We buy warranties for our phones, laptops, and even our smartwatches. Shouldn’t we prioritize a warranty for our most expensive gadget — our car? A car warranty provides peace of mind and unique protection beyond what car insurance can offer. Although they may seem similar, car warranties can cover mechanical breakdown and labor costs associated with those repairs. Think of a car warranty as an extra life for your vehicle.
A manufacturer’s warranty is issued by a vehicle’s manufacturer and it covers certain parts of your car, but only for a limited time. Other names for a manufacturer's warranty include factory warranty, original warranty, and bumper-to-bumper warranty. Most manufacturers’ warranties have a warranty period of around three years or 36,000 miles. These warranties typically give cars either a basic or a powertrain warranty. The basic warranty covers defects, not normal wear and tear on the vehicle, including the following:
While the basic plan covers these smaller issues, a powertrain warranty covers everything that makes the car move. Powertrain warranties generally last longer than the bumper-to-bumper warranty and can be as long as five years. Powertrain warranties include the following:
An extended car warranty or extended vehicle warranty can be purchased from a third party auto warranty provider. It is a contract stating that if certain parts of a vehicle break down, the warranty provider will pay for the repairs. It is an added warranty beyond the original warranty. Extended auto warranties can be purchased for pre-owned vehicles. Sometimes these are referred to as service contracts, vehicle service contracts, or extended service contracts. These warranties only come into effect once the original warranty expires.
There are several auto coverage options covered with extended vehicle warranties, including travel interruption, roadside service, wear and tear coverage, rental car reimbursement, seal and gasket coverage, and electronic equipment coverage. When purchasing an extended warranty for your vehicle, find a plan that covers all options listed above in addition to everything the factory warranty covers.
Most warranty companies allow car owners to choose their own mechanic and repair shop. You do not always need to visit the dealership for regular maintenance or repairs.
The main difference between car warranty and car insurance is the kind of protection each offers. A warranty typically covers certain types of mechanical breakdowns, including parts and labor costs. It should not matter whether these repairs are due to manufacturing defects or due to issues with certain car parts. Additional mechanical breakdown coverage can by purchased as part of a car insurance policy. Car insurance, on the other hand, helps cover repairs for your car if it's damaged in a collision, theft, fire, or a natural disaster.
Car Warranties are good for for covering unanticipated vehicle part malfunctions and some mechanical breakdowns. When choosing a car warranty plan, consider your financial habits. Could you set aside money to pay for surprise car repairs, or is it worth paying a car warranty provider to have peace of mind? You should also consider how old your car is and the kind of driver you are. These factors can determine whether or not it is actually worth it to purchase extended car warranty and the kind of coverage you need.
You'll also want to choose a reliable, reputable warranty provider. Car owners should also look at the other benefits offered by car warranty companies. Most offer 24-hour roadside assistance, towing, and help with car rentals while your car is being repaired. These benefits can be valuable during car emergencies in addition to the benefit of warranty coverage.
Car owners purchasing warranties should note that their warranty coverage can be voided for failure to keep up with regular vehicle maintainance among other reasons.
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Bumper-to-bumper warranties are the most comprehensive coverage plans for a vehicle, and car dealers usually provide this coverage for three years. It tends to include electronics and other systems that a powertrain warranty doesn’t. Don’t be fooled by the name, though; there are exclusions. Repairs not defect-related and outside the control of the automaker are not covered in bumper-to-bumper warranties. For example, some bumper-to-bumper warranties do not cover tires, while others do not cover seat belts or headlights. Keep in mind that bumper-to-bumper warranties vary quite a bit depending on the dealership and warranty agreement, so look into your paperwork before agreeing to pay for a bumper-to-bumper plan.
Powertrain warranties cover only the parts that make the vehicle go and are least likely to break: the engine, transmission, and driveshaft. These warranties tend to last much longer, from five to ten years or around 60,000 miles.
Mileage is sometimes a little tricky so make sure to understand your policy. Some plans use actual mileage while other plans use additional mileage. Actual mileage is the reading on your odometer. For example, if your coverage is for five years and 100,000 miles but you already have 50,000 miles on the car, your plan will only cover 50,000 more miles. Additional miles moves from the initial odometer reading on. So if your plan covers five years or an additional 100,000 miles and you already have 50,000 miles on the vehicle, your coverage will expire in five years or once you reach 150,000 miles. When purchasing a vehicle warranty, make sure to note the way the mileage warranty is worded.
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