Understanding Your New Car Warranty

A new car warranty, or original manufacturer's warranty, is a legal contract between the purchaser of a vehicle and the manufacturer.  The warranty will normally guarantee the reliability and function of specific parts over a predetermined period of time, or in some cases mileage.  The warranty will also cover service charges to replace or repair parts in the event that you should have problems with the vehicle.  Find out which extended auto warranty company we recommend.

Original manufacturer's warranties vary in the extent of their coverage, and in the amount of time or mileage in which the vehicle is guaranteed.  They serve as a protection to the consumer that the purchased vehicle is not defective, as shipped from the manufacturer.

But although there are similarities between the two, it is important to understand that a new car warranty is not exactly an insurance policy.  It is true that both warranties and insurance policies protect the car buyer financially from structural defects in the car, but they are not the same legally.  A warranty comprises a contract between buyer and manufacturer, while an insurance policy is a contract with a third-party insurer, which is unrelated to the original vehicle manufacturer.

To further confuse matters, several insurance companies have begun offering a type of warranty/insurance policy known as "mechanical breakdown insurance." This usually covers the same parts that are included in the original manufacturer's warranty, but often for an extended period of time.

For example, many new-car warranties are valid for three years or 36,000 miles.  "Mechanical breakdown insurance" might cover the exact same items as the original warranty, but extend the coverage for an additional 3 to 5 years.

There is also a type of new-car warranty known as an "adjustment warranty."  This type is basically a contract between the buyer and their local car dealership, not the original manufacturer.  "Adjustment warranties" normally cover all major parts and systems of the vehicle over a short-term basis, usually between 30 and 90 days from the date of purchase.

Because every state has different laws when it comes to purchasing a new car, "adjustment warranties" can be mandatory in some states for as much as 90 days.  But other states may have no law at all regulating this type of coverage.  A dealer may choose to include an "adjustment warranty" as a premium feature, though the coverage can be in effect for as little as one month.

New-car warranties themselves are long and often confusing documents.  They may contain many different sections, and more legalese than the average consumer is comfortable with.  For this reason, the" bumper to bumper" warranty has become a popular selling point for many new cars.

The bumper to bumper warranty is comprehensive, and covers everything from interior trim and minor cosmetic details, to major engine overhauls or new tires.  These warranties also contain several sections, and arguably the most important of these is the separate drivetrain warranty.  This covers the most important and expensive elements of your car, such as the engine, transmission and differential. 

The drivetrain warranty is normally limited by the number of miles on the vehicle, not necessarily the number of months or years you have owned the car.

All of these separate sections combine to create the new-car warranty, and serve as your protection against shoddy workmanship and defective parts.

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