How Does a Car Warranty Work?
It’s all well and good having a car warranty for your vehicle, but what happens when you actually have to use it?
A car warranty is a form of insurance for a vehicle’s owner, supplied by the car manufacturer or a third party, which provides protection against defects and errors in the construction of your vehicle. Having this warranty may help you to save on substantial costs in the event your car suffers a fault or mechanical issue.
It’s important to remember that neither a manufacturer’s nor an extended warranty is the same as car insurance. Warranties will not cover any cosmetic damage caused by an accident, for example – and, essentially, warranties are an add-on rather than being a legal requirement.
How does a car warranty work when buying a new car?
If you purchase a brand-new car, it’s likely to come with a manufacturer’s warranty – also called “new car warranty” or “factory warranty” – as standard. It provides decent coverage and is pretty straightforward in its terms; you won’t have to haggle with the dealership about the repairs that are included, and there will usually be no deductible you’ll be expected to pay.
The standard length of a manufacturer warranty is three years, but it will also stipulate a mileage limit – usually 60,000 miles. If your car completes this distance within the timeframe of the warranty then your coverage expires.
How does a car warranty work when buying a used car?
If you buy a used car, there might be a chance that you’ll still benefit from the tail end of the vehicle’s original factory warranty – but it’s more likely you’ll need to purchase an extended warranty for coverage instead.
Extended warranties are available from either the manufacturer or from a third-party provider, and in the case of the latter there are multiple tiers of coverage available. Lower-cost plans will cover essential parts of your vehicle only, while higher-tier plans will offer more extensive coverage and often include extras such as breakdown cover and roadside assistance. The length of your extended warranty will vary depending on the price of your plan.
After purchasing your warranty, you’ll pay a premium every month until the set timeframe of the warranty expires – usually about three years.
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How does the car warranty claims process work?
If you’ll be using your factory warranty to pay for a repair, you’ll need to take the vehicle to the appropriate outlet – a franchised dealership or repair shop that has an agreement with your car’s manufacturer. A mechanic will check that the damaged component is covered by your warranty, and that the vehicle itself is within the warranty’s time frame. If the repair is approved by the warranty provider, the necessary work will be completed, with the majority of costs covered by your warranty provider.
What about paying a deductible?
Every time you make a claim, there will be a deductible that needs to be paid by you. You will be made aware of the amount before any work takes place, and it will usually be somewhere between $100 and $500. As such, it might be worth putting some money aside in the event that any unexpected repairs crop up.
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What happens when your car warranty expires?
Once the time period of cover has expired, you will be financially responsible for any repairs that are needed on the vehicle. At this point, you may wish to consider an extended warranty, in order to ensure you’re still covered while the vehicle is on the road.
