Why Paying for Manufacturer Warranty Cost Is Not Enough

If you’re buying a new car, you can trust that the salesman is going to take you to a financing office. In order to protect your investment, you will likely be offered an extended warranty on your vehicle. This can be confusing, especially if you thought paying for the manufacturer warranty cost would be enough. But it’s not enough, and there are some key differences between a manufacturer’s warranty and an extended warranty.

Manufacturer’s Warranty

The manufacturer’s warranty is provided by the car’s maker or dealership. However, different car manufacturers offer different warranties. Many brands like Hyundai, Kia, and Mitsubishi offer extended warranties for new cars—from six to ten years to 60,000 miles. Some warranties even extend to 100,000 miles.
The manufacturer’s warranty is included in the price of your car. It covers major items such as the engine, transmission, and drivetrain. However, most common brands don’t offer long warranties on new cars because they feel their brands hold more value than the warranty. Toyota, Mazda, Subaru, and Honda offer bumper-to-bumper warranties of three years and 36,000 miles, respectively. For powertrain coverage, they offer five years and 60,000 miles.

Extended Warranty

An extended warranty also known as a contract for service can be purchased anytime, regardless of when your car is bought. You can purchase an extended warranty from the dealer before you bring your car home. An extended warranty on your car is recommended before the manufacturer’s warranty expires.
These warranties may come with an annual premium or a deductible, and you might not use them all the time. An extended warranty purchased through a third-party company is usually cheaper and more flexible than the one you were offered when you purchased your car.

Steps When Choosing an Extended Car Warranty

1. Get to know the brand. Find out how often cars of a brand break down. This can be done online or through friends and family who have had experience with the brand. Find out how customers resolved issues with their cars and what other people think about the service provided by the dealership after they have purchased. To make an informed decision, visit your state government consumer protection.

2. Find out what is covered. The warranty provided by your manufacturer covers certain items for a specific time. You should know the details of your extended warranty and when it kicks in if you buy one. Windshield wipers, oil changes, and brake pad replacement aren’t usually covered. Extended car warranty companies often offer better coverage.

3. Choose your coverage level. Many dealerships offer warranties at different levels to encourage you to buy an extended warranty. Make sure to read the fine print before you buy the warranty you have in mind. You should understand your deductibles. If you are required to pay upfront and then get reimbursed for the cost, this can be very frustrating and costly. You can choose what you want to be covered, with the most popular options being basic (bumper-to-bumper), powertrain/drivetrain, roadside assistance, rust corrosion, emissions, and battery.

4. Make sure you are aware of your insurance coverage. You can compare the costs to determine which option is most affordable for you.

5. You can purchase an extended warranty for your vehicle at any time. If you decide to buy an extended car warranty at a later time, the purchase will not be included in your new car payment or in the manufacturer warranty cost. Extended car warranties can almost always be negotiated. Talk to your representative about what you need and they will work with you to agree on a price.

Lisa Thompson: Lisa is a mechanic with over 20 years of experience. Her blog is filled with practical maintenance tips, DIY tutorials, and advice on keeping your vehicle in top condition.