New and Used Car Warranty – Types of Warranty

Almost all new car warranties come as a package: A general (bumper-to-bumper) auto warranty and a powertrain warranty. This often covers a longer time period than the general warranty. There are available separate auto warranties for rust corrosion, emissions systems, restraint system, tires and battery. The owner's manual for your new car will tell you everything about the coverage and the limitations.

General warranties are typically available for three years or 36,000 miles. These cover just about everything on the vehicle that is left uncovered by another car warranty. They normally don't cover wear and tear items and other items that are listed in the exclusion clause. Since all the manufacturers' auto warranties are different, one should be smart enough to look into the fine print and read the owner's manual properly.

You can also talk to the dealer to ask about your coverage.

Powertrain warranties on new cars, on the other hand, are for longer periods like 5-years or 60,000 miles. These auto warranties cover the engine, transmission and transaxle and drive system, etc. Keep in mind that these are parts related to getting power from the engine to the drive wheels. Again, the auto warranty coverage varies by manufacturer. You need to remember that after the general bumper-to-bumper motor warranty expires, the powertrain auto warranty comes into effect. Though this covers only a relatively small portion of the vehicle.

An extended car warranty is especially important if you are planning to lease a car for a term that exceeds the number of months in the car's bumper-to-bumper general car warranty coverage.

If you know where to shop, you can go to sites like WarrantyDirect.com, Autobytel.com, Autoweb.com, CarSmart.com, Autos.yahoo.com, eBay.com and Edmunds.com, etc. and get related information about the companies.

You might even want to go to WarrantyDirect.com and get an offer that is cheaper. But residents of California are now banned from signing up for car warranty offers online, as per a new law in the state.

Extended Warranty Deductible – 100 or 0?

A deductible is an out-of-pocket amount paid by the customer at the time of a covered repair. Deductibles range from $50 - $200 or more. Whether the deductible is charged per repair or per visit can make a big difference.

Many companies offering extended car warranty contracts offer a variety of service plans with deductibles from $0 to $100. It is better for you to read through all the plans and decide the right one for you.

There is a big difference between paying a $50 deductible on each covered item versus a $50 deductible per repair visit. If your new car already has a lot of miles, ask for a zero-deductible option. This might be offered by some websites for $75. Frequently, you can save a lot of money by giving up some of the extras like car rentals and by going for a higher deductible such as $100.

If your extended warranty stipulates a $100 deductible per repair, then you would need to shell out $300 for repairs if your car needs repair three times! With a $100 deductible per visit, you pay $100 no matter how many things they find to repair in a single visit. This is the better option.