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When Is It Wise To Buy An Extended Vehicle Warranty?

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When Is It Wise To Buy An Extended Vehicle Warranty?

Due diligence is important for every car buyer – not just to choose which vehicle to purchase, but to decide on the right warranty plan. When your basic manufacturer warranty expires, is it in your best interest to take out an extended warranty? The answer depends on your vehicle, finances, and priorities.

What Is A Vehicle Warranty?

A new or certified pre-owned vehicle warranty is a legal agreement that helps maximize your investment. When you pay for a new vehicle, manufacturers or dealerships often offer basic or extended warranties. These are contracts between you (the purchaser) the warrantor. The contract states that if you follow the rules of the warranty, the warrantor will cover the costs of certain maintenance and repairs on your vehicle for a specified amount of time.

A vehicle warranty means you can qualify for free repairs or part replacements from the warranty provider, over the time frame listed in the contract. Warranties can protect you from paying out-of-pocket for expenses such as unexpected part breakdowns, malfunctions, or defects. If the vehicle you purchased has a faulty part, the warrantor will pay for repair or replacement so you don’t have to. Warranties are wise ways to protect the substantial investment of a new car.

Basic Vehicle Warranties

Basic warranties automatically come with most new car purchases. Other names for the basic warranty are standard warranty, factory warranty, and “bumper-to-bumper” warranty. A basic warranty typically comes from the vehicle manufacturer. Most cover a new car for three years, or 36,000 miles. Most basic warranties cover all items on and in the vehicle, other than wear-and-tear items and general maintenance. These can include:

  • Body panels
  • Interior repairs
  • Tires
  • Brake pads and linings
  • Windshield wipers
  • Oil changes
  • Tire rotations

Basic warranties only cover certain things. If a covered item has a defect or breaks down through no fault of the owner’s, the manufacturer will cover the costs of part repairs or replacements. Once the warranty expires, however, it is up to the owner to pay for repairs. An extended warranty is a plan an owner can purchase after the expiration of the basic warranty. It is an optional form of protection that can continue coverage for part repairs and replacements.

What Comes With An Extended Warranty?

An extended vehicle warranty typically provides similar coverage to the basic warranty. It will provide coverage after the basic warranty expires, at three years or 36,000 miles. Most extended warranties protect against electrical or mechanical malfunctions for an additional 20,000 miles or more. As in a basic warranty, the warrantor will pay the costs of fixing certain parts, saving the vehicle owner money if something breaks down. An extended warranty’s reach will depend on the company providing coverage.

A typical vehicle contains over 5,000 parts. Most basic and extended warranties do not cover every single part. Instead, they cover specific items, listed in the terms of the warranty. It’s important as a purchaser to read the fine print of an extended warranty before buying. It may not be worth the investment if it offers very limited coverage, or if it has many loopholes that could enable the company to get out of paying you. Most car dealers can give you the details on an extended warranty when you purchase the vehicle.

Is An Extended Warranty A Good Investment?

For some drivers, the basic warranty is enough to offer peace of mind at a lower price. Yet if you are truly nervous repairs may be necessary, you may wish to extend your basic warranty for an additional 20,000 miles or so. Extended warranties are an additional cost at the time of purchase that could be worth the investment. However, you are gambling that the money intended to go toward repairs will pay for a plan you’ll never use.

Depending on your financial situation, it may be more beneficial to take the dollar amount of the extended warranty and put it in a savings account in case of vehicle emergencies. That way, if nothing goes wrong with your car, you can use the money toward something else. If you invest it into a warranty, you spend the money whether your vehicle experiences breakdowns or not. If you’d prefer to have longer-lasting peace of mind about vehicle repairs, however, an extended warranty program could be an ideal solution. Compare quotes and options from different providers to find the best deal for you.

Other Vehicle Warranty Options

The basic and extended warranties are not your only options as a driver. Depending on what vehicle you purchase, the manufacturer may offer more robust protection plans. Luxury brands often have warranty options that last longer and for more miles than typical contracts. Other car companies have extended their warranties to attract more buyers. Hyundai’s basic warranty, for example, covers the vehicle for five years or 60,000 miles.

Regardless of which manufacturer you go with, you may have additional warranty options available to you. Most manufacturers permit buyers to take out more than just the basic warranty, if they wish. An adjustment warranty from the dealer can cover small issues within the first 90 days of purchase, such as leaks, alignments, or rattling noises. A powertrain or drivetrain warranty can cover the engine and mechanical parts of the vehicle (this comes with most basic warranties). A corrosion or rust warranty can cover the cost of repairs due to metal deterioration.

If you’re afraid of your new car encountering costly problems, lay your fears to rest with the right warranty plan. Consider your priorities and budget to determine if an extended warranty is worth your while.

Which Modifications Could Breach A New Car Warranty?

Which Modifications Could Breach A New Car Warranty

Many consumers are curious which modifications could breach a warranty on a new vehicle. Violating the terms of a contract could be a costly mistake for new car owners. Some aftermarket alterations may void the new car warranty on certain parts or the entire vehicle, while others will not. Learn the difference to protect yourself from out-of-pocket expenses.

The Basics Of New Car Warranties

A new car warranty is a legal contract where the purchaser of the vehicle and the company providing coverage agree on certain obligations. Most warranties will cover certain part repairs and replacement within a set period. If the vehicle experiences a problem or defect within the time frame of the warranty, the provider will cover the costs of part repairs so the financial burden does not fall on the vehicle owner. New and certified pre-owned vehicle warranties can save a consumer thousands of dollars in vehicle repairs.

Almost all new cars come with factory warranties, or bumper-to-bumper warranties. Factory warranties protect owners against factory defects in the first few years after purchase. Car owners can choose limited or full warranties depending on their needs and budgets. A limited or basic warranty covers all parts of the vehicle except body panels, drivetrain components, and parts that are subject to regular wear and tear, such as brake pads or tires. Most new cars also come with drivetrain warranties to supplement the basic warranty.

A typical warranty is good for three years or up to 36,000 miles. Some luxury brands extend their basic warranties to four years or 50,000 miles. The ten-year powertrain warranties from Kia, Mitsubishi, and Hyundai are only good for new vehicles. Buying a vehicle used will come with a five-year or 60,000-mile warranty instead. Read the fine print of your vehicle warranty for information about which modifications – if any – could breach your end of the contract. Every warranty is unique.

New Car Warranties And Vehicle Modifications

Many consumers are under the impression that all modifications will instantly void a new car warranty. Luckily, this is not the case. Several modifications will not void a warranty, as long as the vehicle owner follows the stipulations of his or her contract. For most warranties, a vehicle modification will only void a warranty if the aftermarket part caused the issue that requires repairs. Otherwise, the new car warranty will still cover the vehicle despite the personalized modifications.

The Magnuson Moss Warranty Act

You can’t fully understand new car warranties and modifications without the Magnuson Moss Warranty Act. Passed into federal law in 1975, this act forces consumer product manufacturers and distributors to provide clear and detailed information about warranty coverage. It also gives consumers an outlet to seek financial remedy for breach of warranty. The Magnuson Moss Warranty Act has a clear provision prohibiting vehicle manufacturers from forcing buyers to only use name-brand vehicle parts.

The provision states that no warrantor of a consumer product may include a condition forcing the consumer to use an article or service identified by brand, trade, or corporate name – other than an article or service the manufacturer provides for free under the terms of the warranty. If the manufacturer can prove that a name-brand part is necessary for the vehicle’s safe and proper function, the manufacturer may apply for an exemption to the rule. This, however, is rare. The act gives the Federal Trade Commission (FTC) the power to interpret the application of this provision.

On the FTC’s website, it addresses modifications and new car warranties. It says consumers do not have to use the dealer for repairs or maintenance for the terms of the warranty to stand. The FTC states that the consumer can make repairs him/herself, take the vehicle to an independent mechanic, or a retail chain shop for repairs or maintenance and still enjoy the benefits of the warranty. This does not mean, however, that the same rules apply for vehicle modifications using aftermarket parts.

Vehicle Maintenance Vs. Modifications

The Magnuson Moss Warranty Act may protect consumers from breaches of warranty for maintenance and repairs, but what about aftermarket modifications the vehicle doesn’t necessarily need? The act gives vehicle manufacturers the right to refuse to pay for warranty repairs someone else’s vehicle part causes. If the aftermarket part contained a defect, or the individual did not install it correctly, and this causes damage to another part of the vehicle, the manufacturer has the legal right to deny warranty coverage for repairs.

Simply installing an aftermarket, non-name-brand part in your vehicle will not void your new car warranty. Installing a modification that causes damage elsewhere in your vehicle, however, could take away your ability to request paid-for repairs of the damaged part. A vehicle manufacturer has the right to refuse to pay for repairs if a modification caused the damage, as long as the manufacturer can prove that the aftermarket part caused the need for repairs. If the modification did not cause the breakdown, however, the warranty will still cover the part.

Partial Void More Likely Than Full Void

Even if a vehicle modification voids your warranty on certain parts, it typically will not affect the rest of the vehicle. The new car warranty will still cover repairs and maintenance on parts of the vehicle the modification did not affect. A manufacturer does not have the power to void an entire warranty because of a modification that only impacts part of the vehicle. Always read the fine print of your new car warranty to find out what it does and does not cover before investing in aftermarket vehicle modifications.