Worrying About the Warranty? Protection Against Costly Repairs Is Key to Your Car Budget

by Jerry Edgerton

It looks good. It drives great. And, especially important these days, it gets good gas mileage. You're about ready to buy this car, but have you looked at the warranty? What repairs are covered and for how long in your warranty could well determine if you'll wind up happy that you bought that vehicle.

New car warranties range from the traditional three years or 36,000 miles to a few brands that extend coverage of the so-called drivetrain--engine, transmission, and driveshaft--to 10 years or 100,000 miles. For some car buyers, a long warranty will be crucial; for others it will matter little. To see where you fit, ask yourself two questions:

1. How long will I own the car? If you trade cars often, you don't care much about 10-year warranties. If you like to drive vehicles just as long as you can, you will care a lot.

2. How many miles do you drive a year? Remember, expiration of time/mileage warranties is whichever comes first. So if you plan to keep a car for three years but drive 20,000 miles a year, a typical three-year or 36,000-mile warranty won't keep you covered.

Long or short, almost all warranties have some things in common. The "bumper-to-bumper" coverage in the basic warranty will pay to repair or replace almost any part that breaks. But there are exceptions. Tires and batteries are not covered. And neither are items that involve routine maintenance or are likely to wear out during the warranty period: windshield wipers, oil filters, and brake pads. Some warranties end all coverage after the basic warranty is over. Others end bumper-to-bumper coverage but will still pay for drivetrain (also known as power train) repairs for an extended period. The power train coverage has some exceptions, too, for example parts attached to the engine that regularly wear out such as hoses and belts.

If you plan to keep your car for long enough that the warranty matters, watch these issues:

Look for a good drivetrain deal.

The protection you really care about is against those big, budget-busting repairs. "Power train warranties cover the most expensive jobs like transmission replacement that can run $2,000 or more," points out Philip Reed, consumer advice editor of automotive Web site Edmunds.com and co-author of Edmunds' book "Strategies for Smart Car Buyers." Three large-volume auto companies--General Motors Corp., Ford Motor Co., and Honda--all offer just the three-year or 36,000-mile warranties on their basic brands with no drivetrain extension. DaimlerChrysler's Chrysler and Dodge vehicles have a similar period for bumper-to-bumper coverage but extend the drivetrain warranty to seven years or 70,000 miles. After a three-year basic warranty, Toyota has a drivetrain extension to five years or 60,000 miles. Most luxury brands (BMW, Mercedes-Benz, and including GM's Cadillac and Ford's Lincoln) have a slightly longer four years or 50,000 miles for all coverage. And Korean makers Hyundai and Kia, who have made a selling point of their long warranties, offer five years or 60,000 miles on bumper-to-bumper coverage and 10 years or 100,000 miles on the power train. To see a list of warranty coverage by brand, go to Edmund's Auto Warranty Tips.

Additionally, sites such as Edmunds and Kelley Blue Book will show you the warranty coverage for any specific model.

Look for reliability.

In judging among competing models, you care not only what repairs are covered but how likely they are to be needed. Consumer Reports' annual survey rates the likelihood of problems with specific components for specific models for the previous eight years. These ratings appear in the April issue, often available in libraries or online if you're a subscriber. These details are worth a look since they may or may not match your image of the brands. Most Honda and Toyota models--as they have for many years--continue to rank well. But Hyundai--which initially adopted the long warranty to combat skepticism about its cars' reliability--has shown improvement for models less than two years old.

Remember the rust coverage.

If you pay attention, this warranty provision protects you not only against rusted-through body panels but also unnecessary add-on charges at the dealership. This coverage often extends longer than the basic warranty. (Ford, for example, has a three-year or 36,000-mile warranty, but rust coverage runs for five years or unlimited mileage.) So if dealership employees try to sell you additional rustproofing, just say no. The dealer rust treatment might even lessen the built-in corrosion protection.

Check out the roadside assistance.

Some new-car warranties include a service that not only will tow you if your car breaks down but send assistance if you run out of gas or lock yourself out of the car. While your warranty is in effect, you may be able to avoid the expense of an auto club that provides similar service. Talk to the dealer and read your warranty carefully so you know the details of your coverage before you might need it out alongside the interstate.

Consider an extended warranty.

The new-car dealership probably will try to sell you an extended warranty that takes over when your original warranty expires. Don't rush into this. You may not need it if you believe you can cover repairs out of savings. But if your new car has a three-year warranty while you hope to keep it five or six years--and if you hate budget surprises--you might consider it.

If an extended warranty does appeal to you, look for one backed by the manufacturer, which will pay the dealer directly for repair work. But check to make sure you can get repairs at any dealership of that brand where you might have problems--not just the dealership where you bought the car. And don't take the dealership's word for the price of that extended warranty. This is a high-markup item that you can negotiate just as you did the price of the car. Be sure to read Take a Hard Look at Extended Warranties for more information.

If you are like most shoppers, you are going to look for the car you like--not the most winning warranty. But in an era when budgeting for trips to the gas pump is becoming a family issue, being sure that you are protected against unexpected mechanical repairs is more important than ever.

Jerry Edgerton is an automotive writer whose work has appeared in Money and other national magazines. He also is the author of the book "Car Shopping Made Easy."

Published November 7, 2005

Printed Sunday, May 26, 2013

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