phenomena. For example, if you crash your car against a fence and your front axle is busted, your car insurance might cover the damage while a car warranty will not.
Car insurance is required by law in most states, and lenders who are financing your vehicle will also require certain coverage minimums to be met (which is why cheap car insurance might not always be a great idea). On the other hand, your car is not required by law to have a car warranty in force.
Car Warranty FAQ
What is a car warranty?
A car warranty is a vehicle service contract that provides coverage for the repair or replacement of malfunctioning or defective vehicle parts and components. The two main types of car warranties are the manufacturer’s warranty — included when a new car is purchased — and the extended warranty — which can be purchased to supplement a manufacturer’s warranty or to provide coverage once the original warranty has expired.
What does a car warranty cover?
A car warranty covers almost every major car system’s parts and components. Comprehensive warranties provide coverage for major systems such as air conditioning, heating, electrical, steering, and safety. Powertrain warranties cover engine, transmission, axles, and driveshafts. Warranties can also provide protection against rust and corrosion, offer replacement parts to meet emission standards, and cover certain vehicle accessories.
Are car warranties worth it?
Factory car warranties are included in the purchase of your new or certified pre-owned (CPO) vehicles, but extended car warranties have to be purchased separately. Whether or not it is worth it for a car owner depends on each particular situation.
While an extended car warranty can provide coverage for pricey car repairs such as major engine damage, other minor repairs could be cheaper to pay for out-of-pocket. Car owners should do a cost-benefit analysis to know if the amount in premiums and deductibles is worth paying to have peace of mind and protection in case of a major car breakdown.
Choosing an extended car warranty is much like choosing insurance. Car owners might not know how to buy car insurance before they purchase their first vehicle, but they learn along the way. So too with extended car warranties.
When does a car warranty start?
When purchasing a new vehicle, the manufacturer’s warranty starts immediately. Extended car warranties, on the other hand, usually do have a waiting period before coverage kicks in, generally 30 days or 1,000 miles, though that will depend on the type of coverage and the warranty provider.
This warranty period is applied to prevent car owners from filing claims on vehicles that are already suffering from pre-existing conditions or mechanical failures.
How to check if your car has a car warranty
When purchasing a used vehicle, customers should verify if the manufacturer’s warranty still covers the vehicle. Customers shouldn’t pay for an extended car warranty if the original is still valid.
To check if your car still has an active warranty plan, you will need to find the vehicle identification number, or VIN, usually located on a plate or sticker attached to the car. You might also find it in the vehicle registration document, the car’s title, or on some insurance paperwork. With this VIN, you can call up your local car manufacturer’s dealership and check whether the warranty coverage is still valid.
You will also need to check the used car’s odometer to see if the vehicle is still under the mileage limit for the warranty. If it is, you can check what is still covered and then decide if you want to purchase additional coverage in the form of an extended car warranty.
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