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Know the Terms of Your Car Warranty Before You Sign

Has your car ever broken down, and after taking it into the shop to get it repaired, you find out the cost that you thought would be picked up by your car warranty is actually being dropped right on your shoulders? You wouldn’t be the first driver to experience an issue as such!

To avoid the common misunderstandings that arise from auto claims and coverage plans, there is a simple fix: know your warranty, before you sign up for it. It is not enough to familiarize yourself with the company that is providing the automobile warranty, especially when that company likely offers several levels of coverage. It is necessary to dig deep into the details of your contract, and to make sure that the coverage you are paying for is exactly what you are expecting to receive.

The first issue is that many customers don’t fully understand the difference between their car manufacturer’s warranty plan and the available extended auto warranties that follow afterwards. When you buy a car, the initial coverage you are given is from your manufacturer. On domestic cars, these are generally good for three years and up to 36,000 miles on the vehicle. Vehicles produced in Japan, Germany, and increasingly in the United States are starting to adopt a 4 year, 50,000 mile plan instead. It is important to know how long your warranty will last you so you can always make sure you have coverage on your vehicle.

Bumper-to-Bumper Car Warranties

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The primary purpose of this initial coverage is to cover defective and inherently faulty parts. These manufacturer warranties are typically “bumper-to-bumper”, so they cover almost everything that could go wrong with your car. That means that if your engine breaks down or if you have an oil leak, the manufacturer will repair your car free of charge. This coverage will take care of many of the car’s interior components such as electronics, air conditioning and heating systems, as well as sound systems. There are several car parts that a standard manufacturer’s warranty will not cover, though. A bumper to-bumper warranty, ironically, does not usually cover issues with the bumpers themselves. It also excludes many wear items, such as glass, seating fabric, and interior trim.

Although bumper-to-bumper warranties fall short of covering every part of your car, it is a far more inclusive coverage than your dealership’s other initial warranty plan: the powertrain warranty. While most new cars will come with a bumper-to-bumper warranty at the time of purchase, this coverage is generally only available for the first three years of 36,000 miles, whichever comes first. While the powertrain warranty lasts anywhere from 5-6 years and up-to 100,000 miles, whichever occurs first. A powertrain warranty will cover everything in the car’s propulsion system. This coverage will take care of issues with the wheels, driveshaft, engine, and transmission. Issues with the car’s battery, clutch, or other “wear items” will generally be excluded from this type of warranty. Although the powertrain warranty will stay in place longer than the bumper-to-bumper, it covers only the majority of potential issues with your car, and leaves many areas uncovered that can be taken care of with a bumper to bumper plan.


After your manufacturer’s warranty expires, you will have many options regarding how you decide to cover your vehicle. Extended warranty administrators will contact you to offer their various warranties, and it is important to be able to differentiate between their levels of coverage so that no part of your warranty ever takes you by surprise.

Powertrain Warranty

First of all, you will have the option of extending your powertrain warranty. Again, this is the type of plan that covers all your basic components, including your engine and transmission. Power Train warranties cover everything that is necessary to make your car function properly, but very little aside from those basic parts.

Stated Component Warranty

You also can opt for Stated Component coverage, which is a larger, more inclusive version of the powertrain. This type of coverage will guarantee protection of everything that helps your car run, as well as other parts such as brakes, electrical components, suspension, and more. Stated component coverage lists very specifically all of the things that it covers, which helps prevent discrepancies between the customer’s expectations and the coverage in reality.

Exclusionary Coverage Plans

If you purchase Exclusionary Coverage as your manufacturer’s warranty expires, you will have access to the highest level of coverage available. This plan often will cover everything that the Stated Component plan does and more. An exclusionary warranty does not list the parts it covers, but rather lists the parts it excludes, thus how it got its name. If the part in consideration is not found in the warranty exclusions, then it is covered.


Clearly, there is a lot of variety when it comes to auto warranties. The coverage of plans range from the basic necessities to nearly everything that could possibly go wrong with a vehicle. With any of these warranties, though, one thing remains the same: it is crucial that you understand the intricate details of your warranty and what it covers, so that you won’t be fooled the next time you bring your car in for a repair.

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