What to Know About a Car Warranty

A car warranty is a contract between an owner and warranty company, which requires the warranty company to pay for repairs covered by the contract for a specific period of time. By purchasing a car warranty, consumers are defending themselves from the high costs of mechanical breakdowns. Although car warranties seem simple and straightforward, the fine print can be complicated especially when it comes to different types of coverage. Therefore, it is important to understand what each warranty consists of and which warranty best suits your needs.

Types of Car Warranties:

1. Factory Warranty-provided by the manufacturer and is required by law to protect against automobile defects. This usually comes with two different types of warranties: basic and powertrain warranties. Basic warranties cover almost all components except for items that are expected to wear down with normal usage. Powertrain warranties cover the engine, transmission, axles and drive axle assembly. Factory warranties are typically purchased with new cars and generally span from three to five years.

2. Extended Warranty- provides benefits such as lock-out assistance, flat tire assistance, fuel and fluid delivery, battery jump, flat tire repair, towing, and most importantly, emergency roadside assistance. These benefits are a crucial necessity for your car.

3. Bumper to Bumper Warranty- covers all the components of the car and lists the few components that are not covered. Typically, this warranty is given to new cars or cars with less than 50,000 miles or under five years of age.

4. Stated Component Coverage- is a good alternative if your vehicle is not eligible for a bumper to bumper warranty because it covers the major components of your vehicle. The amount of components will vary because each contract is unique. However, this coverage is the most costly.

What car warranty am I eligible for?
Different components and features of your car will determine what kind of warranty you are eligible to receive. Features such as mileage, model, vehicle’s age, four-wheel-drive, turbo/super charged, diesel engine, and the number of cylinders will affect your car’s eligibility. Therefore, knowing the features of your car before purchasing a warranty is important because it will affect the coverage and cost of the premiums. Additionally, a vehicles usage is important because if it is used commercially, it can affect the warranty’s cost and coverage.

The cost of vehicle repairs is continuing to rise. Therefore, it is important to ensure your car is covered with some type of car warranty.