How to Understand a Car Warranty

It's common for people to spend hours of time looking at details and settling on the car or truck that they want to purchase, but not everyone spends as much time on the warranty. A warranty for a vehicle is critically important; this large investment, which has many moving parts and systems, is vulnerable to mechanical breakdown in many different ways. Without a good warranty, the vehicle owner is left exposed to the full cost of fixing whatever is broken. For those who want to understand a car warranty, some common basic steps will help vehicle buyers to make the most of whatever guarantees come with their set of wheels.


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    Identify from where your car warranty came. This is one of the most vitally important steps in dealing with any car warranty. There's a big difference between the comprehensive warranties that come from a manufacturer and a dealer's warranty.
    • Assess coverage options for your warranty. One of the biggest differences between the manufacturer's warranty and a dealer's lot guarantee is that a manufacturer's warranty is something that the car-making company stands behind, repairing cars up to a certain manufacturer standard, and honoring this comprehensive warranty at all participating dealerships. By contrast, the dealer's warranty may only be honored at the individual shop and may not include the same kinds of standards or attention to detail provided in a manufacturer's warranty.
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    Look at the breakdown for parts and labor. Many warranties have a specific coverage period and cost coverage for the classifications of parts and labor separately. Vehicle parts may be covered much longer than the labor on fixes. Evaluate this part of your warranty to understand what is really covered from a parts and labor perspective.
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    Consider the time frame of the warranty. For the two different classifications of parts and labor, a specific time frame usually applies. Manufacturer's warranties might have a longer time frame, like 5 to 7 years, where the kind of temporary warranty that comes from a used car dealer's lot may be as short as 3 to 6 months for both parts and labor.
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    Quantify coverage in your warranty. Another very important step is to understand what is and is not covered in your car warranty.
    • Assess the nature of your car warranty. Some warranties are comprehensive, and these are often called "bumper-to-bumper" warranty deals. Others are part specific, including drive train and engine warranties that don't cover peripheral systems.
    • Look for exclusions. Many auto warranties have specific exclusions for different parts and situations involving mechanical breakdown. Knowing what is not covered can help you plan for situations where you need to arrange for repair costs out of your pocket.
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    Understand record-keeping requirements for your warranty. A good number of warranties require the vehicle owner to keep accurate service records in order to be covered. Read the fine print and comply with these and other requirements.
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    Evaluate what kinds of repairs are offered by the warranty. Where many manufacturer's warranties indicate they will replace with OEM or originally specified parts, a dealer's warranty will usually only cover any necessary fixes with whatever parts or systems the shop finds appropriate. This aspect of a warranty changes its inherent value, so talk this over with the warranty providers to better understand how you are covered for parts replacement.

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Categories: Buying and Selling Cars