The fine art of understanding automobile warranties, including finding your way through the fine print, extended warranties, car corrosion, car emissions and extended service plans.
A warranty is your contract with the manufacturer of your car—through its representative, the dealer—that any defects will be corrected at the manufacturer's expense.
PHOTO: FOTOLIA/TATIANA BELOVA
Against that time (if ever that time come)
When I shall see thee frown on my defects,
When as thy love hath cast his utmost sum,
Call'd to that audit by advis'd respects;
Against that time when thou shah strangely pass,
And scarcely greet me with that sun, thine eye,
When love converted from the thing it was
Shall reasons find of settled gravity:
Against that time do I insconce me here
Within the knowledge of mine own desert,
And this my hand against myself uprear,
To guard the lawful reasons on thy part.
To leave poor me thou hast the strength of laws,
Since why to love I can allege no cause.
Like falling in love, picking out a new car isn't a completely rational act. Dewy eyes take over, and before we know it we're rolling along in bliss. Only after the deals are sealed do the realities—be they uncapped toothpaste tubes or frozen transmissions—show themselves.
A warranty is your contract with the manufacturer of your car—through its representative, the dealer—that any defects will be corrected at the manufacturer's expense. Sadly, a thorough reading of automobile warranties prior to purchase is just about as rare as a well thought-out prenuptial agreement. And like marriages, not all automobile warranties are created equal.
All major manufacturers in the U.S. offer at least a 12-month basic warranty on new cars, during which time the entire car (save the tires, which are warranted by their manufacturer) is covered against defects in materials or workmanship. However, most of these plans are tied to a 12,000-mile, "whichever comes first" clause that may significantly shorten the actual warranty period.
Most mechanical problems occur as a function of the number of miles driven—but not all of them. For example, a busy driver who buys new wheels in the fall might roll right through the warranty mileage before ever turning on the air conditioner. For that reason, be sure to get at least a 12-month, unlimited-mileage air conditioner warranty.
Some other things to look for in the wording of a basic warranty include provisions to cover the cost of towing, the date the warranty takes effect (important if you buy a demonstrator), warranty extensions and prorations on certain components such as batteries, and whether remanufactured (rather than new) parts may be used.
Several manufacturers offer basic warranties longer than 12 months, some of which also allow unlimited mileage during the period. Remember, these are distinct from "powertrain warranties" or extended service contracts. Rather than limiting coverage to a few driveline components and charging deductible amounts, the long-term basic warranty keeps an umbrella over your head for most failures. Components—such as an alternator, starter, battery or carburetor—are much more likely to fail in the early years than is an engine crankshaft or a transmission, the sorts of parts covered by power train warranties. A 24- or 36-month basic warranty could end up saving you hundreds of dollars in repairs.
Most warranties cover only defects, so parts that are expected to wear—such as brake linings, clutches, wiper blades and belts-are excluded from coverage. However, during the basic warranty's effect, a good dealer will remedy just about any problem without charge. Few people would consider brake linings that disappear in 12,000 miles as having failed through normal wear. Bear in mind, though, that misuse—such as pulling a trailer with a vehicle not set up for such duty—or lack of specified maintenance may void the warranty. All is not cut-and-dried: Though maintenance doesn't have to be done by a dealer, you may be asked to present documentation of proper care.
Many buyers shop for the best new car price, assuming that warranty coverage is a given. Not so. As legal-sounding as many warranties read, the "except if' clauses (such as wear and abuse) can make their interpretation pretty hazy. Ultimately, you're at the mercy of the dealer's good will. The difference between a cooperative and an uncooperative dealer can cost you hundreds of repair dollars, even if you don't have a major failure. For example, one Volkswagen dealer in the MOTHER EARTH NEWS area declined to repair an air-conditioning system or replace worn brake linings under the company's 24-month, unlimited-mileage warranty, claiming the items weren't covered; another dealer cheerfully did the work—at no charge. What's more, beyond honoring the terms of a warranty, an accommodating dealer may even make repairs after the official agreement has expired. Some warranty documents actually mention this possibility.
Since the early 1980s, many manufacturers have offered power-train warranties that begin at the end of the initial, basic warranty period. In this war of nerves, the U.S. Big Three have turned warranties from boilerplate no one paid much attention to into powerful buyer incentives—parleying promises into improved reputations for reliability. Recently, Chrysler upped the bid to seven years on some models, and Ford and GM have followed suit with six-year offerings.
To know how these warranties compare, once again you must read the fine print. Only selected components are covered (typically, the engine block, transmission and differential and their internal parts), there is usually a deductible amount, and the warranty may or may not be transferable to subsequent owners. To give a few examples, some extended warranties cover engine mounts, the fuel pump, timing gears, flywheels, ring gears and valve trains; others don't specifically mention these parts. That lack of specific mention can cost you $30 per hour, plus parts. Only a few companies offer powertrain warranties that cover the entire price of the repair; generally, you pay the first $100 for each visit.
Most extended warranties are transferable, but few go beyond the second owner, and most charge $100 for the transfer. Befitting the complexity of modern cars, extended warranties are beginning to appear for other sorts of components. Chrysler has lengthened its coverage of computerized engine controls on many of its models to 36 months/36,000 miles, and offers 50-month/ 50,000-mile coverage on the auxiliary mechanical systems of a few of its higherticket cars. GM includes a 36-month/ 36,000-mile warranty for certain electronics and parts of the cooling, air-conditioning, steering, suspension and brake systems on some of its upscale models. Ford has extended the warranty of its safety restraint systems to 36 months/unlimited mileage.
All major manufacturers now warrant the bodies of their cars against perforation by corrosion. The length of rust warranties varies—six years or 100,000 miles isn't uncommon—but there is one important point made in all of them. Except during the term of the basic warranty, surface corrosion—that which doesn't make a hole through a piece of metal—isn't covered. Quite a few also exclude damage caused by "industrial fallout"—probably a legacy of acid rain. Before you close a new car deal, the salesperson will probably ask if you'd like to have a rust-preventive treatment added to your pride and joy. Whatever the effectiveness of undercoatings may be in preventing rust, no factory corrosion warranty requires that you buy such a package. Before you plunk down extra cash for corrosion protection, find out if you're already getting essentially the same coverage for free.
As a result of the Clean Air Act, the Environmental Protection Agency requires that new cars meet specific emission standards and maintain them for five years or 50,000 miles. Emission warranties aren't necessary reading for shoppers, since the requirements are equal for all. (In fact, the wording in the manuals for different manufacturers is practically identical.) Once you buy a car, though, you should familiarize yourself with the protection offered by the emissions warranty.
Particularly if you live in a state with an emissions-testing program, you may be able to have parts of the fuel, electrical, exhaust and emissions systems repaired free of charge.
Salespeople frequently encourage buyers to purchase extended service contracts—as distinguished from no-extra-cost factory warranties—with their new cars. Essentially, these sticker add-ons are insurance policies that extend protection beyond the time limits of, and may cover items not included in, the factory warranty. Some are offered by the manufacturers; others are provided by independent agencies. They add from $200 to more than $1,000 to the price of the car.
The language of many extended service contracts makes that of factory warranties look like material for a grade-school reader. You may not be inclined to study the contract in detail, since you're anxious to finish the paperwork and get behind the wheel, but (such as piston rings or valves), that there's a $100 deductible per visit and that you're required to have the car serviced at the dealer's facility (which probably charges more than an independent). A service contract may be worthwhile, particularly on a car that's known (or proves) to be unreliable, but you should think of it as insurance. You're gambling that the cost of repairs covered by the policy will be greater than the up-front cost of the package.
Some state laws hold that car manufacturers have what is called an "implied warranty of merchantability" that extends beyond the written warranty period. This means that a car should safe and reasonably trouble-free transportation. If your car fails to provide such service and you're unable to get satisfaction from the dealer or the manufacturer's representative, you can sue in small claims court or with an attorney.
In addition, though all manufacturers exclude incidental or consequential damages—anything from lodging expenses to loss of job if your car breaks down on the road—from warranty coverage, some states don't allow such exclusions. You may be entitled to compensation under your state's laws.
Never before have automobile warranties—expressed or implied—offered the consumer so much protection. Studying warranty provisions should be a part of prudent car shopping, and familiarity with the coverage should be a part of smart ownership. Manufacturers have made sincere efforts to make the fine print more understandable; we just need to set passion aside for a few minutes and read.
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