What is a Manufacturer's Warranty?
The cost of the manufacturer's warranty is included in the purchase price. The manufacturer promises to stand by its product and asserts that the manner in which the car was made and the materials used to make it are free from defects. A typical manufacturer's warranty lasts 3 years or 36,000 miles, whichever comes first. The manufacturer's warranty is a guarantee that the manufacturer will make any necessary repairs due to defective materials used or improper manufacturing, at no charge to the owner.
Some points to remember regarding a basic, or bumper-to-bumper, warranty:
- It covers anyone who owns the vehicle during the warranty period, not just the original purchaser. Most manufacturers have eliminated any transfer fees for reassigning the warranty to a new owner when the vehicle is sold. Check to determine if all warranties are transferable before purchasing the vehicle.
- All services that are included should be free of charge, including removing and reinstalling any system warranted. In other words, parts and labor are free.
- If after a reasonable number of attempts, the dealer is unable to repair the vehicle or part, you should be compensated with your choice of either a full replacement vehicle or a full refund.
- Other than having the required maintenance done at the specified times, you are not required to perform any duty as a precondition for receiving warranty service beyond notifying the dealer that service is necessary.
The following are often excluded from the warranty:
- Normal wear and tear. For example, items like windshield wipers, filters, fuses, light bulbs, and brake pads are usually not covered.
- Normal maintenance costs are not covered and damage resulting from improper maintenance can void the warranty altogether. The cost for tune-ups, oil changes and other regular maintenance is your responsibility.
- Damage that results from "Acts of God."
- Problems resulting from improper use or negligence of the vehicle. For example, not using the correct fuel or oil.
- Structural changes made to the body of the vehicle.
To keep your warranty in effect, you must operate and maintain your car according to the instructions in your owner's manual. Keep a record of all maintenance performed on your vehicle.
A limited warranty excludes one or more of the benefits found in most basic warranties. Instead of covering the entire vehicle, it may only cover specific systems, or you may have to pay a deductible toward repairs. Refer to the Buyer's Guide sticker on the vehicle to determine if the vehicle is being sold "As is," with no warranty, with a full warranty, or with a limited warranty.
Purchasing An Extended Warranty?
When considering the purchase of an extended warranty, you should first evaluate the standard factory warranty to determine if the length and degree of coverage meet your driving needs.
Extended warranties are designed to lengthen the standard warranty up to as much as six years. They are available with time and mileage variables that can be selected to meet your specific needs. Many of the extended warranties require you to pay a preset deductible amount every time the vehicle is repaired. The number of components covered varies. You should read the covered component list prior to purchasing the warranty, as some important components may be excluded. Any service or part not listed in the contract is not covered, even if the salesperson says it is.
Extended warranties are supplemental agreements between you and the dealer, the manufacturer or the independent insurance company. Whenever possible, purchase the extended warranty issued by the vehicle manufacturer. This guarantees you service on a nationwide dealer basis. Many independent contracts are honored only at the dealership that sold them.
Certain restrictions apply to all policies, so read the contract carefully. Check the deductible amounts, the covered components, the length of the contract, any towing and rental reimbursement, transferability to subsequent owners, any exclusions and the repair authorization requirements. Extended warranties do not cover the expense of routine maintenance or damage covered by accident or abuse.
What are Warranties on Used Vehicles?
In the past a warranty on a used vehicle was unheard of, unless you managed to purchase a vehicle while it was still covered by its original manufacturer's warranty and that warranty was transferable. However, in today's market there are many two or three-year-old used cars available due to individual leased cars, company cars, and fleet cars being turned in after their lease or desirability expires. As an incentive for you to purchase these vehicles, many dealerships now offer full warranties on the used vehicles that they have brought up to mint condition and limited warranties on used cars in not so perfect condition.
To determine the manufacturer's warranty on the car you want to purchase, all you have to do is look for the Buyer's Guide Sticker displayed on the vehicle. Dealers are required by law to display a Buyer's Guide Sticker on every vehicle, except motorcycles and some recreational vehicles, in order to inform you whether the vehicle comes with a warranty and what that warranty includes. It's your job to educate yourself with regard to what the warranty information provided means.
The following are a list of terms you need to familiarize yourself with:
- As is: This means that there is no warranty offered and that you are responsible for all repairs. If you can prove the dealership knew of a defect and failed to disclose it, the dealership can be found liable. This is not the easiest thing to prove. Whether your state allows "as is" sales or not, it is best to avoid buying any vehicle "as is." At the very least, try and negotiate for a limited warranty that covers 100 percent of any defects that show up in the first ninety days, otherwise walk away from the deal.
- Limited Warranty: Are usually offered on older cars in good, not perfect, condition. The cost of repairs is split between the buyer and the dealer. It is important to note how the cost of the repairs are split. Therefore, it is important that you look to the Buyer's Guide, which the dealer must supply on each vehicle it sells, to determine the limited warranty conditions provided. Be acquainted with any deductibles that may apply, the percentage of repair costs that the dealer contributes toward parts and labor, the time and mileage requirements of the warranty for each system and the specific parts and systems that are covered under the warranty.
- Full Warranty: Are usually offered only on newer, fully restored vehicles in pristine condition. All repairs included should be free of charge.
In addition, have your warranty specify that the dealership will provide copies of their suppliers' invoices for parts used in repairs and stipulate that you have the option to buy parts outside the dealership if they are less expensive than the price quoted you. Ask for a copy of all warranties in place on any new parts that were installed as a part of refurbishing the vehicle prior to its sale. Ask to see any unexpired warranties that may exist and note if there are transfer fees.Warranty Brochure