What Does a Car Warranty Cover?

One of the first priorities once you’ve bought a new car will be to ensure it’s protected against future problems and unexpected damage. While car insurance is a legal requirement to ensure your vehicle is roadworthy, a car warranty is a different matter.

In short, a car warranty is an agreement between yourself and your car manufacturer or third-party provider that they will bear the cost of repair for certain mechanical or electrical failures in your vehicle. However, since there’s an element of choice involved when purchasing a car warranty plan, it’s likely that certain components of your vehicle won’t be covered under a place – so it’s essential that you read the fine print and take note of any terms and conditions.

To help you understand the type of coverage a car warranty provides, we’ve put together the guide below that runs through everything you need to know.

What does a car warranty cover?

There are two main types of car warranty: a manufacturer’s warranty (also known as a “factory new car warranty” or “new vehicle limited warranty”), and an extended car warranty. Each type of warranty covers a different set of components.

Manufacturer’s warranty

The manufacturer’s warranty is a guarantee given by the vehicle’s maker to financially protect specific components of the car. It will cover the core components of your car, which includes the engine, transmission, fuel system, cooling system, brake system, steering, radiator and suspension.

It’s likely that the manufacturer’s warranty will be included in the price of a new vehicle, and will guard against defects or issues that may be caused at the time of manufacture, the workmanship or the materials – for instance, something over which the buyer can’t have had control.

The length of protection can vary, but it will usually cover a period of three to four years after purchase, or a particular number of miles – 60,000 miles is typical.

Most manufacturer warranties are transferable because they’re linked to the vehicle identification number (VIN), rather than to the specific owner of the car. However, if you’re buying a second-hand car with a pre-existing warranty, either you or the seller may still have to pay an additional fee to cover the admin costs of transferring the warranty.

Extended car warranty

An extended car warranty is an additional policy that’s purchased to protect the vehicle beyond the initial period for which it’s covered. This extension could be to the amount of time or miles covered, or it could include protection for additional aspects of the vehicle. These warranties can include:

• Bumper-to-bumper warranty – The most comprehensive extended protection, this covers the majority of your vehicle’s system and parts.
• Powertrain warranty – Covers all of the system components relating to powering the vehicle into movement (engine, transmission, drive systems, drive shaft, for example).
• Rust, corrosion and perforation warranty – Covers repairs and replacements of the body’s sheet metal parts.
• Accessory warranty – Covers a range of auxiliary components such as seat belts, air bags, roof racks, interior lighting, and navigation systems.

It’s worth noting that an extended car warranty will fall under either stated-component coverage or exclusionary coverage. In the former, your plan covers the repair of only specific parts, while the latter covers everything aside from a small list of specific parts or types of damage. The option of a “wrap warranty” also helps to fill gaps in coverage if you have various warranties that expire at different times.

An extended car warranty is a good option for vehicles whose manufacturer’s warranty has lapsed. It’s also a must for those buying a second-hand car.

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What isn’t covered by a car warranty?

Typically, a manufacturer’s warranty is unlikely to cover any damage that’s the result of:

• Normal wear and tear of any car parts that are destined to degrade over time due to regular use, such as wipers, brake pads, tires, light bulbs, and spark plugs;
• Routine maintenance, such as changing oil, rotating the tires, checking tire pressure and adjusting wheel alignment. Such tasks are your responsibility, not that of the manufacturer;
• Cosmetic repairs to the vehicle’s body and interior work (with a few exceptions);
  • Custom modifications
  • Improper repairs
  • Damages caused by neglect or abuse

While a car warranty will cover the majority of mechanical issues, you won’t necessarily be covered for roadside assistance, towing, or reimbursement on rental cars.

For a more in-depth look at what can void a car warranty, read our guide here.