Complete Car Warranty Guide (2022)

Automobile warranties of all kinds provide valuable protection to vehicle owners. But even with the most reputable warranty providers, there are still things to look out for. Most warranty plans include important disclaimers and exceptions in the fine print.

Waiting time

It’s common for an auto warranty to come with a waiting period, especially if it’s an extended warranty. This period, which is usually around 30 days and comes with a minimum mileage, exists to prevent people from using warranty coverage on pre-existing issues. During this period, you will not be able to use your coverage.

Coverage period

Vehicle maintenance contracts come with terms that define the length of coverage available. This is usually defined by both mileage and age, for example 3 years/36,000 miles. Coverage generally ends on the first occurrence.

Exclusions and Limitations

Even so-called bumper-to-bumper warranties come with limitations and exclusions. Here are some of the most common:

  • Wear Items: Most warranties do not cover items that need to be replaced regularly, such as brake pads and bulbs.
  • Repairs resulting from misuse: Automobile warranties are intended to protect your vehicle during regular use. If you use your vehicle in a way that is not recommended by its manufacturer – such as towing something outside of its capability – your supplier may deny your warranty claim.
  • Damage following a car accident: Repairs required due to collisions are the responsibility of you or your auto insurance company, depending on your policy. This means that you cannot use your warranty to repair items damaged in an accident, even if you do not have adequate insurance coverage. The same goes for things like vandalism and flooding.
  • Pre-existing damage: When you sign your warranty contract, you agree not to use the coverage to repair existing damage. Even if you exceed the waiting period, you are technically not entitled to have pre-existing problems repaired under your warranty coverage.

Eligibility for coverage

Not all vehicles are eligible for warranty coverage. Many providers place age and mileage limits on their coverage plans, and cars that do not meet these limits are not eligible. This means that it can be difficult to find a used car warranty on an older, higher mileage vehicle.

Additionally, some providers will not cover high-end luxury or exotic vehicles due to high repair costs. However, some warranty companies offer specialized plans for older or more expensive vehicles.

Cancelation

It’s not uncommon for people to decide they don’t want their car warranty after all. Most providers allow you to cancel coverage and get a full or prorated refund, depending on how long you have it. Suppliers have different cancellation policies, so check your warranty agreement to find out how.

Transferability

Many VSCs are transferable – they follow the car, not the driver. So, if you want to sell your car, the new owner can benefit from the protection plan you purchased.

Having a warranty can increase the value of your used car when you sell it. While it’s common for car warranties to be transferable, many providers charge a small fee to do so. Your warranty contract will outline the requirements to transfer your coverage.

Scams

Unfortunately, the warranty industry has been plagued by phone and email scams in recent years. The Federal Communications Commission (FCC) warned consumers that scammers call people and pretend to represent warranty companies. These callers request personal information that can be used to steal someone’s identity or commit other types of fraud.

These scams have influenced consumer opinion even on the most reputable extended car warranty companies. To protect yourself, do not give information to anyone calling you. If you want to buy coverage, find the phone number or website of the provider you want to reach. Even if the caller who reaches you is perfectly legitimate, you have nothing to lose by hanging up and calling the phone number you found.

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