Warranties

The warranties that come with your new vehicle are probably comprehensive enough to make extra-cost coverage a waste of money. A factory warranty is the manufacturer's pledge to absorb certain repair or replacement costs until a specified period of time elapses or the car has accumulated a stated number of miles--whichever comes first. The limitation is expressed as number of years/number of miles, the most common being 3 years/36,000 miles. Here's an overview of how manufacturers' warranties work and what they generally cover.

Manufacturer New-Vehicle Warranties
The Basic Warranty is "bumper-to-bumper" coverage for the entire car. It generally excludes tires and the battery, which are warranted by their manufacturers.

Warranties are generally described as "limited," which affirms that they don't cover everything that might go wrong with the vehicle. Most basic warranties exclude:

• Normal wear and maintenance items (oil, filters, brake linings).
• Damage from the environment (hail, floods, 'acts of God').
• Damage from improper maintenance, such as use of incorrect fuel.
• Damage caused by the owner or vehicle occupants.

Several manufacturers include free scheduled maintenance that covers routine work such as oil changes, wiper-blade replacement, and other items. Some maintenance coverage lasts for the duration of the basic warranty, but others are for a shorter period.

A separate Extended Powertrain Warranty that extends beyond the basic warranty is offered by quite a few manufacturers. This applies to major components such as the engine, transmission, and driveshafts. A 2004 Strategic Vision survey found that most buyers of Korean-made vehicles cited the warranty as the main reason for their decision.

Also extending beyond the basic warranty is a Corrosion Warranty that covers "perforation" rust. Several manufacturers include Free Roadside Assistance that offers on-the-road help. Most Corrosion Warranties and some Roadside Assistance coverage is for a stated number of years, but with no limit on mileage.

If the original factory warranty has not expired when the vehicle is sold, the warranty may be transferred to the new owner, either at no charge or for a fee. Specific second-owner exclusions may apply to leased and fleet vehicles.

The federal government requires two other warranties. The Exhaust Emission Warranty covers corrosion-related parts for 2 years/24,000 miles, plus 8 years/80,000 miles on the catalytic converter and any on-board diagnostic device. These warranties cover emissions performance (whether or not the car is able to pass an emission test) as well as design and defect issues. The Passenger Restraint Warranty covers seat belts and airbags for 5 years/50,000 miles.

Service Contracts
Service contracts, also known as extended warranties, are actually insurance policies--not real warranties. In 2002, according to Automotive News, more than 28 percent of new-vehicle buyers also purchased a service contract, but they are often unnecessary and may be loaded with loopholes.

Service Contracts are sold at dealerships as part of the vehicle transaction, and they typically earn a commission for each sale. Many contracts are underwritten by independent agents, but most manufacturers also offer extended warranties--sometimes a bewildering array of them, at various prices.

These extra-cost contracts usually extend coverage of the car's powertrain and other major components beyond the duration of the manufacturer's warranty. If you don't plan to keep your vehicle for longer than the original warranty, you won't need additional coverage. So, don't pay extra for it.

Service contracts are rarely a good value for the money. They range in price from several hundred dollars to $2000 or more, depending on the vehicle and the length of coverage. You could often come out ahead by placing the same amount of money into a savings account or investment for the duration of the manufacturer's warranty. Still, having extra coverage eases the mind of many buyers who worry about unforeseen problems as the vehicle ages.

If you feel you will benefit more from the perceived peace-of-mind that a service contract affords, negotiate its price with the dealer. You can also shop around for a contract after the purchase, to find one at a lower cost. As new-car profit margins have declined in recent years, dealers have come to rely more and more on extra income from financing and service contracts.

Be careful, however. With most policies, it's the underwriter who determines which items will be covered, and that list may not be as complete as the factory's coverage. Some policies require that all work be approved beforehand, and you will usually have to pay a deductible of $25 to $100 per repair or service visit.

Many independent service-contract firms have gone bankrupt in recent years, leaving both the dealers and customers stranded. A contract issued by the vehicle manufacturer may be more reliable, as the automaker is more likely to remain in business.

Take the time to scrutinize any service contract at home, as it is not usually necessary to make a decision on the day of purchase. Most extended warranties may be purchased later.

If you do decide to buy one, be sure to get a copy of the actual contract. A pamphlet about the coverage may not tell the whole story.

Model-Year 2007 Manufacturers' Warranties

Model-Year 2006 Manufacturers' Warranties

Model-Year 2005 Manufacturers' Warranties

Model-Year 2004 Manufacturers' Warranties