Understanding Your Auto Warranty

By Author: Steve Khzakia
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What with the U.S. government taking over General Motors and propping up Chrysler, not to mention the unprecedented recalls of Toyota's in late 2009 and early 2010, understanding your auto warranty has never been more vital to your economic (and mechanical) health. The issue is so important to consumers that the federal government made a specific promise to back the warranties of both firms' new car sales during the corporate rebuilding process.

Time was when most new car warranties were almost identical, and used car warranties non-existent. The standard factory warranty would provide either bumper-to-bumper or power train coverage, the former often three years or 36,000 miles, and the latter somewhat more. You were always able to add an extended warranty or service contract to lengthen the coverage period. In the past few years, however, much has changed on the warranty front, with some auto industry observers crediting Hyundai, the Korean carmaker, with stirring things up in the consumer's favor. The firm offered the first 10 year, 100,000 mile warranty.

Warranty wars?
Every new car comes with a warranty, ...
... of course, and most are longer and more comprehensive than in times past. There may even be a separate power train warranty on top of the regular vehicle warranty, and the consumer can add even more coverage with an extended warranty, usually sold in the dealerships. Automobile-related sites generally cite five years/60,000 miles as the "average" new car warranty, but "your mileage may vary" and you should make warranty questions a key part of your investigation, even before you get to the dealership.

The Federal Trade Commission, consumer testing/reporting groups and personal finance experts all recommend an old-fashioned approach to resolving any possible discrepancies and misunderstandings about your warranty. They suggest reading it. If you feel you need help understanding it, then ask for help from family or friends. Every family or neighborhood has at least one "car enthusiast" if not a car salesman or insurance agent. The bottom line for understanding your specific auto warranty is reading it.

Still unclear?
The fact is, if you bought and are paying for a new auto, you should feel empowered as a consumer to address any lingering questions about your warranty with the car salesperson, the dealership or the vehicle manufacturer. Remember that it doesn't matter what the sales person told you, what the dealership owner told you or, in fact, even what the president of General Motors told you, about the warranty or anything else. It matters what you put your signature to. If it is not covered in the written warranty, there is a different guarantee that is operating - the guarantee that you won't get any coverage that isn't in the contract.

This is actually another source of empowerment for you, and is not a negative, although it depends on your reading the warranty and understanding what it does and does not cover. If you go in with this information, when buying either a new or a used car, you will be able to make an informed decision about whether and to what extent you should get extended coverage. You may need it on a new car or a used one, all depending on what your initial investigation told you about vehicle dependability, build quality, repair records, repair costs and such factors. No, it isn't finger-snapping simple, but it is certainly within the capabilities of anyone with average intelligence - and a strong desire to get the best possible deal.

Options and other information
When it comes down to buying an extended warranty or service contract, you can avail yourself of the ones offered by the car manufacturer, dealership or an independent third-party firm. You can also buy the coverage at any time, and not necessarily when you buy the car. However, if you are thinking strategically, you will have made this decision before entering into financial negotiations over the auto purchase, as it may become a bargaining chip of some kind during that time.

There are other things to remember about extended warranties, and although this is not an exhaustive article on this sub-topic, you should remember that "caveat emptor" (let the buyer beware) is always good advice. In addition, a manufacturer's extended warranty has the dealer and the manufacturer behind it, which counts a great deal especially if you have an existing relationship with the dealership. On the other hand, most dealerships sell the manufacturer's extended warranty as well as one (or more) underwritten by an independent firm. The third-party contract is likely to be less costly, often with better coverage, and these independent firms write policies on all car makes and models.

The bottom line? As usual, know what you're dealing with by reading your warranties carefully and having any confusing parts explained to you. You can use this information to your advantage at every point in the process, so don't put off doing your homework. Knowledge is not only power - it's money saved, as well.
About Author:
Endurance Warranty.com has been helping car owners save money and gain peace of mind for almost twenty years. You won't find a more affordable or more comprehensive group of extended extended warranty plans anywhere. Nor will you find more knowledgeable or friendly staff to help you find the warranty for you. Visit online today.