What Is a Car Warranty?
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Most new cars come with several manufacturer’s warranties that cover the cost of repairs to your vehicle for a limited time. Car owners also have the option to purchase an extended car warranty, which covers the cost of certain repairs after the manufacturer’s warranty expires.
Car warranties can help you avoid paying out of pocket for some expensive repairs. But it can be confusing to know what warranties come with new or used cars, which ones require an additional purchase and what each type covers. Here’s what to know about car warranties and what they cover.
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What is a car warranty?
A car warranty is a contract where the manufacturer or warranty company agrees to cover certain repairs to a vehicle for a specific period of time.
Most new cars come with a manufacturer’s warranty which covers the cost of repairs due to malfunctions on the manufacturer's end. This warranty doesn't cover damage caused by the driver, as car insurance does, or typical wear and tear. But if the battery or air conditioning stops working due to a manufacturing defect, for example, your car warranty would cover the cost to replace or repair it, and you wouldn’t have to pay out of pocket for it.
New car manufacturer warranties typically last 36,000 miles or three years, whichever comes first. Car owners can also choose to purchase an extended car warranty after the manufacturer's warranty ends. (More on this below).
Car warranties typically transfer when a car is sold. This means that when you buy a used car, you'll want to check its mileage and the year it was purchased to see if the original warranty remains and whether it is transferable. You can also typically buy an extended factory warranty for a used car.
Types of car warranties
Coverage between warranty types can vary depending on the manufacturer or provider. Below are the most common types.
Bumper-to-bumper warranty
Like the name implies, a bumper-to-bumper warranty (also known as a comprehensive warranty) covers repairs to parts between a vehicle's front and rear bumper. This usually includes things like the car’s body, the heating and air-conditioning system and the steering. Note that this warranty doesn't cover maintenance like routine oil changes or wear and tear of parts like brake pads, for example. Coverage can vary but the basic contract lasts three years or 36,000 miles — whichever comes first.
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Powertrain warranty
A powertrain warranty covers any repairs related to the parts that move a car — such as to the engine, transmission or suspension. Coverage limits and terms vary, but this warranty typically lasts longer than the bumper-to-bumper warranty. For example, all new Honda cars offer powertrain warranties for five years or 60,000 miles, whichever comes first, while new Hyundais come with a 10-year or 100,000-mile warranty.
Extended car warranty
Extended car warranties cover the cost of repairs after the manufacturer's warranties have expired.
This warranty is sold separately by manufacturers, dealers or independent dealers that aren't connected with a specific carmaker. Costs and coverage terms vary across dealers, car type and more, so be sure to read coverage terms carefully before purchasing one to understand what the inclusions apply.
While an extended warranty might give some car owners peace of mind, they're not necessary to purchase. To determine whether the coverage is right for you, consider a number of factors like the type of car, how reliable it is, how much money you have set aside for major repairs and how long you plan to keep the vehicle.
It’s important to note that service contracts can also be labeled as extended car warranties. A service contract doesn't meet the federal government’s definition of a warranty, which is to protect or correct a product when it fails. Service contracts can cover some maintenance tasks, like oil changes and air filter replacements, or extend the length of coverage for certain warranties. They are sold by dealers, manufacturers and independent contractors.
Additional warranties
Carmakers also offer several other types of warranties, some of which aren't as common. Examples include:
Roadside assistance: This generally covers towing costs and tire changes if the car breaks down during travel.
Corrosion warranty: Also known as rust warranty, this covers replacement and repairs due to rust to sheet metal parts of the car.
Federal emissions warranty: This type of warranty covers repairs needed to correct defects in parts that would prevent the car from meeting Environmental Protection Agency standards.
