Understanding new car warranties

While many consumers mistakenly believe that their new car warranty will cover all maintenance and repairs, the truth may differ depending on which car brand they bought. In this article we’ll explore how warranties work, compare how major manufacturer warranties stack up, and if extended warranties, also known as extended service contracts, are worth it.

What does a new car warranty cover?

New car warranty terms can vary depending on the specific components they cover. For example, one warranty might offer bumper-to-bumper coverage for 3 years/36,000 miles, but will continue to cover the powertrain until 5 years/60,000 miles. We’ll look at each of the components most often covered by warranties.

Manufacturers’ warranties also cover items such as air bags, emissions controls, and rust perforation. A number of hybrid vehicles offer extended coverage specifically for the hybrid components.

How do major manufacturers’ warranties compare?

We’ve compiled a list how the major manufacturers compare on each item listed above.

Which warranty is best?

These days most car manufacturers make consistently reliable vehicles—the vast majority of new cars will not need any major work done during the warranty period. The primary function of a new car warranty is to protect the consumer against rare instances of unforeseen defects. Typically warranties only provide bumper-to-bumper coverage for three to four years, before the time when normal repairs will ordinarily start to become necessary.

While manufacturers like Hyundai offer longer coverage periods to encourage clients who intend to hold onto the vehicle for several years to consider the brand, others like BMW offer shorter warranties with extras such as maintenance that can make leasing the vehicle a more attractive option. The best warranty for you depends on how long you intend to drive the vehicle.

What do extended warranties cover?

Car owners who plan to keep the car beyond its normal warranty can choose to purchase an extended warranty (also known as an extended service contract) that will continue to cover the vehicle beyond the manufacturer’s warranty. These typically cover parts and labor expenses for most repairs after the original warranty expires. Some will also include roadside assistance.

When are new car extended warranties worth it?

Whether you’re hauling kids to games, camping gear up mountains, or groceries back home, a lot happens in your car. An extended warranty, also known as an extended service contract, may be for you if you want peace of mind from life’s what-ifs. Here is what an extended service contract provides:

• Protection against costly repairs: Extended warranties can help offset costly repairs as cars age. In the long run, extended warranties can save you money.
• Budget friendly: Extended warranties fit into your budget by spreading repair costs across a longer period of time. 
• Resale value: Having an extended warranty can help you sell your car faster and at a higher price by making a potential buyer feel confident in purchasing your vehicle. 
• Additional benefits: Some extended warranties offer additional benefits like roadside assistance, rental car coverage, and trip interruption coverage.

Many extended warranties will have a deductible. If you feel that an extended warranty would be beneficial to you, you should consider both the term of the warranty and the deductible before you make a decision. (Many Cartelligent clients choose a 72 month/72,000 mile and an 84 month/100,000 mile warranty; both have a $50 deductible and other terms are available).

If I lease a new car do I need an extended warranty or extended service contract?

Leased cars are almost always under the factory warranty for the full lease term, which averages 36 months. This means that unexpected mechanical repairs, except for accidents and normal wear and tear, are covered during the lease. For the average 36-month lease term, the complimentary factory warranty is enough coverage for most lessee mechanical repairs. 

To avoid penalty costs upon return, some Cartelligent clients choose to purchase additional lease protections like Safe Lease. Cartelligent staff who lease often choose to get additional lease protection. This decision helped one staff member avoid a large lump-sum penalty when her puppy chewed up her leased car’s back seats. For more guidance on potential lease-end charges, read our guide to returning your leased car. 

If you plan to buy out your lease, you may want to consider purchasing an extended warranty, also known as an extended service contract. This is because the factory warranty may not cover your vehicle if it has expired during the initial lease period. If you are ready to learn if an extended service contract is for you, contact our team of advisors today.

Can extended warranties or extended service contracts be purchased later or transferred?

Extended warranties, or extended service contracts, for new cars can be purchased anytime after signing as long as it fits the provider’s perimeters. Just keep in mind that the price will increase as your vehicle ages and mileage increases. 

The extended vehicle contract is not transferable between vehicles as the coverage and price were designed for that one specific car.  Transferring a repair agreement to a new person can be done as long as it is included in the terms of your contract. If you choose to sell your car, the included service contract can increase the value of your vehicle. 

Get a New Car Advisor in Your Corner

Navigating the various warranties can be difficult without an expert on your side. Wherever you are in your car-buying journey, Cartelligent is here to help. After your initial call, your Cartelligent car broker can help you decide what California new car warranties, if any, fit your lifestyle. 

Just tell us what type of car you’re looking for and let us do the rest. We handle all the research, price negotiation, and trade-ins for you. Call our team of new car-buying brokers at 888-427-4270 or get started today.