The Five Most Important Aspects of a Car Warranty

Posted November 26, 2016

Even though most new cars come with standard warranties attached with the purchase, many people buying or even contemplating buying a new car end up having to figure out if they should purchase an extended warranty (also known as a “service contract”), and should take a variety of factors into account when making this decision, such as how many miles they plan to put on the car, how long they plan to own it, how much the insurance costs, etc.

Regardless of what the dealership tells you, when it comes to figuring out if you actually need an extended warranty, it’s best to look into it carefully rather than make a decision that you have to get out of later. To that end, there are some key, important elements of any new car warranty that should be looked at closely, such as:

What’s covered?

Does the warranty not only cover the engine, driveline, transmission, etc., but also any parts that wear out, such as batteries or brakes? Many people feel that they will also be covered for parts with an extended warranty that goes beyond their standard warranty, but that’s not usually the case. The general rule is: if it isn’t specifically listed in the warranty or extended warranty, it isn’t covered. It is also important to note that the warranty provider may try to deny coverage for something that is covered if it is damaged by something that is not covered.

For How Long?

It’s common sense that as the car gets older, the more likely it’s going to need a little help. You may have only purchased the extended warranty because you knew this time would eventually come. But what does the standard warranty period already cover? And, by purchasing an extended warranty, are you necessarily covered for the period of time when you’ll need the assistance?

Who Can Do Maintenance Work And Repairs?

It is also important to note that, in the original warranty, if certain repair work is enumerated as being entirely covered under the warranty, the dealer may specify where these repairs can be done, but they cannot do so for routine work. However, if anything is done incorrectly by the mechanic of your choice and this causes damage to the car, the manufacturer or dealer can deny payment if they demonstrate that that particular work done by that mechanic is what caused the overall damage.

What about Deductibles?

Many people do not realize that just because you purchased an extended warranty in addition to the standard warranty, does not mean that everything is now covered/free. After-market service contracts can include deductible payments (in addition to your monthly premium). And in addition, sometimes there is a separate deductible that applies to each separate repair (versus a single visit that covers multiple repairs), and this can make a significant difference when it comes to paying out-of-pocket.

What About Selling the Car?

It is important to note that while extended warranties may be transferable to a second buyer, basic warranty coverage often is not.

Circumstances That Void Extended Warranties

Some of the circumstances that can void an extended warranty include misusing the equipment, a pre-existing condition, negligence, and the failure to properly maintain the equipment. However, remember that you do not have to purchase an extended warranty from the same dealership or manufacturer—you can purchase it at a later date from a different company instead—so be sure to read the fine print and shop around when it comes to policy exemptions.

Bad Faith Claims Regarding Extended Warranties

When it comes to companies declaring extended warranties to be void in bad faith, a common excuse that is used is that there was a pre-existing condition. Keep in mind that it is the company’s burden to bring forth evidence of this pre-existing condition. In addition, when it comes to car warranties, there have been reports of the warranties themselves being disingenuous or fraudulent. For example, any warranty that is so limited in an unapparent way until it is too late for the consumers to actually take advantage of it could be alleged to be fraudulent.

Automobile Extended Warranty Attorneys

If you choose to purchase an extended warranty, your provider must deal with you in good faith, just like any other type of insurance. If they refuse to honor the warranty, schedule a free consultation with us to learn how our bad faith insurance attorneys can help. When it comes to helping the insured obtain what they are due, we are ready to fight aggressively. Contact us today.