Automobile Warranties and Other Buyer Protections

Most new vehicles come with some type of warranty protection. This means the dealership or manufacturer covers the repair costs of a vehicle defect or malfunction. Warranty coverage is for a limited amount of time or odometer mileage, such as five years or 50,000 miles.

Warranty terms and coverages vary, and the contracts can be difficult to understand. If you purchased a new vehicle under warranty, you'll want to understand your consumer protections so you don't get stuck with an expensive repair.

This article will help you learn:

• The language used in an auto warranty
• What to do if a dealer or manufacturer denies your warranty claim
• Pitfalls to avoid with car extended warranties and service contracts
• How the law protects your consumer rights as a car buyer

Read on to learn what you need to know about car warranties.

Types of Automobile Warranties

Warranty documents have a language of their own. Informed consumers understand the different components of a warranty and what they cover.

You may see several types of warranties in your new car warranty contracts. The most common types of auto warranties include:

• Factory Warranty (or manufacturer's warranty) is the standard warranty the manufacturer provides. It covers defects in materials and workmanship for a specific period or mileage.
• Powertrain Warranty covers the engine, transmission, and other components of the powertrain. It is often included in the factory warranty.
• Bumper-to-Bumper Warranty covers all vehicle components. It includes parts including the axles, struts, spindles, air conditioning compressor, and bumpers.
• Corrosion Warranty covers damage caused by corrosion, like rust.
• Emissions Warranty maintains air quality standards as required by law, covering the catalytic converter and oxygen sensor.
• Restraint Systems Warranty covers the vehicle's seatbelts and airbags. Some restraint systems warranties cover the lifetime of the vehicle.
• Roadside Assistance Warranty covers towing, flat tire changes, lockout services, and more.

The warranties above are express warranties. This means they're written or stated guarantees the vehicle will meet a certain level of quality and reliability. If the vehicle does not meet these standards, the manufacturer will repair the vehicle at no charge.

While often grouped with original factory warranties, an extended car warranty is more like a service contract than an actual warranty. It's an optional service or maintenance contract you can buy to cover repairs when the manufacturer's warranty ends. The provider and coverage of an extended warranty differs from a manufacturer's warranty.

How comprehensive the factory warranty is can be a deciding factor for many car buyers. Research the factory warranties for different vehicles to make an informed choice.

Car Warranty Coverage

Car warranties don't cover normal wear and tear or routine maintenance. Even a warranty with comprehensive coverage like bumper-to-bumper will only cover costs for mechanical breakdowns or malfunctions.

For example, most new car warranties cover the repair if your fuel pump or transmission goes out. They also typically cover issues with a vehicle's engine block, pistons, or driveshafts. Expect to pay out of pocket for routine maintenance like oil changes and tire rotations.

If your vehicle needs service for a covered repair, most factory warranties will even cover rental car reimbursement.

Maximize your warranty coverage by:

• Keeping detailed records of maintenance and repairs
• Addressing any potential issues or malfunctions right away
• Avoiding aftermarket modifications, as these may affect your coverage or even void your warranty

Warranties don't cover don't cover vehicle damage from accidents, weather, or vandalism. You will want comprehensive auto insurance to cover these unexpected events.

Clarify any limitations and exclusions that may apply to the different types of warranties with the dealership. Ask about mileage limits, maintenance requirements, and exclusions.

Warranties for Used Vehicles

It is more common for dealerships to offer an optional service contract for used cars, rather than a manufacturer's warranty. These may cover vehicle repairs and replacements for parts and labor. You may find they aren't as comprehensive as a new car manufacturer's warranty.

The Federal Trade Commission (FTC) requires used car sellers to post a Buyer's Guide on every used vehicle for sale. The Buyer's Guide includes warranty information, including whether the vehicle comes with a dealer warranty or is being sold as is. Buying a vehicle in as-is condition means it comes with no warranty and any repairs are your responsibility.

Some used cars may come with a remaining manufacturer's warranty or a certified pre-owned (CPO) warranty. This can provide additional peace of mind for buyers. Even if you buy a used vehicle with time or mileage left on its original factory warranty, the dealership may try to sell you an extended warranty or service contract.

If you purchase a new car, ask about warranty transfer rules. Some warranties are transferrable to the next owner, which is an attractive selling point when you're ready to sell.

Service Contracts and Extended Vehicle Warranties

A vehicle service contract, also called an extended warranty or a car shield warranty, is an optional add-on car buyers can purchase to provide protection beyond the manufacturer's warranty. These contracts may cover repairs and replacements for parts and labor but aren't as robust as the original manufacturer's warranty.

Because vehicle service contracts are often called extended warranties, consumers can mistake them for an actual warranty. In reality, service contracts are more like a car insurance policy, often including a deductible. There are a few different service contract and extended warranty providers:

• Dealership and manufacturers
• Third-party extended warranty companies (like Carchex)
• Insurance companies

If you decide to buy an extended warranty, be sure you understand what components, systems, and repairs it covers. Ask about limitations, exclusions, and the cancellation policy. If you purchase through a third-party provider, research reviews to ensure they are reputable and provide reliable service contracts.

Avoiding Extended Warranty Scams

Beware of extended warranty scams. Scammers contact car owners and claim their auto warranty is expiring and can offer continued protection. They often create a sense of urgency and attempt to get consumers to provide their credit card information over the phone or via email. They may pose as a representative of the dealership, manufacturer, or third-party provider.

Pay attention to the following signs of fraudulent activity:

• Claiming you have very limited time before your warranty expires
• Asking for personal financial information or your social security number
• Using scare tactics to try and rush you into making a decision

You can report suspected fraud to the Federal Trade Commission (FTC).

Warranty Claims Denials

First, review your warranty terms. Ensure the fix is a covered repair and your vehicle is still within the warranty coverage's time period or mileage. If the provider refuses to cover the repair or reimburse the fix, they will issue a denial letter stating the reason for the claim denial.

Keep in mind that federal law prohibits manufacturers or dealers from requiring car owners to use an authorized repair shop or use only approved parts. You have the right to choose your mechanic and use aftermarket parts. As long as any repairs or parts don't damage your vehicle, your provider cannot void your warranty for this alone.

If you believe the denial reason is unfair or incorrect, you may be able to appeal the decision. Contact the dealership or manufacturer to request an appeal and provide additional documentation. Include any diagnostic codes or detailed reports from reputable mechanics that support your claim. It's a good idea to keep records of all repairs and routine maintenance.

If your claim is still denied, you can file a complaint with your state's consumer affairs agency or attorney general. You can also contact a consumer protection attorney for further legal options.

To avoid future problems, don't use your vehicle in a way that is not recommended, like racing or skipping routine maintenance. This can void your warranty.

Auto Warranties and Recalls: Resources and Information

Use the links below to learn more about automobile warranties and car buyer protections.

• Dealer Used Car Sales and Warranties: Warranty options and protections for used car buyers
• Secret Warranties, Recalls, and Lemons: More options if you have a problem with your motor vehicle
• Consumer Protection Agencies Directory: Find your state's consumer affairs agency or attorney general's office
• Legal Guide to Consumer Transactions: FAQ and information on defective products, returns, and more
• Vehicle Service Bulletins: National Highway Traffic Safety Administration (NHTSA)
• Reporting Fraud, Scams, and Bad Business—Federal Trade Commission (FTC)

Need More Help With a Car Warranty? Talk to an Attorney

Most car owners can resolve a warranty issue with the car dealer without legal help. There are situations where you may want to contact an attorney. For example, if a car manufacturer or dealership denies your warranty claim without a valid reason or misrepresents the terms of a warranty, it might be time for legal help.

An experienced attorney can help you understand your legal options, and pursue a remedy for your car repairs. Contact a consumer protection attorney in your area to learn how they can help resolve your warranty or vehicle repair dispute.