One of the delights of car ownership is the warranty. Actually, I should say “warranties,” as there are several types you’re likely to encounter. All new U. S vehicles come with some or all of these: a basic warranty covering everything except parts subject to wear and tear, such as wiper blades; separate warranties covering the car’s battery and tires; a drivetrain warranty covering most of the major parts such as the engine and transmission, but not parts subject to wear and tear, such as belts; a rust/corrosion warranty covering rust-through problems in your car’s sheet metal; a roadside assistance warrant that will help you if you become stranded because of your car. Some of these warranties extend to used cars but you will probably need to do a little research to see whether and to what extent a used car is covered. First, before buying a car, you should obtain and review the warranties to examine covered and uncovered expenses. These warranties are typically obtained and explained by the dealer and/or from the manufacturer’s web site.
In addition to new-car warranties, there are Extended Warranties, which are sold separately from your car and cost extra. An extended warranty is a service contract designed to cover some or all repair expenses beyond new-car warranties.
First, they are usually presented in 3 tiers with different prices for different levels of coverage: the lowest level, covering powertrain; the second level, covering powertrain plus other components; the highest level, which is comprehensive or “bumper-to-bumper.” Some experts say you should skip the extended warranty because newer cars are so reliable. However, some car buyers may benefit from extended warranties, depending on their situations.
Secondly, know that you can purchase the extended warranty at the time of car purchase or later, as long as it’s a new car. Don’t wait until the original warranty expires, though, because this may limit the coverage and raise the price of an extended warranty. Used car extended warranties may need to be purchased at the time of the car purchase, so research the need for that. You may or may not wish to purchase an extended warranty, depending on your answers to several questions, most or all of which can be answered online ahead of time through the dealer and/or manufacturer.
Third, determine what is and what is not covered by the extended warranty. Typically, you will want it to cover: “wear and tear,” covering worn-out parts that will need to be replaced; “breakdown,” covering parts that literally break; “overheating,” which can occur due to problems with expensive parts; ABS brakes, if your vehicle has them.
Fourth, are the expenses covered by the extended warranty already covered by your original warranty?
Fifth, do you intend to own the vehicle beyond the date/mileage when the original warranty expires?
Sixth, what is the repair/maintenance “track record” of the make/model/year of the car you’re buying?
Seventh, ask who is behind the extended warranty: is it the manufacturer (who will traditionally have a better record of service) or is it an “aftermarket” or “third party” company, (which have provided many car repair horror stories of surprisingly limited repairs, no repairs at all and/or bankruptcy)? Don’t just settle for the dealer, either. You want the manufacturer – the automaker – to stand behind this warranty. A manufacturer-backed warranty means that: your car will be repaired by properly trained technicians; manufacturer-authorized parts will be used; you won’t need to wait for authorizations to repair; you won’t need to pay money up front for repairs; the extended warranty is transferrable when you sell the vehicle.
Eighth, what is the actual cost of the extended warranty? If you buy it when purchasing the car, dealers will typically roll the price into financing and merely show the monthly payment; you want to know the full cost in addition to that “monthly payment” information.
Ninth, how much is the deductible you’ll have to pay if/when using the extended warranty?
Tenth, is the deductible “per visit” or “per repair?” If it’s per visit, you can have several items fixed and pay a single deductible. If it’s per repair, you may have to pay the deductible several times over to get the same number of items fixed at once.
Eleventh, are you required to pay the repair bill, and then be reimbursed? You will want a plan whereby the dealer is paid directly by the company.
Twelfth, is the warranty transferable if/when you sell the car? Obviously, you want one that is transferable, so you can offer that as an extra incentive to a potential buyer.
Thirteenth, where must the repairs be performed? You will want a warranty that gives you at least two options of repair shops.
Fourteenth, what is your own “track record” on car repairs? What have you typically had to repair on your cars? That will give you some idea of what lays ahead with this car.
Fifteenth, shop around for a good price. Prices of extended warranties are typically negotiable, so contact the manufacturer (which might sell extended warranties online), contact several dealerships, and find the best price.
Aside from extended warranties, there is potential help through “After Warranty Assistance.” This is a dealer’s discretionary auto warranty work performed after the car’s original warranty expires. It is not available if you have purchased an extended warranty and if too much time has passed after your original warranty expires. It is usually provided by dealers for a limited number of responsible owners who perform regular maintenance on their cars and who are loyal to the dealer.
Sixteenth, if you have not purchased an extended warranty and believe the dealer may provide “After Warranty Assistance,” ask for it. You may receive this assistance for some or all repairs/warranty work.
Predictably, manufacturer’s original warranties and extended warranties are not cure-alls. A warranty can be voided by your own acts/omissions. The warranty can be partially voided as to certain repairs or parts or entirely voided as to all repairs/service to your car.
Seventeenth, avoid partially voiding your car’s warranty by: neglect, such as failing to follow your car’s maintenance schedule; use of dirty or improper fluids in your car; aftermarket parts or modification that could cause a need for repairs.
Eighteenth, avoid totally voiding your warranty by: salvage title or total loss of your car in an accident; misuse of the car by using it for anything outside of normal operation, for example by racing, off-roading or overloading the vehicle; environmental damage by disasters like floods or earthquakes; replacing, altering or disconnecting your car’s odometer.
Nineteenth, to show your compliance with the warranty requirements: follow the manufacturer’s recommended maintenance schedule; keep a log of regular maintenance; keep receipts and service records.
DO’S AND DON’TS
DON’T be intimidated by the process or the people.
DO obtain and review original warranty and extended warranty information from the dealer and/or from the manufacturer’s web site before you buy the car.
DO consider foregoing an extended warranty.
DO know that you can purchase the extended warranty at the time of car purchase or later, as long as it’s a new car.
DON’T wait until the original warranty expires before purchasing an extended warranty, because this may limit the coverage and raise the price of an extended warranty.
DO know that a used car’s extended warranty may need to be purchased when the car is purchased.
DO determine what is and what is not covered by the extended warranty.
DO determine whether the expenses covered by the extended warranty are already covered by your original warranty.
DO determine whether you intend to own the vehicle beyond the date/mileage when the original warranty expires.
DO find the repair/maintenance “track record” of the make/model/year of the car you’re buying.
DO purchase only manufacturer-backed extended warranties.
DO ask for the total cost of the extended warranty.
DO research the deductible you’ll have to pay if/when using the extended warranty.
DO determine whether the deductible is “per visit” or “per repair.”
DO ask whether you must pay money up front for repairs under extended warranty.
DO determine whether the extended warranty is transferrable if/when you sell the car.
DO insist on at least two options of repair shops.
DO examine your own “track record” on car repairs.
DO shop around for a good price for extended warranties.
DO ask the dealer about “After Warranty Assistance.”
DON’T partially void your car’s warranty by neglect, use of improper/dirty fluids or aftermarket parts/modifications.
DON’T totally void your car’s warranty by: salvage title/totaling your car; misusing your car for anything other than normal operation; environmental damage; or replacing, altering or disconnecting your car’s odometer.
DO show your compliance with the warranty requirements by: following recommended maintenance schedules; keeping logs of regular maintenance; keeping receipts and service records.
[Note from HandelontheLaw.com: This article is to be used as an educational guide only and should not be interpreted as a legal consultation. Readers of this article are advised to seek an attorney if a legal consultation is needed. Laws may vary by state and are subject to change, thus the accuracy of this information cannot be guaranteed. Readers act on this information solely at their own risk. Neither HandelontheLaw.com, or any of its affiliates, shall have any liability stemming from this article.]
Note from HandelontheLaw.com: This article is to be used as an educational guide only and should not be interpreted as a legal consultation. Readers of this article are advised to seek an attorney if a legal consultation is needed. Laws may vary by state and are subject to change, thus the accuracy of this information can not be guaranteed. Readers act on this information solely at their own risk. Neither the author, handelonthelaw.com, or any of its affiliates shall have any liability stemming from this article.