Car buyers purchase auto warranties for many reasons, including a sensible desire for auto coverage, pressure from the dealership, or outright lies told to convince them that extended or additional coverage is mandatory. While auto warranties are important and can offer protection when it is most needed, many available warranties are unnecessary. Some include long lists of exclusions that may not be obvious, others provide cover only during specific periods of time or for a set number of miles, and still others may provide little or no protection at all for the vehicle being purchased.

Customers often fail to fully read their contract or pay attention to the fine print it contains. Many are unable to understand their coverage options and exclusions, and either choose not to ask for an explanation, or are not given a proper one at the dealership. These issues can lead to wrongly filed claims with the warranty company, as well as significant and unexpected expenses in the event that the vehicle becomes damaged or needs work.


It is crucial for all car buyers to fully read and understand every aspect of all warranties they are considering. It is also important to remember that dealers are often given incentives to pressure customers into purchasing unnecessary or overpriced warranties. Some warranties are worth the extra money, but others are not worth the coverage that they provide. Below is an overview of various auto warranty types and the coverage they offer.

Basic Warranty:

A basic warranty, or “bumper-to-bumper” warranty, provides cover for everything on the vehicle, except for wear-and-tear items such as brakes, tires, oil filters, and wiper blades. Most car manufactures offer protection for a minimum of three years and 36,000 miles – whichever comes first. Basic warranties are fairly standard, but customers should still read over every aspect of the warranty before signing.

Drivetrain Warranty:

This type of warranty, also called a powertrain warranty, covers all the major vehicle components, such as the engine, transmission, and drive shaft. The drivetrain does not cover general wear-and-tear items, hoses, or belts, but focuses on internal engine parts only. Most manufacturers offer a minimum of three years or 36,000 miles of cover, but increasing numbers of auto makers are extending their drivetrain warranties to provide coverage for as long as ten years and 100,000 miles. As with the basic warranty, it is essential to carefully read the fine print included in the drivetrain warranty, and make note of any hidden exclusions or other areas of concern.

Extended Warranty:

Some dealers try to force extended warranties on customers, and some even claim they are required in order to receive bank financing for an auto loan. Extended warranties are often very expensive and completely unnecessary. However, if the vehicle will be kept longer than the period of time the basic warranty provides coverage for, an extended warranty may pay for itself over time. Eventually, even the best vehicles will need repair work done, and those costs can quickly add up. It is typically better to buy the warranty directly from the warranty company, and not from the dealer when purchasing a car.

Before an extended warranty is purchased, several questions should be asked about the policy and coverage. If the warranty is being purchased at the dealership, it is important to determine if the plan can be used elsewhere, or if repairs must be performed at that specific dealership. Does the warranty cover the cost of repairs upfront, or will there be a need to pay out-of-pocket and wait for reimbursement? Is a vehicle inspection required before any repairs are made? Additionally, customers should ask their warranty provider if they offer a buy-back clause that allows a sum of money to be returned if the vehicle is sold before the warranty expires. Purchasing an extended warranty should be done cautiously. Research should be conducted on any companies that are being considered as coverage providers.

Rust and Corrosion Warranty:

This type of warranty protects against body damage caused by rust or corrosion. Unfortunately, these warranties typically do not cover surface rust. This means that the problem must be long-term and severe before the warranty kicks in. If a customer is interested in repairing the problem before this point, or wishes to take preventative measures to protect their vehicle against this type of damage, a rust and corrosion warranty will not provide cover. Keeping a vehicle clean, dry, and waxed is often the only protection a vehicle needs against rust.

Roadside Assistance:

While this type of coverage comes in handy, it is also provided with many auto insurance policies. Having both forms of protection does not necessarily mean better coverage. Before agreeing to pay for this type of warranty, a call should be made to confirm that the auto insurance policy does not also offer this protection.

Luxury Auto Warranty:

Luxury auto warranties go by many different names, but the cover is basically the same. This warranty protects luxury components, such as DVD players, GPS navigation systems, phones, and other expensive equipment. Many customers are lured into purchasing this very expensive warranty for fear of having to replace one of these items should it become stolen or damaged. However, unless a vehicle is stocked with numerous expensive electronic components, repairing or replacing these items is often cheaper than the cost of the warranty.

Extended and additional warranties can provide a car buyer with peace-of-mind, but often the coverage they offer is not worth the expense. Customers should take an active role in their car buying experience, ask questions, and demand complete answers. Just like a new car, warranties should be researched before they are purchased.