Understanding Auto Warranties: A Comprehensive Guide

What is an Auto Warranty?

An auto warranty is essentially a contract between the vehicle purchaser and the manufacturer or seller. Like any contract, auto warranties can be complex and filled with legalese, making it challenging to grasp the various aspects of your coverage. For instance, standard new-car warranties today can be 30 to 50 pages long, filled with numerous subsections and clauses. Unless you're a contract lawyer, you might find these documents intimidating and hard to understand.

Common Types of Auto Warranties

Despite the complexity, most new and used car warranties are quite similar and contain many common points. Here is a detailed overview of the most common warranty types and the essential points you need to understand about each.

Basic Warranty

New cars typically come with several warranties, the first of which is the basic warranty. This warranty covers most major systems and parts of your car. In the United States, the basic warranty for most cars is limited to three years or 36,000 miles. However, there are exceptions, such as Hyundai and Kia, which offer a five-year basic warranty.

What It Covers:

• Electronics
• Interior parts and details
• Rims
• Ignition components

What It Doesn't Cover:

• Tires
• Certain interior parts like carpeting and mats

Powertrain Warranty

The powertrain warranty, also known as the drivetrain warranty, covers the larger mechanical aspects of the car. These include the engine, transmission, differential, axles, and drive shaft. Powertrain warranties generally last longer than basic warranties, often up to 10 years.

What It Covers:

• Engine
• Transmission
• Differential
• Axles
• Drive shaft

What It Doesn't Cover:

• Smaller and electronic-based parts

Adjustment Warranty

New cars also come with an adjustment warranty, a basic warranty between the purchaser and the car dealership. This warranty covers most parts and systems within the car but is usually only in effect for 30 days.

What It Covers:

• Most parts and systems within the car

What It Doesn't Cover:

• Anything beyond 30 days (or 60-90 days in rare cases)

Interesting Stats and Facts

• Average Warranty Length: The average length of a new car warranty in the U.S. is around 3 years or 36,000 miles. However, some manufacturers like Hyundai and Kia offer warranties up to 5 years or 60,000 miles (source).
• Powertrain Warranty: Powertrain warranties can last up to 10 years, but they often don't cover the parts most likely to fail, such as electronics (source).
• Cost of Repairs: According to AAA, the average annual cost of car repairs is around $500, making warranties a valuable consideration for many buyers (source).

Conclusion

Understanding the different types of auto warranties can help you make an informed decision when purchasing a vehicle. While the legal jargon can be daunting, knowing the basics of what each warranty covers and doesn't cover can save you from unexpected expenses down the road. Always read the fine print and consult with a knowledgeable source if you have any questions.

By familiarizing yourself with the common types of auto warranties, you can navigate the complexities and make a more informed decision when buying a new or used car.