Vehicle warranties almost always come with the purchase of a new vehicle. Not only do most lenders prefer you to have it, but it can save you from paying too much for costly repairs in the event something is faulty. Warranties come in all makes and models, but they generally all cover some of the basics.
But how do you know if the car warranty you have is a good one? Understanding what warranties are, how they function and what you can expect from any policy is a good place to start your assessment. If you find your warranty is lackluster, then here are some additional tips for finding a better one and what it will cost you.
If this is the first time you have purchased a vehicle you may wonder what a car warranty is or does. In a nutshell a vehicle warranty offers a form of guarantee on the various components of your vehicle. Often this warranty is backed by the manufacturer. You may have been offered either a limited warranty, which means over a period of time it will expire and you will be liable for any problems, or a lifetime agreement.
Most often a dealer refers to these warranties as “bumper to bumper” or “powertrain” coverages.
The lifetime is misleading in that specific restrictions and conditions are applied to that warranty. These exceptions are noted on the warranty, so be sure to review it.
A car’s warranty should not be confused with car insurance. They are two distinctly different types of coverages for your car. A car warranty primarily covers mechanical failures due to issues or defects in the manufacture of the car.
Car insurance covers problems to your car as a result of an accident, natural disaster, fire or theft.
Your car warranty should not be an additional cost on top of the purchase of your vehicle. It is almost always included in the cost of the car, whether it is a new or used vehicle. Car warranties do not include roadside assistance like your insurance does, and a warranty is not required by any state as a prerequisite to getting your license.
In many states you must have at least a basic car insurance policy before you can register the car.