Warranties Explained

One of the reasons why people buy new vehicles is that in doing so, the consumer is protected for a certain period of time or during a measure of usage against having to pay for repairs if the vehicle breaks down. This is because new vehicles carry a warranty that is backed by the vehicle manufacturer. Warranty coverage varies depending upon the auto maker, but the industry standard for the past decade or so has been 36 months or 36,000 miles, whichever comes first.

There are three main types of warranties on new cars. The basic warranty, or what is called the "limited bumper to bumper" warranty, the powertrain warranty, and the corrosion warranty. The basic warranty, or bumper to bumper warranty, covers any defects in material and workmanship during the warranty period. It does not cover maintenance, nor does it cover belts, filters, tires, or any other consumable items unless the original was found to be defective. The powertrain warranty, if longer than the basic warranty, covers the engine and transmission. The corrosion warranty guarantees against perforation of body panels due to rust and corrosion, but does not typically include protection against surface rust. In order to keep the warranties in effect, the owner is expected to maintain the vehicle according to the manufacturer's recommended schedule, and should not alter the vehicle outside the manufacturer's original specifications.

If you wish to find out more about a the warranty of a specific, current model vehicle, please refer to the appropriate manufacturer website. If you want to find out what the original warranty coverage was on a vehicle from a previous model year, Edmunds.com is an excellent source of to research prior model year vehicle specifications.

Researching a prior model year vehicle's original warranty coverage is a good idea if you are in the market for a used vehicle. Although the powertrain warranty might not transfer to subsequent owners, the basic warranty does. Therefore, if you are buying a two year old vehicle with 20,000 miles, and if that vehicle had a 36 month or 36,000 mile warranty when new, then the vehicle would still be under warranty for another 16,000 miles or 36 months from the original RDR date, whichever comes first. The time component of the warranty period begins when the new vehicle's Retail Delivery Registration (RDR) is processed when the original owner purchases or leases the vehicle. In order to find out the RDR date, you would have to call a dealership that sells that particular type of vehicle, and have them check the VIN to see how much warranty coverage is left. An easier way is to run a CARFAX®, and look at the date that the vehicle was first sold or titled. This might not coincide exactly with the RDR date, but it will usually be very close.

If you are buying a used vehicle that has no remaining original warranty, some vehicles that are sold as "Certified Used" under a manufacturer certification program, have additional warranty coverage beyond the original warranty. Not all certified used programs offer additional warranty, however, so check the manufacturer website in order to learn about their certified used/pre-owned program.

Many dealers place a 30 day or 1,500 mile limited powertrain warranty on late model used vehicles that were produced in the past 4 model years and have less than 70,000 miles. Beyond that, any other vehicles are sold "AS-IS", with no warranty. The Buyer's Guide on one of the side windows of the vehicle will show whether or not the vehicle is being sold AS-IS. Most vehicles, however, can be covered by some type of extended warranty, even if the original warranty has expired, and even if the dealer is selling the car AS-IS.

Extended warranties, that can be purchased with new or used vehicles, can be tailored to the individual owner's needs. They can be set up for various combinations of time and mileage, and can cover only powertrain components or all systems in the vehicle. I recommend that everyone consider an extended warranty when purchasing a new or used car.

When trying to decide whether or not to buy an extended warranty, I suggest that you honestly look at your budget and ask yourself if you can afford an unplanned expense of $2,000 to $3,000. Cars are machines, therefore they break down. Regardless of how statistically reliable that any vehicle is, it is still a machine and can break down at any time, and when they do, a $2,000 to $3,000 repair bill is common in today's vehicles. If you think that your budget can better accommodate a planned expenditure of $20 to $25 per month rather than a sudden, unplanned expense of $2,000 to $3,000, then you should fully protect yourself during the time that you expect to own the vehicle with an extended warranty.

In addition to extended warranties, dealers offer some other products.