How vehicle warranties work

| Mar 22, 2021 | Lemon Law |

One of the benefits of buying a new motor vehicle and a newer used one is that it likely comes with a warranty. This provides peace of mind for those who do not want to continue to pay money on repairs and replacements after spending a lot to purchase the vehicle. A contract between the owner and the warrantor, the initial warranty (also known as vehicle service agreements) usually runs three years or 60,000 miles. Yet, these can be (and often are) extended for longer periods and more miles using an extended auto warranty. There are also implied warranties protected by lemon laws.

These warranties or service agreements generally require the owner to follow a service schedule to maintain the coverage. Common examples include:

  • Changing oil
  • Changing filters
  • System checks
  • Rotating tires
  • Using recommended fuel

These and other maintenance items are in the contract as well as in the owner’s manual. There may also be specific requirements for doing repairs, such as a dealership or within a specific network.

There are different warranties

It is important to remember that no warranty coverers everything. The most comprehensive is called bumper to bumper, but less expensive plans will slowly strip coverage of things like cooling systems or electronic components. Payment of the extended warranty typically involves a combination of deposit, monthly payments and a deductible. The warranty may also require the owner to pay for repairs initially and then be reimbursed by the warrantor.

Those who buy extended warranties must typically wait at least 30 days or driving the auto 1,000 miles before having warranty work done. This gap helps ensure that the owners do not buy the extended warranty after they found a problem.

What about scams and unfair practices?

There are many reputable warrantors, but some prey on those who buy a car. Buyers should research before giving money or credit information to these companies. Like insurance companies, some legitimate businesses will still dispute that an issue is under warranty. Therefore, it is essential to follow the contract rules and then hold the warranty company accountable if they try to avoid honoring the agreement.