Trillium Automobile Dealers Association

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As new-car quality improves, so do their warranties

Created on Friday, 03 September 2010

In our industry, competition drives innovation and quality, which leads to better-built automobiles. It also leads to better warranty protection across the board, which is a big plus for consumers.

In the past decade, new-vehicle warranties have been steadily improving, and manufacturers often promote these improvements in their marketing and advertising. "Best Drivetrain Coverage" or "Standard Coverage Sets Benchmark in Basic Coverage" are two examples of assertions made by automakers.

Today, a standard new-car warranty (often referred to as basic, limited or bumper-to-bumper protection) on passenger vehicles and light trucks is three years and a least 60,000 km (whichever comes first). Some manufacturers offer four- and five-year warranties of 100,000 km or more.

Standard or basic protection covers mechanical deficiencies that occur during normal use. Excluded items consist of consumables and wear items, such a filters, fluids, brake friction materials, wiper blades, belts, hoses and tires. These items are outside the manufacturer's basic new-car warranty and aren't covered. Batteries and tires may carry a separate guarantee that is pro-rated based on usage.

Vehicle abuse, lack of maintenance and acts of God are also not covered under standard warranties.

In addition to the standard or basic warranty, major components are often assigned separate coverage. For instance, powertrain, emission systems, surface corrosion, rust protection, accessories and audio components often have their own protection packages.

During the sales process, the sales associate or business manager may offer customers optional extended-warranty protection. This may include a service contract that covers routine maintenance items in addition to the major vehicle components, after the standard warranty ends.

Consumers should examine their driving habits carefully and calculate the anticipated kilometers on the vehicle during the length of ownership. Optional warranty protection may make perfect sense, due to the growing tendency for people to retain their vehicles longer.

This optional coverage can be purchased directly from your dealer. These policies may be purchased during the initial sales process or after delivery.

Optional warranty protection is also available on pre-owned vehicles sold at new-car dealerships. Most dealers offer pre-owned programs that include some type of optional extended warranty protection, over and above the un-expired standard new-vehicle protection.

Typically, the more kilometers a pre-owned vehicle has on it, the higher the cost of this coverage. For budgeting purposes, the cost of an extended warranty on a new or pre-owned vehicle can be blended into the financing costs, making it part of a monthly payment.

Consumers may wonder if warranties are transferable. Whether you purchase a pre-owned vehicle from a registered dealer or privately, if the vehicle is still covered under the manufacturer's basic warranty (within time and distance parameters), then it is transferable to the new owner. Consult the owner's manual for further details

With extended warranties on pre-owned vehicles, some warranties are transferable and others are not. It's advisable to refer to the warranty agreement for any used vehicle you are interested in buying.

Are there instances when a dealership or manufacturer may deny a customer's warranty coverage, within the warranty period?

Yes. If it can be demonstrated that an owner neglected a serious mechanical problem or routine maintenance, or that they replaced OEM parts with aftermarket and/or performance parts, it could, in certain cases, void a warranty claim.

That's why recommended maintenance is so important. Avoiding regular maintenance could affect a warranty and will almost certainly impair the performance and resale value of a vehicle.

Go back to Cohen Editorials 2010 »

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