The Good and Bad Extended Auto Warranty

Cadillac SRX Crossover

Lets talk about the extended auto warranty. Although brand, make, model and price are all vital parts of a purchase decision, the automobile warranty was very likely one of the contributing factors in your decision.

A base car warranty is a valuable tool that can give you vital protection for a very long time. I had a Chevrolet Suburban that spent a lot of time at the dealership for factory covered repairs. However, not all vehicles carry the same amount of warranty. In addition, there is more than one type of vehicle warranty. With all the different information available, this can be a confusing topic. As a dealership technician I get to see what’s covered and whom will be paying before I perform any auto repairs.

What is the Standard Warranty

Your vehicle came with a warranty from the manufacturer. This is protection extended from the automaker as a sign of their faith in their vehicle. Under this warranty many repairs are covered at little or no cost. While fluid changes and other maintenance items are not covered some common costly items are.

Even brake wear and rotor warping can be covered in some cases, providing it was actual pad failure or part defect and not incorrect braking habits. Manufacturer’s warranties come in several different flavors. For instance Honda offers a 3-year, 36,000-mile warranty. Yet the power train warranty extends further. Some GM products offer a 5-year, 60,000-mile coverage, and Kia offers a 10-year, 100,000-mile power-train protection. Each automaker uses a different length of warranty often dictated by the durability of the product.

Sometimes the the product needs improvement before additional coverage can be added. Current marketing requires this to stay competitive on multiple levels. As an example, Kia lengthened their warranty in order to attract new customers. Honda offers theirs for a shorter duration and can get away with it because of their reputation for dependability.

A manufacturer’s warranty can help offset the costs of anything related to faulty design and manufacturing. For example, if your master cylinder were to fail at only 15,000 miles chances are the part was defective.

The car maker would pay for parts and labor to replace this part. In the case of an item that incurs wear over time, many manufacturers will split the cost with consumers especially just after the warranty has expired.

Note that not all car company’s do this or all dealerships. An extended coverage plan is much different from your manufacturer warranty. For one thing you must purchase this on your own it is not included in the price of the automobile. Additionally, different insurance companies offer different coverage.

Example: if you go to the dealership for car repairs the service department will have to contact the warranty company for authorization to diagnose the problem as well as to repair it. It’s not uncommon for a plan to pay for the parts but not the labor.

In addition, extended policies will have a deductible much like insurance. You have to meet this deductible for each problem, in most cases. Unlike your insurance, the deductible is not an annual occurrence but applies with each use of the warranty.

Basically, you must pay a specific portion of the repairs during each visit, while the warranty company may or may not cover the rest of the repair. While that may seem to cast the value of these car warranties into doubt they can be very beneficial especially in the case of big-ticket items failing.

Examples of this would be cracked engine blocks and failed transmissions. Also car air conditioning repairs are soaring. Most major components like the compressor, condenser, evaporator and receiver dryer are covered under many plans. If the a/c compressor fails total repairs could be over $2000 dollars. No one wants to drive without air conditioning.

I see major failures like these on both foreign and domestic cars and trucks all the time. In fact I would be out of a job if this was not a common occurrence. Regardless of the type of auto warranty in question they can be very beneficial.

There are very few cases in which a warranty is not a helpful thing. In some cases buying an extended warranty will require some thought before making the decision. Used vehicles are a different creature from new vehicles and different rules apply. My closing point for purchasing an extended auto warranty is to please shop around.

Buying at the time of purchase from the car dealer is often the most expensive way to go. Plus they hard sell it because the profit is so high for them. In most cases the coverage is no better than the cheaper options. You did homework when you picked out the car so use the same techniques to pick coverage for it.

I have worked at new car dealers for most of my 25 year career. With this much time invested you can’t help but learn a few tricks of the trade. Let me share some more stuff I learned about car buying. Next is the auto facts homepage. Learn about the car guy that built this website and what other topics are covered. This next link takes you from the extended auto warranty to more automotive answers.