An auto warranty offers protection in the event that your vehicle is in need of an expensive repair. It’s a bit like insurance for your vehicle. There are different types of vehicle warranties available. Understanding your auto warranty and the options available to you can be confusing. This guide will walk you through the different types of warranties and how they can affect your vehicle and your wallet.

New Auto Warranty

A new car comes with a manufacturer warranty, which usually covers the entire vehicle for a certain amount of time. This is referred to as a bumper-to-bumper auto warranty. In addition to this comprehensive automobile warranty, a drive train warranty is also offered on new vehicles. This covers the transmission for a certain period of time. Here is a detailed description of new car coverage:

• Bumper-to-Bumper Auto Warranty- All manufacturers offer at least a 36-month bumper-to-bumper warranty on their new cars. The coverage period will vary depending on the manufacturer. Most brands offer a 36-month auto warranty; some extend the warranty period up to 60 months. This auto warranty covers all factory-installed parts on the vehicle. Coverage is for defects and workmanship. This car warranty does not cover damage caused by an accident or modifications done by you or a third party. All auto warranties have exclusions. Normal exclusions would be tires, wiper blades and batteries.
• Drive Train Auto Warranty – In addition to the bumper-to-bumper auto warranty on new vehicles there is also a drive train warranty. This covers the major components of the vehicle. Items covered are the engine, drive shaft and transmission. The majority of manufacturers offer a much longer power train warranty than the basic bumper to bumper. A power train auto warranty typically lasts at least 5 years and can be valid up to 10 year or 100,000 miles. Read your new car warranty to determine the length of your power train coverage.
• Emissions Warranty – There are federal emission requirements that must be met. New car manufacturers offer an Emission Defect Warranty and an Emissions Performance Warranty. This type of auto warranty covers the vehicles emission system against defects. A typical emission warranty is for 3 years or 50,000 miles.
• Corrosion Warranty – This auto warranty covers damage that is caused by rust on the vehicles sheet metal. A corrosion auto warranty usually offers coverage for 6 years or 100,000 miles. Exclusions would be rust caused by surface scratches, dents or nicks.

Extended Vehicle Warranties

At some point, a new automobile warranty will end and you will be without coverage should an expensive repair crop up. If you have recently purchased a used car that is over 3 three years old, in most cases you will not have warranty coverage. An after market warranty can fill in these gaps. Here is a basic rundown of an extended car warranty.

Extended Auto Warranty Explained

Extended warranties are basically an insurance policy for your vehicle. You can purchase an extended auto warranty from the dealership, or an extended warranty company. An extended auto warranty covers repairs and in some cases regular maintenance for an agreed upon period of time. These service contracts vary dramatically in price and coverage.

Benefits of An Extended Auto Warranty

There are many benefits to an extended warranty and you should consider one, especially if you are purchasing a used car. A huge repair bill can easily throw your budget into disarray. Cars are becoming more complicated and repair costs continue to rise. While an extended auto warranty requires a substantial up front payment, the peace of mind that it offers over its lifetime can be well worth the expense.

Disadvantages of A Used Car Warranty

Cost is the main disadvantage. Most extended auto warranties cost between $500 and $2000 depending on the vehicle and the coverage purchased. There are high quality extended warranties and low quality ones, you need to understand what you are buying. It’s important to read the entire extended warranty before signing anything.

Caveat To Buying An Auto Warranty

Things to Consider – Never buy extended warranty coverage unless you have read the entire document and understand all of the terms of the contract. Here are some things to look out for:

• Exclusions – Cheaper warranties will have a long list of exclusions. You do not want an extended auto warranty that doesn’t cover most problems.
• Restricted Service – You should be able to get your vehicle repaired at the shop of your choice. If your auto warranty restricts your service to a few shops, look for a different warranty.
• Payment – The warranty company should pay the repair shop directly. If you have to pay and wait for reimbursement, look for different coverage.
• Transferable – The auto warranty should be transferable. This is an excellent selling point if you hope to sell your vehicle.

Do I Need An Extended Auto Warranty?

Almost any time you interact with a car dealer they are going to try to sell you an extended auto warranty. You may find yourself wondering if an extended auto warranty is worth the cost. Here are a few things to consider:

• Used Cars – If you purchase a used car that has more than 36,000 miles on it, an extended auto warranty is often worth the cost. Many factory warranties expire at 36,000 miles so you will be on the hook for any expensive repairs, an auto warranty will cover any large repair bills.
• New Cars – When it comes to new cars an extended warranty is often unnecessary. It really depends on how long you plan on keeping the vehicle. If you hope to drive the vehicle into the ground over a period of 20 years then you should consider an extended warranty. You can purchase an extended auto warranty at almost any point in a vehicles life but the older it is the more expensive the coverage will cost. Buying it now will offer the most coverage at the lowest price.
• Leasing – The majority of leases are for 3 years, 36,000 miles which means your original factory warranty will cover you the entire time you drive the vehicle. An extended auto warranty makes no sense in this case.

Hopefully you now have a better understanding of the most common type of auto warranties. A good auto warranty can give you peace of mind and can be a lifesaver if a huge repair bill comes your way.

While every new car comes with an auto warranty, the same cannot be said for used vehicles. If you are in the market for a used car, especially one that has over 36,000 miles on it, an extended auto warranty makes good financial sense. There are different types of extended auto warranties and the coverage levels vary dramatically so it is important to have a solid understanding of what to look for when comparing warranties. This article should help you understand what to look for when shopping for an extended auto warranty.

Types of Automobile Extended Warranties

Extended vehicle warranties are sold under a variety of names. While an extended auto warranty is the most common name, they are also referred to as service contracts or mechanical breakdown insurance. Certified used vehicles are usually offered with a limited auto warranty as well. The following is a brief explanation of each type:

• Extended Auto Warranty – These are the most common type of extended auto warranty. They are sold at dealerships and by third party vendors online. There are different grades of vehicle warranties and its important you understand all the exclusions and conditions of an extended auto warranty. We will discuss what to look for and what to avoid in an extended auto warranty later.
• Service Contract – A service contract is basically the same thing as an extended auto warranty. It offers coverage against certain repair bills and in some cases routine maintenance for a set fee. Service contracts are mainly sold by third party vendors online.
• Mechanical Breakdown Insurance – These contracts are an insurance product and can only be sold by licensed insurance agents. They cover the cost of repairs due to mechanical breakdown. These policies do not cover damage due to an accident or vandalism. They also do not cover repairs due to wear and tear; this can be a significant difference. A monthly premium is charged which can be easier to pay than the upfront fee that is associated with an extended auto warranty.
• Certified Used Cars – Many manufacturers offer certified used vehicles. This means that they have inspected and reconditioned the vehicle to meet their standards. These vehicles are usually offered with a limited bumper-to-bumper auto warranty and an extended powertrain warranty. Check with the dealer for details.

What To Look For In An Auto Warranty

An extended auto warranty is a legal contract so it’s important that you know what to look for when considering a car warranty. Here are a few of the most important things to look for:

• Exclusions – This is the most important thing to look at when appraising an auto warranty. An extended auto warranty should cover almost all parts of your vehicle. If major components are excluded, the coverage is not worth the price you will pay. There are some things, such as windshield wipers, tires and batteries that will not be covered. Brake drums and rotors are often excluded as well.
• Service Centers – There are some warranties that only allow you to get your vehicle serviced at certain service centers. Avoid this type of auto warranty. You don’t want to be out of state on a trip and find out that you have to get your car back to your hometown to be covered for repair bills.
• Deductibles – Many auto warranty contracts will have deductibles attached to them. Ideally you should look for an auto warranty that doesn’t have a deductible but if it does, you want a per-visit, not a per-repair deductible. A per-repair means that each repair done in a visit is subject to a deductible.
• Expiration – An extended auto warranty can be good for a set amount of time or up to a mileage limit. Be sure that you understand when the extended warranty expires.
• Transferable – An extended auto warranty should stay with the vehicle, not the owner. Make sure the auto warranty can be transferred if you decide to sell the car before the used car warranty expires.
• Rental Reimbursement – Look for an auto warranty that covers rental car fees if your vehicle is going to be out of action for a bit.

Typical Costs

Depending on the year and mileage of the vehicle, an extended auto warranty will cost between $500 and $2000 with the average running right around $1000. The older the vehicle and the higher the mileage, the more expensive the auto warranty will be. At a certain point, a vehicle will no longer be eligible for a vehicle warranty. Once you get above 150,000 miles, insuring the vehicle will become cost prohibitive.

Best Place To Buy An Auto Warranty

You can purchase an extended auto warranty from a number of different outlets. The most important thing to remember is to read through the entire automobile warranty before signing anything. Ask questions if you don’t understand something. Here is a rundown of the most common places to buy an extended car warranty.

• New Car Dealership – If you are shopping for a used vehicle at a new car dealership in most cases they will be offering a high quality aftermarket warranty. All car manufacturers are in the extended auto warranty business and their offerings are some of the best. High quality warranties do not come