What is an automobile warranty?
An auto warranty is a promise made by a manufacturer or dealer to cover repairs and defects over the course of a certain amount of time and certain amount of mileage. Most basic warranties are guaranteed for at least three years or 36,000 miles but may vary according to the manufacturer.
Is an automobile warranty legally binding?
Warranties are essentially a legally binding pledge to fix or replace any parts that have broken down or are inherently faulty, including defective parts. Warranties do not cover regular maintenance and will not cover breakdowns caused by accidents, acts of nature, lack of proper maintenance, contamination of fluids or fuels, collision, fire, theft, negligence or abuse.
Are there different types of automobile warranties?
Different levels of warranty coverage exist, so it’s important to understand the limits and umbrella of coverage before purchasing. These are the most typical types of warranty your car dealer will offer:
Basic “bumper-to-bumper” warranty: This is the most general coverage that pays to repair defects in factory-installed parts.
Drivetrain/Powertrain warranty: Covers the engine, transmission, and transaxle parts. This warranty tends to last longer than bumper-to-bumper.
Roadside assistance: Covers towing costs and tire changing if the car breaks down during travel.
Rust or corrosion warranty: Covers rust in sheet metal parts of the car.
Federal emission warranty: Covers repairs needed to correct defects in parts that would cause the car not to meet Environmental Protection Agency standards.
Be sure to ask these very important questions about your automobile warranty:
How long does it last? What’s the time limit on your contract? And how long will it last beyond your car’s original warranty?
What’s the mileage limit? Many extended service contracts end when a car reaches 100,000 miles.
What’s covered? What repairs are covered in an extended service contract?
What repairs are excluded? Does the warranty cover wear-and-tear in addition to mechanical failure?
What’s the deductible? A deductible is the out-of-pocket amount a customer must pay at the time of a covered repair. Deductibles range from $50 to $200 or more.
Who does the repairs? A manufacturer-backed extended warranty is good at dealerships around the country, while a dealer-backed warranty may be limited to a single dealership.
Who pays the bill? Will you pay the repair bill and be reimbursed by the company later? How long will you have to wait to find out if a repair is covered by your contract?
What are the maintenance requirements? What types of routine maintenance on the car must you pay for on your own? Be sure to keep records and receipts from all service work. With a manufacturer-backed extended warranty, all maintenance work must be performed at dealerships
Can you cancel? Some extended service contracts charge a cancellation fee and some cannot be canceled. Other contracts can be canceled free of charge during an introductory period.
Be sure to ask as many questions as you can when it comes to your automobile’s warranty. Make sure you read all of the fine print and don’t be afraid to contact your warranty provider if you need clarification on anything.
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