Making Sense of Vehicle Warranties

An original manufacturer’s warranty is a non-negotiable feature of a new motor vehicle. Its provisions are established in advance by the car company and you can only get the original warranty the manufacturer attaches to the particular vehicle you buy. But not every original warranty is equal.

“There are even differences in the warranties offered by the same company,” explains Joyce Nolan, director of warranty operations for General Motors Service and Parts Operations. For example, vehicles sold by GM’s Chevrolet Division typically come with a warranty that covers three years or 36,000 miles, whichever comes first, she said. But GM’s Cadillac Division backs its vehicles for four years or 50,000 miles.

The 2006 Hummer H2's warranty covers three years or 36,000 miles.

Warranty comparisons can begin online. Nolan notes that GM divisions post warranty summaries on their brand websites. Other manufacturer sites provide warranty information as well, but the data varies in depth and detail.

On Hummer’s site one of the categories on the H2 model page is a “Details” section from which you can find a warranty information page that summarizes the four-year/50,000-mile coverage on the big SUV. You learn that the Hummer’s coverage includes tires, towing to a dealership and repair of “cosmetic corrosion resulting from defects.” From BMW’s vehicle pages, such as the one for the 2006 BMW 650i, you can navigate to a “Warranty & Services” page that provides a summary of the car’s four-year/50,000-mile policy. The “Features & Specs” section for the A6 Avant station wagon on the Audi site gives you only two lines regarding the car’s warranty: it’s good for four years or 50,000 miles and it comes with 12-year coverage against rust holes.

To get all the details, you have to approach dealers. “It’s important to ask questions at your dealership,” says Nolan. “Dealerships know the warranties.” 

One important area to investigate is exclusions, says the executive. Those are specific components and repairs not covered. Also, if you expect to sell or trade a vehicle within its warranty period, you should find out if the warranty is transferable to a second owner, since that can increase the car’s value when you cash it in. Some warranties are fully transferable, while some require a fee. Others, particularly high-mileage warranties, are not transferable, notes Nolan.

Finally, she advises, make sure you understand what specific responsibilities a warranty places on you after you take title to a vehicle.

Under warranty programs, manufacturers pay their franchised dealers to perform eligible repairs. But that’s not a substitute for fundamental vehicle reliability, which remains your best assurance against the inconvenience you suffer when your car fails. You can assess reliability by reputation. You can make inferences from warranties. But other, more objective measures are also available. Subscribers to Consumer Reports Online can find new-vehicle reliability estimates on the magazine's website. You can learn about recalls for specific models — an indicator of quality — on the Vehicle Safety Recalls section of the ForbesAutos.com and cars.com co-branded site. Another clue comes from the IntelliChoice ranking of luxury-car ownership costs, which also point toward reliability.

Probably the most objective means to measure a model’s reliability is to probe the used-car market, where prices offer you a consensus summary of auto longevity. Automotive Lease Guide (ALG) estimates vehicle residual values — the price a new car is expected to command when it sells as a used car a few years down the road. You can look for cars that command higher residuals, an indication of which models are in greater demand on the used-car market in the Best Car Resale Values by Class section on the ForbesAutos.com and cars.com co-branded site . One big reason for their popularity is that, on average, they prove to be more trouble-free.

Similarly, articles in the “Car Buying 101” section on the IntelliChoice site tell you vehicles with the highest retained value, and the lowest depreciations.

Only a few vehicle warranties entice you with excessively long coverage periods. Most original warranties apply when repairs are less likely, during early ownership. After that, as accumulating miles make car problems more common, you need a so-called extended warranty if you want relief from repair bills.

Published on 12/02/05