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What to Look For in Car Warranties

In October 2022, new vehicles in the U.S. had an average transaction price (ATP) of $48,281. That’s $187 more than the previous month’s ATP and a whopping $1,775 higher than October last year.

With cars now costing that much, you’d want to ensure yours wouldn’t break down in just a few years. That can still happen, but you may not have to pay for its repairs, depending on your auto warranty.

So if you’re shopping around for a new ride or your old warranty has expired, it’s time to shop for new car warranties.

Below, we’ll share some crucial tips on buying a car warranty and what to look for in one, so read on.

Length of Bumper-to-Bumper Warranty

All new and certified pre-owned (CPO) cars have a manufacturer or factory warranty. It is a type of limited warranty that binds a car maker or seller to back its products against design flaws. So if a car’s parts are defective, the warranty covers their repairs or replacement.

Factory warranties have several components, one of which is the bumper-to-bumper warranty. In some brand-new cars, automakers refer to it as a “new vehicle limited warranty.”

A bumper-to-bumper warranty covers almost everything between the front and rear bumpers. These include all major systems, such as air conditioning, electrical, and steering.

Most bumper-to-bumper warranties have a 3-year/36,000-mile term, whichever comes first.

The 3-year term provides coverage for inclusions for the first three years you own your car. After that, you’d be responsible for the repair costs of items the expired contract used to cover. That’s a long time to keep paying for repairs, as U.S. drivers now hold on to their cars for over 12 years.

However, your car’s warranty can expire sooner if you reach 36,000 miles in under three years. In this case, you’d have to shoulder the cost of repairs needed from the 36,001st mile onward. Unfortunately, that’s very likely, as U.S. motorists now drive an average of nearly 13,500 miles yearly.

The good news is that some bumper-to-bumper warranties come with a 5-year/60,000-mile term. For example, they come standard in brand-new Kia, Hyundai, and Mitsubishi vehicles.

Length of Powertrain Warranty

All new vehicles also come with a powertrain warranty. It covers repair or replacement costs for powertrain components. These include the engine, transmission, differentials, seals, and gaskets, to name a few.

Most standard powertrain warranties have a 5-year/60,000-mile term. However, some makers have 10-year/100,000-mile warranties. The longer-term ones are, once again, from makers like Kia, Hyundai, and Mitsubishi.

Length of Perforation Warranty

A perforation warranty is a coverage for outer body sheet metal panels. It covers the cost of fixing or replacing them when they get rusted through during everyday use.

A rust-through means the corrosion has made its way deep into the metal. It’s different from surface corrosion, which is only rusting on the topmost layer of the metal. Perforation warranties exclude minor damage caused by surface rust.

Kia’s perforation warranty starts at five years; it’s seven for Hyundai and Mitsubishi. Ford’s standard coverage is eight years, while Toyota has among the longest, at 12 years.

Availability of Additional Perks

Some new vehicle limited warranties also include emergency roadside assistance. With this, you can call an in-network emergency mechanic to help you with minor mishaps. Examples include topping up your tank if you run out of gas or replacing a dead battery or a flat tire with your spare.

You may also get a restraint system coverage for airbags and seat belts. This inclusion usually has a 5-year/60,000-mile term, depending on the car manufacturer.

What the Warranty Specifically Doesn’t Cover

Normal wear and tear is an exclusion in most manufacturer warranties. However, some manufacturers provide a 1-year/12,000-mile warranty for wearable components. Such parts include drive belts, brake pads and rotors, fluids, and clutch materials.

Factory warranties don’t include coverage for damage due to accidents. So if you get involved in a traffic incident, you should file a car insurance claim, not a warranty claim.

Damages due to abuse, misuse, and third-party modifications are also typical exclusions. Likewise, maintenance like filter changes and fuel replacements aren’t part of the package.

Coverage for Older or Out-of-Warranty Cars

Car makers offer longer-term warranties, but you must buy them from the get-go. For example, say you’re buying a car with a 3-year bumper-to-bumper warranty; you can upgrade it to a 5-year term. You have to pay for it on the spot, though. 

Car makers also offer to extend existing factory warranties that are about to expire. The caveat is that, in most cases, you must buy the extended warranty while the original one is still valid.

Fortunately, vehicle service contracts are available for out-of-warranty or older cars. Also known as extended warranties, they’re plans sold by third-party providers. They usually cover everything a factory warranty does and more.

For example, some extended warranties cover tire services and surface corrosion. Others even provide mechanical breakdown assistance, including towing services. These extras are, in turn, often exclusions in factory warranties.

Another of the top benefits of extended warranties is their longer maximum terms. Their standard bumper-to-bumper coverages usually start at 5-year/60,000-mile terms. However, you can purchase contracts that last as long as 200,000 miles, even up to 300,000 miles.

Extended car warranties are also usually transferrable to new owners. That’s a plus if you want to sell your ride after its factory warranty expires. After all, many used car buyers want a warrantied vehicle.

Those are just some of their pros, so if you’d want to learn more, check the vehicle service contracts linked here.

Shop Around for the Best Car Warranties

Remember: Emergency car repairs can cost hundreds to thousands of dollars. And the older a vehicle is, the more prone it is to breakdowns that cost so much to fix. Indeed, a third of U.S. adults say they can’t afford sudden auto repairs.

You don’t want any of that, so buy one of the longer-term, less-restrictive car warranties. Alternatively, you can get an extended warranty once your existing one expires. Doing so allows you to keep driving your car for years with fewer worries.

For more informative guides like this, check out our latest news and blog posts!

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