Understanding Auto Warranties

Understanding auto warranties is not always easy.  These days the standard "boilerplate" new-car warranty can be 50 pages long, containing many different sections, and enough legalese to make you feel like going home for a quick nap. Find out which extended auto warranty company we recommend.

And while it is true that all new-car warranties are not created equal, there are several different warranty features that you will see over and over again. In this article, we will guide you through the most common aspects of new-car warranties, and what all that fine print means.  Let's get started.

The first variable in new-car warranties is the length of coverage.  These days the majority of manufacturers offer three-year, 36,000 mile basic warranties.  The basic warranty will cover most -- but not all -- major car parts, including everything from cosmetic details to advanced electronics systems.  One exception to the basic warranty: by law, all automakers must guarantee their car's emissions systems for five years or 50,000 miles, whichever comes first.

Quick note: at the time of writing this article, the only auto manufacturers selling in the US market that do not offer a three year basic warranty are Hyundai and Kia.  Both of these Korean-made cars feature a five-year, 60,000 mile basic warranty.

All new cars also have a separate powertrain warranty, sometimes called a drivetrain warranty.  These cover large mechanical parts of the car, including the engine, differential and transmission, and they are often valid for a longer length of time.  For example General Motors offers a 10 year powertrain warranty on its vehicles, as does Kia and several other manufacturers.

These days, automotive engineering has improved to the point where large-scale mechanical problems are quite rare in new cars.  It is far more likely to have a problem with the electrical system in a new car, than a basic engine or transmission problem.  For this reason, the powertrain warranty -- while sounding very impressive -- is not nearly as important as it once was.

Considering the design specifications and engineering of new cars these days, the "basic" warranty of the car should be considered more important than powertrain or other separate warranty sections.

New cars are also often sold with a so-called "adjustment warranty."  Unlike the basic warranty, or the drivetrain warranty, an "adjustment warranty" is not made by the cars manufacturer, but rather, by the individual dealer the car was purchased from.  "Adjustment warranties" are generally valid for only a short-term, normally ranging from 30 to 90 days.  This additional "dealership warranty" should cover all major parts and systems of the vehicle, including cosmetic features.

Because every state has different laws regarding purchasing new cars, the "adjustment warranty" may vary greatly from state to state.  For example, in a few states it is required by law, and may be in force for as much as 90 days from the date of purchase.  In other states, however, there is no legal requirement for the dealer to include a so-called "adjustment warranty," so it may not be offered at all.

Finally, many new-cars come with what is called a bumper-to-bumper warranty.  These tend to be quite comprehensive, but bear in mind they will still not cover items such as tires.  They do however cover all body and engine parts, and much of the car's interior.  Bumper-to-bumper auto warranties tend to be easier to understand, and provide a high level of protection to the car buyer.

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