Car warranty guide: what you need to know

What is a car warranty?

Put simply, a car warranty is a contract between you and the warranty issuer in which it agrees to cover the cost of certain repairs. Issuers can be car manufacturers, like Ford or Toyota, that want customers to feel secure in their purchases or third-party warranty providers that offer coverage to complement or extend factory warranties.

Repair bills commonly range anywhere from a few hundred to a few thousand dollars, so having a good warranty can protect your savings and provide peace of mind. Fortunately, new cars come with factory warranties that last for at least three years or 36,000 miles from the date of purchase — whichever comes first.

» LEARN: Car warranty vs. car insurance

What do car warranties cover?

As a general rule, warranties only cover parts that fail on their own. The official language in a warranty agreement often refers to covering “defects in design or workmanship,” and this essentially translates to “breakdowns that aren’t your fault.”

Things get more complicated when you start looking at specific coverages, though. Different types of warranties cover different things, and the exact terms of a warranty can vary from contract to contract. We can’t explain the terms of every single warranty agreement here, but we can give you the basics of what the different types of warranties cover.

Types of warranties

Here’s a breakdown of the most common types of car warranty coverage you’ll see on the market today.

You may see these types of coverage in the following categories:

New car warranties, also known as factory or manufacturer warranties, come with most new cars and some certified pre-owned (CPO) cars. A manufacturer’s warranty is typically broken down into bumper-to-bumper, powertrain and anti-corrosion coverage. However, it can also include a separate warranty for accessories.

Certified pre-owned warranties are short warranties that some manufacturers include with the sale of their CPO cars. Lexus, for example, includes a two-year/unlimited-mile bumper-to-bumper warranty with its CPO vehicles that can stack onto the vehicle’s existing factory warranty.

Extended warranties, also called vehicle service contracts, are generally designed to “extend” your factory warranty past its original expiration date. For example, if the original bumper-to-bumper warranty on your Audi expires after four years or 50,000 miles, you might consider purchasing an extended warranty to last through your ownership (say, eight years or 100,000 miles) so you’re not on the hook for luxury car repair bills, which tend to be more expensive than repairs on cheaper vehicles.

Extended warranties aren’t always an extension of your factory warranty, though. Some extended warranties offer so-called wrap coverage that coexists with and complements an existing warranty.

» MORE: What does a car warranty cover?

What don’t car warranties cover?

Because car warranties are generally designed to cover parts that fail on their own due to poor design, manufacturing mistakes or improper fit, they won’t cover breakdowns resulting from damage, abuse or neglect, including:

• Damage caused by a road accident, bad weather, vandalism or animals
• Malfunctions resulting from missed maintenance, especially oil changes
• Problems that occur after off-roading or racing, unless otherwise stated in the warranty terms
• Otherwise-covered parts that fail as a result of aftermarket modifications, such as a lift kit damaging your suspension

So, if the warranty issuer peers at your maintenance records and sees that you haven’t changed the oil in 30,000 miles, it may deny your claim to fix the engine. Similarly, if you blow a head gasket at the racetrack, the issuer will likely deny your claim for repair.

“The consumer should take time to review what is or is not covered by the auto warranty,” said Allison Harrison, a lawyer with ALH Law Group in Columbus, Ohio.

“Usually when purchasing a warranty or service contract, there is a one- or two-page form that outlines the basics of what is covered, what is not and how long the coverage is for,” she said. “It is important to look at what is covered.”

It’s worth mentioning that warranties also typically don’t cover:

• Routine maintenance, like oil changes and tire rotations
• Normal wear-and-tear items, such as tires, brakes and lightbulbs (tires may come with their own separate OEM warranty, though)
• Cosmetics, such as interior trim and upholstery
• Excessive road noise or vibrations, unless they can be traced back to a manufacturer defect
• Preexisting issues (for extended warranties)
• Any part or system listed under “exclusions” in your warranty agreement

An inspection can help you prove your issue didn’t exist before coverage started.

Consumers are often surprised to have warranty claims denied due to the issue being preexisting. However, there’s an easy way to avoid this in many cases.

Harrison advised drivers to “have the vehicle inspected at a reputable shop prior to buying the coverage. … Then, if the company attempts to deny coverage, you have proof that the issue was not preexisting.”

Even with brand-new vehicles, the line between what’s covered and what’s not covered under warranty can be blurry and subject to a conversation with your claims officer. For example, when the owner of a 2022 Toyota GR86 totaled his engine during a track-day event, he successfully argued with Toyota that taking such a track-focused vehicle to the track should constitute normal use. The company (eventually) agreed and covered his $11,000 engine repair.

How a car warranty works

When you’re looking to get a repair done under warranty, it’s never too soon to call your warranty provider and ask how to proceed. In most cases, you’ll be instructed to:

1. Take your car to the nearest licensed mechanic.
2. Get a diagnosis and a quote for the repair.
3. Call your warranty company back so it can authorize the repair.

Still, we recommend calling first because some warranty companies have a specific list of approved repair centers. Some manufacturers may even require you to take your car back to the dealership where it was first purchased — especially if the repair requires specialized parts and labor.

Car warranty vs. extended car warranty

As we mentioned earlier, extended car warranties can extend or complement your factory warranty, but there are a few key differences:

• Extended warranties can be issued by the OEM or a third party, but factory warranties are always issued by the OEM. For example, as the three-year/36,000-mile factory warranty on your Mazda CX-5 nears expiration, you might consider Mazda’s Platinum Vehicle Service Agreement or a warranty from a third-party provider.
• You have to pay for an extended warranty, while factory warranties come with your vehicle purchase. (The cost of a factory warranty is likely factored into your vehicle’s price tag, though, which makes it difficult to compare with the cost of an extended warranty.)
• Extended warranties can have deductibles ranging from $0 to $500, but factory warranties don’t have deductibles.
• Extended warranties can stretch up to 300,000 miles, which makes them good for high-mileage vehicles. The longest factory bumper-to-bumper warranty on 2023 vehicles ends after five years or 60,000 miles.
• Extended car warranties can be more convenient. Third-party vehicle service contracts are highly customizable and often have a longer list of approved repair centers than factory warranties.

If you’re interested in purchasing an extended warranty, just be sure to avoid scams and choose the right warranty for your needs. Extended warranty companies don’t have the established reputations that major automakers do, so it can be difficult to navigate the third-party warranty market without some help.