A factory warranty is coverage offered by the original manufacturer for a specified period of time or until a certain mileage threshold is reached. Through a factory warranty, the manufacturer agrees to pay for certain repairs. Factory warranties are generally only included with new car purchases. Across many well down car manufacturers, the specific coverage is similar because they are all competing for the same customers and those customers expect coverage on their new car.
Jennifer Willy, a travel expert at Etia explained the different types of warranties, saying, “the coverage offered can be both inclusionary and exclusionary. If a factory warranty is inclusionary, the contract will explicitly list every part that is included in the coverage and if it is exclusionary, the contract lists the excluded parts instead. The latter coverage typically includes more items, since there are thousands of parts that make up a car.”
Key Takeaways: Factory Car Warranty Questions Answered
If the original factory warranty is still active then it will generally transfer to the next car owner. This means that when buying a used car that still has the manufacturer warranty it will be transferred as if the purchases were the original owner. However, this is not always the case, so be cautious and make sure to read the fine print. In order to be sure, call the dealership of the make of the car and provide the VIN to find out exactly how much warranty is left on the car?
Typically, there are two major types of factory warranties; a basic limited warranty and a powertrain warranty. Oscar Verduga who works at a German car manufacturing dealership added that, “the warranty is activated when the vehicle is purchased brand new and changed to the owner’s name. There are typically different levels of warranty that have different lengths of time and mileage and cover different items. Usually the shorter warranty is the most complete. It covers bumper to bumper, except wear and tear items such as brakes and tires."
“Always keep records of the terms of your warranty so that, if you’re unsure down the road of what’s covered and for how long, you can check back. When in doubt, you can also give your manufacturer a call with your vehicle identification number to find out exactly when your was put into service and determine if it’s still covered that way. This trick works for used cars as well.”
— Richard Reina, CARiD
A bumper to bumper warranty is typically the most comprehensive type of factory warranty available. Be aware, however, that a bumper to bumper warranty doesn’t actually cover every part of your car. Parts that are not covered by this warranty are typically parts that will naturally wear over time, such as brake pads, wipers, and light bulbs.
A factory warranty that is bumper to bumper is really more of just something that will cover any of the manufacturer’s parts that are defective. For example, the manufacturer will replace the engine of the car if it stops working because it was defective, not if something the owner of the vehicle did caused it to stop working.
A powertrain warranty covers less items than the bumper to bumper warranty. The powertrain warranty typically covers more of the larger portions of the vehicle that will keep the car running. It typically includes; the engine, the transmission, axle shafts, driver shafts, and more major components of the vehicle. Basically, the powertrain warranty covers anything that provides power to your wheels. Again, the powertrain warranty does not cover parts that are damaged through normal wear and tear of your vehicle, but instead, covers faulty manufacturer parts over until a specified period of time after purchasing your vehicle or a certain number of miles have been put on the car.
If you still want similar coverage for your vehicle you can look into purchasing an extended warranty. There are many reputable third party car warranty companies that offer varying levels of protection, depending on your needs.
These plans typically come at a monthly cost for the consumer. When a covered repair is necessary, the consumer lets the car warranty company know and then it works out the payment between the company and the repair shop.
A factory warranty is typically included in the cost of the car if it is available and usually only covers parts of the car that make the car run and that are specific to the car manufacturer. However, the extended warranty, also referred to as an auto service contract, comes at an additional cost to the consumer and can sometimes cover more or less than what would have been covered on the factory warranty depending on the chosen plan.
Lauren Fix, CEO of the Car Coach says, “A warranty offers peace of mind. When making a five-figure purchase, the thought of paying out for major repairs in the first couple of years is nerve-wracking. Cars typically come with a warranty, although extended warranties may be offered through a third-party company.
Deciding if you want or need an extended car warranty is a personal decision. You need to decide if you would rather pay a monthly sum and have the peace of mind that any costly repairs that occur will be covered or you will have to budget for those repairs on your own. An extended auto warranty also often offers roadside assistance.
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