A new car comes with several different warranties from the factory, each covering specific parts of your vehicle.
Basic Warranty - The specific terms established by each manufacturer (typically 3 years/36,000 miles for domestic and Asian vehicles and 4 years/50,000 miles for luxury cars) to repair vehicles for a specific time and/or mileage period. All factory installed parts and some dealer installed accessories are covered for defects and workmanship. Consumable items (tires, wiper blades, battery) are not covered under the basic warranty, although some of these parts may have their own warranty. Commonly called the "bumper-to-bumper" warranty, it is the most comprehensive of all new car warranties.
Powertrain Warranty - More and more manufacturers are offering powertrain warranties that last longer than the Basic Warranty. Coverage under this portion of a new car warranty begins after the Basic Warranty expires and normally consists of coverage for the engine, transmission and drive axles only. Be sure to check the specific components covered in the owner's manual. Some Powertrain Warranties will have a deductible and may not be transferable to subsequent owners.
Emissions Warranties - Federal Emissions Warranty guidelines are based on federal regulations and apply in all 50 states. California has adopted stricter Emissions Warranties and other states, including New York, Massachusetts and Connecticut, have adopted these tougher standards as well.
The Emissions Performance Warranty is for 2 years/24,000 miles. Certain parts (catalytic converter and electronic emissions controls (PCM) are covered for up to 8 years/80,000 miles. Please refer to your owner's manual for your exact Emissions Warranty.
Corrosion Warranty - Covers rust through perforation on sheet metal with actual holes. Surface corrosion from nicks, chips and scratches are not covered. Coverage may differ for inner and outer sheet metal panels. Please refer to your owner's manual for your exact Corrosion Warranty.
Extended warranties are also known as Vehicle Service Contracts and Mechanical Breakdown Insurance policies.
An extended warranty is a contract between you and a warranty company, dealer or manufacturer (Obligor), whereby the Obligor agrees to pay for specified repairs for a certain mileage and/or time frame. Better extended warranties will also cover you for "seals and gaskets" and "wear-and-tear" on items that wear out. When searching for coverage, please know that there are as many coverage types as there are vehicle models.
Exclusionary Warranties - Exclusionary warranties are commonly referred to as bumper-to-bumper warranties. According to the Federal Trade Commission, in order to be called a bumper-to-bumper coverage, it must only show a small list of items not covered; just like a new car warranty. If a plan lists parts that are covered, while it may be comprehensive, there may be hundreds of parts of your vehicle not covered. These Exclusionary warranties generally offer the highest level of coverage, and are most similar to the factory warranty.
Wrap Warranties - A specialized bumper-to-bumper coverage for vehicles with powertrain warranties that run longer than the factory bumper-to-bumper warranty. This eliminates the duplication of coverage of your powertrain and makes coverage more affordable.
Names Component Warranties - As the name implies, named component coverages will provide a list of parts that are covered. These types of warranties are also referred to as "inclusionary" plans. There are many levels of named component coverages available. They offer an excellent alternative for vehicles that may not qualify for bumper-to-bumper coverage or for those looking to cover the major systems of a vehicle only.
Powertrain Warranties - A Powertrain warranty is the most affordable car warranty available. It covers the engine, transmission and drive axles or about 25% of your vehicle. Typically designed for older, high mileage vehicles, it represents an excellent alternative for those looking for "major medical" coverage for any automobile.
Mechanical Breakdown Insurance Policies - Mechanical Breakdown Insurance (MBI) policies are offered to California residents. Policies are regulated and overseen by the California Department of Insurance (CDI). Companies offering MBI coverage in California must be licensed by the CDI.