Car Buying

What is a limited warranty on a new car?

What does it cover, and for how long? That depends

This is part of a series breaking down all the terms you need to know if you're buying a new or used car from a dealership. Check out the rest of the series at our Car Buyer's Glossary.

Regardless of whether it's a low-cost economy pick such as the Chevrolet Sonic or an ultra-luxe performance vehicle such as a Mercedes-AMG C63, a car is one of the biggest purchases a person will ever make. In attempts to instill confidence during that difficult process, manufacturers offer warranties that theoretically back up the quality of the product. These promises are framed in various ways, including basic, bumper-to-bumper, powertrain, federal emission controls, rust or perforation, and hybrid or electric vehicle components, among others.

A warranty is written guarantee that describes how the manufacturer will repair or replace defective parts, with some limitations – hence the term "limited warranty". Generally, it limits the length of coverage, what is covered, and who can use the warranty.

Certain warranty details are required by law. The Magnuson-Moss Warranty Act passed by Congress in 1975 requires a written warranty for a consumer product be labeled as full or limited. From auto manufacturers, all warranties are written, and limited warranties are predominant. Full coverage would assume too much risk and financially protects the manufacturer.

There are three main components to a limited warranty: what it covers, how long it lasts, and what is required to qualify for the warranty. Certain manufacturers stipulate that all maintenance must be done at the dealership in order to qualify for the warranty.

Using Kia as an example, its cars are advertised to come with the famous 10-year/100,000-mile warranty – which consists of several limited warranties. It includes a limited basic warranty, a limited powertrain warranty, and a limited anti-perforation warranty. The basic warranty is limited to five years or 60,000 miles, whichever comes first, and only covers certain defects. The powertrain warranty is limited to 10 years or 100,000 miles, whichever comes first, and only applies to certain failures in the powertrain. The perforation warranty is limited to 5 years or 100,000 miles, whichever comes first, and only applies to certain types of corrosion damage.

Federal law requires that the warranty be written clearly, in plain language. Dealers must show you the warranty, which is generally in a booklet included with the packet of owner's manuals in the glovebox. As you read through it, you'll notice that the warranty language clearly sets out what's covered by each limited sub-warranty. For example, the engine portion of the powertrain limited warranty will list the parts covered: cylinder block and head, internal parts, various gaskets, etc. If it's on the list, and the part fails during normal use while the warranty is active, it should be covered.

As to who can use the warranty, you will have to check the language to make sure that each limited sub-warranty is transferable to subsequent owners. Many are fully transferable, but in the example with Kia's powertrain warranty, it is (at the time of this writing) not transferable. Transferability is generally set out in the general warranty provisions in the warranty booklet.

The key message here is that each warranty is different from the next, depending on the manufacturer and the vehicle. Do not assume that because one car covers something that the next will cover the same. Each instance has its individual limitations, so research is necessary to fully understand what you are getting with your purchase. Read through the warranty provisions, which are thankfully relatively straightforward. And no question is too silly or too detailed to ask a sales person.

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