Warranties: Peace of mind or piece of scrap paper?
One of the great lures of buying a showroom new car rather than, say, a late-model used car (which is almost always an economically superior decision), is that if anything goes wrong with your new car, for a period of time you know you’re 100% covered, almost. I have found that people sometimes tremble at the thought of buying a two-year-old car with 20,000 miles on it and discovering hidden problems. Never mind that with all the new computer services you can trace the history of any car, or that “rolling back the odometer” is not only impossible but a death penalty offense in five southern states – they want that new-car security blanket, and will pay a huge premium to get it.
New car warranties used to be all over the map, but now at least the basic coverage is fairly consistent. I believe all the major manufacturers currently have 3-year, 36,000-mile bumper-to-bumper coverage. That means that if anything breaks or wears out (except the tires, which are covered by the tire manufacturer), you’re covered for the repair, the towing, and even a rental car in some cases. After that things can get confusing and not so certain. For instance, the federal government mandates a certain warranty on all emission parts and – believe me – that includes anything that makes the car run or affects the running of the car. But that’s for only 2 years or 24,000 miles, which is less than the basic warranty coverage. Thanks for nothing. Other emission parts such as the catalytic converter are warrantied for up to 8 years and 80,000 miles.
Then there are powertrain warranties. Typically these warranties will cover an engine or transmission failure for an extended period (7 years or 70,000 miles seems typical). These warranties will help you a lot if you suffer a catastrophic engine or transmission failure. Yeah, you’ll pay at least a couple hundred bucks before it’s through (ignore the $50 or $100 deductible, there are always extras), but it is still better than the $3-$4,000 you would spend otherwise.
Then there are “aftermarket warranties”. These are warranties often sold at used car dealers. Although they can be purchased independent of a dealer. These warranties can often be a real mixed bag, often providing impressive coverage on long lists of parts that don’t break but not being terribly useful on the stuff that does break. If you choose to go this route be sure you are getting a warranty from a very reputable company. Anyone can open a warranty company online. I had the misfortune of working with a customer whose extended warranty company vaporized before our eyes as soon as they found out he had a bullet proof claim they could not reasonably deny.
The large insurance company that is represented by a small lizard sells a lot of warranties and by and large they honor their warranties. However this does not mean they pay 100% of most claims. More often the customer (you) pay a substantial amount out of pocket no matter what representations were made at the time the warranty was sold. The other drawback is that the warranty adds a substantial amount of down time to your car. After the car is diagnosed a claim must be initiated. The estimate must be provided in the exact format the warranty company wants. Often there are long hold times on the phone and faxes back and forth before a claim is approved, adding a half to full day to the down time. And forget about weekends!
In my opinion if you are a person of means who can pay a couple thousand dollars out of pocket without having to go through gyrations, better to keep the couple thousand dollars a good warranty costs and have that money working for you somewhere else. But if budgets are calculated to the last penny, you may want that added security blanket and get the warranty after doing your due diligence. If you do have an extended warranty, we at Wiygul Automotive Clinic will work with your warranty company to get you back on the road as quick as possible. Our repairs are warrantied for 3 years or 30,000 miles, and we are here in flesh and blood to honor them.