When you purchase a new vehicle from any car dealership it comes with a warranty. This warranty is usually called a Factory Warranty. The car manufacturer makes this warranty possible for a specific number of years or until you reach a certain number of miles. It covers most mechanical and electrical problems. This includes parts and labor. Normal wear and tear on your car is not covered under this warranty. This means that car seats, tires, brakes, etc. are not covered.
Some factory warranties offer Unlimited Mileage so that you don’t have to worry about reaching a set mileage thereby ending the warranty. If you have a factory warranty with unlimited mileage for three years you could drive one hundred thousand miles and above. It wouldn’t matter. You are covered for the full three years.
When it gets close to the ending of your factory warranty you will usually be offered an Extended Warranty. It comes by mail offered by the manufacturer, a warranty administrator, who works at the car dealership, or a corporation. Extended Warranties cost extra offering huge commissions to the seller, but if you are hard on cars it may be worth the investment in the long run.
Let’s say your factory warranty is good for two years then you may wish to purchase an extended warranty good for an additional year. The extended warranty would cover the same parts with labor as the factory warranty, but you may want to check to make sure.
Some companies do like to factor in a one-time deductible. Although an extended warranty is sometimes referred to as a Service Contract it differs in that it becomes effective when a factory warranty expires. A service contract is effective immediately and may end during the time of the factory warranty or before.
A Powertrain Warranty covers mainly the engine and transmission plus the parts that make up the four-wheel drive. It is another option you may wish to consider instead of buying an extended warranty.
When visiting the car dealership you may find that you want to purchase a Demo Car. A demonstration car has miles accrued upon it before you leave the parking lot. It may have been a loaner during repairs on another car or a test drive vehicle for a popular car name such as Saturn. Demo Cars may still be covered under the factory warranty depending upon mileage and time remaining in the factory warranty itself.
If you are in the market for a used car they often carry a Limited Warranty. This is a warranty that, like its name, covers limited parts and labor. When buying a used car you may hold the car dealership responsible for a car that doesn’t live up to state standards with an Implied Warranty unless the dealer specifies AS IS. By using the words “AS IS” on the price sticker it makes the Implied Warranty null and void. You take the risk when you buy the car.
Being aware of what is covered under any warranty is crucial to saving time and money. Ask your car dealership for the warranty documents on the car you purchase.