How Do Car Warranties Work?


A warranty is typically included when you purchase a vehicle. It comes in handy when a car repair is needed. No automobile is immune to mechanical breakdown; the repair bill for a defect or broken part can set you back hundreds, even thousands, of dollars.

What Is a Car Warranty?

A warranty is an agreement that the vehicle’s manufacturer will cover the cost to fix mechanical problems. It also covers manufacturing defects and problems due to poor workmanship. The factory warranty provides coverage for up to a specific mileage or length of time. For example, an original manufacturer warranty may cover your vehicle for up to 36,000 miles or three years. It will expire at whatever milestone you hit first.

Each warranty covers a specified set of issues and components, such as your car’s:

  • Engine
  • Transmission
  • Air conditioning
  • Steering system
  • Backup camera and other safety features
  • Electrical system
  • Suspension
  • Fuel system components
  • Defective seatbelts/airbags

However, your auto warranty won’t cover damage from an accident, interior damage, or to replace brake pads, clutches, headlight bulbs, and other wear and tear items. Tires are usually not covered either. It also doesn’t cover routine maintenance, scratched paint, environmental damage, modifications, or problems caused by improper care, such as reckless driving or a lack of maintenance.

Warranties are often transferrable. If you buy a used car before its coverage is set to expire, the original warranty is still valid.

How Do Car Warranties Work?

A factory warranty, like an insurance policy, requires a claim to be filed if there’s a problem. A mechanic at a licensed repair facility contacts the service contract administrator to have the repair authorized. Sometimes, an adjuster may be sent to inspect the vehicle. With a good auto warranty, payments will be made directly to the mechanic upon authorization.

Car insurance differs in that it covers damage from accidents, including collisions, as well as fires, floods, theft, or extreme weather. It also provides liability coverage for when you cause an accident. A warranty provides a different type of protection, but as with insurance, you’ll find different types of warranties.

  • Bumper-to-Bumper Warranty: The most comprehensive coverage available, it covers all major systems, including A/C and heating components, power windows, door locks, power steering parts, technology features, infotainment systems, and hybrid vehicle parts.
  • Powertrain Warranty: Covers any part involved in the movement of your car, including the engine, transmission, drive shaft, and transfer case. Wheels, axles, gaskets, and seals are also included. The coverage period may last from 5 years/60,000 miles to 10 years/100,000 miles.
  • Drivetrain Warranty: A more limited version of a powertrain warranty. However, it does not cover the engine, although the coverage period may be even longer.
  • Corrosion Warranty: For rust and other corrosion due to water, salt, and other environmental factors as well as accident damage.
  • Emissions Warranty: Covers exhaust pipes, catalytic converters, oxygen sensors, and other emissions-related parts that contribute to the car meeting stricter emissions standards and legal requirements.

What Is an Extended Warranty?

An extended warranty covers the cost of repairs or replacement parts, and sometimes roadside assistance. Often called mechanical breakdown insurance, it can avoid having to pay for many repairs. Purchasing this warranty makes sense if you drive a used or older vehicle and its original warranty has expired.

Should You Get an Extended Warranty for Your Car?

If you plan on having the vehicle for a long time, it can be a good option. Major components are covered, although the warranty won’t pay for routine maintenance. Extended warranties can come at a price, so it’s important to weigh the risk of a car breaking down versus savings (in some cases, you may spend more on the warranty than repairs), or consider vehicles known for their reliability.

Extended Warranty vs. Vehicle Service Contract

A vehicle service contract is similar to an extended warranty (the two terms are often confused) but is not from the manufacturer. Instead, it is purchased from a dealership or third-party company. Coverage may be from three to seven years and up to 200,000 miles or more. What the contract covers varies from company to company. Obtaining a vehicle service contract can be a challenge because many providers set limitations that affect whether a driver qualifies for coverage.

Contact CarWorld

We have hundreds of certified pre-owned vehicles at our Hawthorne dealership that are in excellent condition. Our inventory consists of models from all leading carmakers so you can expect years of dependability and safety. CarWorld is open during the coronavirus pandemic, following guidelines for hand washing, sanitizing, and social distancing—your safety is our top priority. Flexible financing options are available regardless of your credit or income. To learn more, call 833-219-9951, contact us online, or visit our dealership today.

Author: CarWorld