Coverage is built into the car ownership experience. Aside from car insurance, for sure you’ve heard the terms manufacturer’s warranty, or factory warranty, as well as extended warranty, or extended auto warranty a number of times. If you’re still a bit fuzzy on the details, we’ve outlined the basic similarities and differences below.
The Basic Premise
The manufacturer’s warranty and the extended warranty share the same basic concept: They are written promises, by the manufacturer or by a third party, to repair or replace defective/damaged components of your vehicle.
A car warranty is a reassurance play. It aims to give you, the vehicle owner, peace of mind that if something goes wrong with your car, especially if it’s new, it will be fixed. For example, with a basic manufacturer’s warranty, you can bring your car to an authorized garage or dealership to get the repair done for free.
An extended warranty normally kicks in after the manufacturer’s warranty that comes with a brand-new car expires.
Limitations
Beyond the basic premise, there’s the matter of limitations. All car warranties have them. For starters, warranties don’t cover all repairs, nor do they last forever.
Here are the most common limitations in both types of car warranties:
Scope
Not all parts will be covered. Car warranties come with inclusions and exclusions; the scope affects overall coverage. Comprehensive warranties offer bumper-to-bumper coverage. Meanwhile, standard powertrain warranties cover only the most important parts—drivetrain, engine, and transmission.
Length
All warranties have expiration dates. The limits for both manufacturer’s and extended car warranties are based on length and mileage. A manufacturer’s warranty typically lasts three years, or 36,000 miles, whichever comes first, after which your vehicle is out of coverage.
Issues
A single vehicle can encounter a host of problems depending on a host of factors (weather, maintenance, manner of use, etc.). To avoid coverage for every little issue that comes up (especially those brought on by customization), car warranties specify which issues and causes will be covered. Typically, a manufacturer’s warranty will cover only issues brought on by manufacturing and material defects.
Head to Head: Manufacturer’s Warranty vs. Extended Warranty
Knowing the differences between manufacturer’s warranty and extended warranty is key to making well-considered decisions to ensure your vehicle is covered at all times.
Here are the 5 major differences to keep in mind:
1. Provider
The only provider for a manufacturer’s warranty is the manufacturer—who promises to address any defects or mistakes made at the factory.
Extended warranties can come from the manufacturer, as well as third-party providers, who are, ideally, backed by an A-rated insurance company or the manufacturer.
2. Coverage variety
Manufacturer’s warranties typically have bumper-to-bumper and powertrain warranties, along with a few variations like seat restraint coverage.
Extended warranties, third-party plans in particular, tend to offer more variety in terms of coverage and limits, making it easier to personalize extended warranty coverage according to the specific vehicle and its needs.
3. Scope variety
A manufacturer’s warranty isn’t likely to cover repair or routine service unless it’s a factory defect.
On the other hand, extended warranties offer more coverage options. You can choose a plan that covers accidents, upgrades, or routine work.
4. Restrictions
You’re likely to encounter more restrictions regarding when and where to get issues fixed if you’re covered by manufacturer’s warranty. You will be expected to go only to a mechanic who has been approved by the manufacturer.
While a factory extended warranty comes with similar restrictions, third-party providers typically offer more wiggle room when it comes to mechanics, dealerships, and garages.
5. Price
The truth is that a manufacturer’s warranty actually costs you—only, that cost is hidden inside the final cost of the vehicle. You can pay for it with a loan or with cash, just like a car. An extended warranty has separate costs to be paid subscription-style, either yearly or sometimes monthly, throughout the warranty’s life span.
Key takeaway: An extended warranty generally offers better coverage, but then again, note that unless you don’t take good care of your brand-new car, it will not likely bother you with necessary repairs. If you’re buying a used car, then it’s best to buy the extended warranty upon purchase since used cars don’t come with a manufacturer’s warranty, unless you buy one that’s still covered by the original warranty.
If your vehicle will be out of warranty soon, start looking for a vehicle service contract that will address all your needs.
At EverCare, expect nothing but superior protection products, robust benefits, and innovative technology that guarantee satisfaction and peace of mind.
Contact us today for a consultation.