Warranties: A basic breakdown

Understanding a vehicle's warranty is one of the most important aspects of the car buying process. It also happens to be one of the most misunderstood. We're here to give you a basic warranty breakdown, which will help you make a more educated buying decision.

The first thing to understand about warranties is that new cars and used cars have different warranties. Used cars tend to carry fewer warranties than new cars, but their terms can be just as confusing. 

Let's start with new car warranties. All new cars come with warranties, ranging from those that are very inclusive to those that cover only specific parts. 

Here's a list of four of the most common warranties you're likely to encounter when buying a new car:

-Bumper-to-bumper warranty: Also known as a basic warranty, this policy covers parts such as air conditioning, fuel systems and major electrical parts. Bumper-to-bumper warranties often last for five years and/or 60,000 miles. Bumper-to-bumper warranties usually expire faster than powertrain warranties.

-Powertrain warranty: Powertrain warranties are more mechanic than bumper-to-bumper warranties. They usually cover the engine and transmission, along with any parts connected to the wheels like the driveshaft. They often last for 10 years and/or up to 100,000 miles. However, don't take this to mean you get a decade worth of free repairs; powertrain warranties usually don't cover routine maintenance like engine tune-ups or tire rotations.

-Extended-length warranty: This a supplemental contract offered by most dealers at the time of purchase. Policies vary depending on the automaker; entry-level policies may only cover the engine and transmission, while a more advanced package may have a similar coverage policy to a bumper-to-bumper warranty.

-Roadside assistance warranty: This type of warranty covers common breakdowns like flat-tire changes and jump starts This is sometimes included in bumper-to-bumper and powertrain warranties, and sometimes it's a separate policy.

Now that you have a basic understanding of new car warranties, it's time to understand warranties on used cars. 

Here's a list of four of the most common warranties you're likely to encounter when  buying a used car:

-Basic used warranty: Depending on the state, most dealers or private sellers are allowed to sell a used car "as is" without a warranty. Dealers often provide a minimal warranty as an incentive to sell used cars. For example, they'll offer to pay a percentage of the repairs for a set period of time or mileage after you buy the car.

-Extended-length warranty: Also known as service contracts, these types of policies are sold by automakers or third parties. They protect used-car buyers from future breakdowns, sometimes up to 100,000 miles. Policies vary; some cover only serious repairs, while others cover everything besides routine maintenance.

-Certified pre-owned warranty: Considered a balance between the original bumper-to-bumper and powertrain warranties, this type of policy usually includes more coverage for extra appeal. They usually include longer powertrain coverage, and some have bumper-to-bumper policies that cover most parts for a set period of time. Almost all certified pre-owned cars provide roadside assistance.

-Implied warranty: Implied warranties are required in states where it's illegal to sell used-cars as is. In such states, dealers are only allowed to sell cars that can reasonably be considered a motor vehicle; this just means it has to run. This type of warranty holds the seller liable if a mechanic can prove that whatever damage there is on the car was there at the time of purchase.

Negotiating a warranty is one of the most important aspects of the car buying process. Arming yourself with at least a basic knowledge of warranties will help you make a more educated buying decision and prevent financial misunderstandings down the road.

To compare manufacturer warranties and for more information on both new and used car warranties, visit the "Buying Advice" section of www.cars.com

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