There are many categories and subcategories of aftermarket automobile warranty companies. Some pertain only to newer, lesser-used vehicles with low mileage while others are available for vehicles in the mid to high-mileage range that are a few years older. It is important to read a warranty carefully to insure knowledge of inclusion or exclusion of coverage based on the specific type.
Basic Automobile Warranty
This type of coverage is also known as the manufacturer’s warranty. This is available for newer cars in order to cover the normal wear and tear that typically happens within the first several years of ownership. Basic warranties typically do not cover tire or battery replacement.
Dealership Automobile Warranty
This type of warranty is sold by the dealership rather than the manufacturer and comes with certain stipulations such as where one may take his or her vehicle to be repaired in the event of an accident or malfunctioning part.
Extended Automobile Warranty
The extended warranty can be broken up into three subcategories or types of coverage.
1. Bumper to bumper. Bumper to bumper is considered the highest form of coverage also called luxury, new car, or full coverage. It is also called exclusionary coverage because it is covers so many parts of the vehicle that the only parts listed in the policy are the parts not covered, thus excluded. This type of coverage is used typically for newer cars with mileage below 50,000 or 60,000.
2. State Component Coverage
State component coverage is also called inclusionary coverage because it lists only the parts actually covered in the policy. Although this type of warranty covers less than bumper to bumper warranties, it still covers most parts of the vehicle. This type is typically for vehicles in the mid-mileage range or 50,000 to 100,000 miles.
Powertrain coverage is a basic type of warranty. It covers the engine, transmission, and drive axles. This is used for high mileage vehicles and larger, more expensive repairs.
Rust and Corrosion Warranty
This type of coverage is used in the event that a vehicle rusts. However, the damage is typically only covered if the rust eats a hole through the metal.
This type of coverage is a completely different type separate from the others. It is used specifically in provision of emissions problems up to a certain number of years or miles. This may be covered under a different type of warranty so it is always important to read a policy carefully to ensure not over paying or over coverage.
The important thing to remember is that a vehicle is an investment and is likely to be the second biggest investment most Americans make in their life time, second to real estate. Therefore, it is imperative to carefully read the fine print within the warranty contract. The cost of vehicle repair is going up. Even if something seems like a good deal, that does not mean that the company is entirely trustworthy. Studying up on warranty companies and reading their reviews is a simple, allbeit time-consuming way to avoid being taken in or losing money on your vehicle investment.