When shopping for a new car, you will probably hear the salesperson mention factory warranties and extended car warranties. You are probably wondering what a car warranty is and how car warranties work? A car warranty is a contract between a warranty provider and a car owner that will cover certain costs associated with repairs on the vehicle. There are a few different types of auto warranties. The two main types of warranties are factory warranty and extended warranty. This article explains the difference between car warranties and how car warranties work.
The Difference Between a Factory Warranty and an Extended Warranty
When you purchase or lease a new vehicle, car manufacturers provide a factory warranty for the vehicle. This warranty will cover most major repairs with the vehicle over a certain period of time or kilometres. In comparison, an extended warranty is a contract that you can purchase once the factory warranty expires. When you buy a used car, you can also purchase an extended warranty to help offset costly repairs that could occur.
What Does a Factory Warranty Cover?
A factory warranty is also known as a manufacturer’s warranty and is included when you purchase or lease a new vehicle. This type of warranty guarantees that the auto manufacturer will cover the costs of any major repairs or mechanical issues. The factory warranty includes:
- A new vehicle limited warranty.
- Powertrain warranty.
- Other coverage such as corrosion and emissions warranty.
Also, it is common for factory warranties to include roadside assistance coverage. Here is a breakdown of the standard coverage included in factory/manufacturer warranties:
New Vehicle Limited Warranty/Bumper-to-Bumper
(3 years or 60,000km)
The bumper-to-bumper warranty is comprehensive coverage for almost all of your car’s electrical and mechanical parts. This warranty will protect you from most electrical and mechanical repairs in the first three years or 60,000km of owning the vehicle. This coverage does not include tires, brakes, or routine maintenance.
Powertrain Limited Warranty
(5 years or 100,000km)
The powertrain warranty covers all of the components that power the vehicle; this includes the engine, drive components, and transmission. The powertrain coverage is longer because the parts are manufactured to last longer than parts that the new vehicle warranty covers.
Corrosion Warranty
The corrosion warranty covers any rusting that can occur on the car’s body. However, keep in mind that this coverage does not include any damage caused by environmental factors.
Emissions Warranty
(Required by the federal government)
The emissions warranty protects all the emission-related components.
What Does an Extended Warranty Cover?
If you purchase a used vehicle or if your vehicle’s factory warranty expires, you can buy an extended warranty. An extended warranty acts as a protection plan to help cover unexpected repairs. You can purchase an extended warranty from an automotive manufacturer or a third-party warranty provider. An extended warranty will have similar coverage to the factory warranty that the vehicle would have had when it was brand new.
Although you do not have to purchase an extended warranty, it is always a good idea to consider one. Extended warranties will protect you from costly repairs and includes roadside assistance and rental car reimbursement.
What Voids a Car Warranty?
You can void your car’s factory or extended warranty by not keeping up with routine maintenance and servicing, off-roading, installing aftermarket parts, and using the wrong fluids in your vehicle.
How Do Car Warranties Work With Electric Vehicles?
With more consumers considering purchasing or leasing an electric vehicle (EV) or plug-in hybrid (PHEV), you may wonder how car warranties work with these types of vehicles. Even though EVs require less servicing and maintenance, it is still important to understand how car warranties protect you against potentially costly repairs.
Electric vehicles have a large and expensive battery that powers the vehicle. Therefore, following proper charging practices is essential to prolong the life and health of your EV’s battery. Automotive makers have special powertrain warranties that protect your vehicle’s battery. The standard warranty for EV battery warranties is eight years or 160,000km.
Learn more about how to charge your EV or PHEV at home here.
Best Extended Warranties in Canada
All OEM/automotive manufacturers provide factory warranties on all new vehicles. Factory warranties include a new vehicle limited warranty, powertrain warranty, corrosion warranty, emissions warranty, and roadside assistance. If you purchase a used car or your factory warranty has expired, you can buy an extended warranty from an OEM or an independent warranty provider.
Here is a list of some of the best independent extended warranty providers in Canada:
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