Warranties are typically a promise to pay a repair facility to replace or fix a covered part and/or component that has failed or worn beyond the auto manufacturer's tolerances.  Warranties differ from insurance.

Auto insurance, however, is a policy where by one party is agreeing to pay for another party’s losses in the case of an accident.  Insurance not only covers the cost of any damage to the vehicles as a result of an accident, but it also covers medical treatment for the drivers and passengers in both your car and other cars involved.  Auto insurance may also cover expenses due to theft.

Why are warranties and auto insurance necessary?

New car warranties

New car warranties generally come in two forms, bumper-to-bumper and powertrain.

Bumper-to-bumper warranty

A bumper-to-bumper warranty is from the manufacturer and generally lasts about 3 years or 36,000 miles.  This is the most comprehensive type of coverage you can get but it still doesn’t cover everything.  It generally covers things that aren’t covered already by a different manufacturer’s warranty.  It covers key parts to your car like the engine and transmission, but many times other components are not covered, such as parts with wear-and-tear.  Sometimes you will luck out and the warranty may cover everything from bumper to bumper, but this usually isn’t the case.  For this reason, you may want to consider purchasing other warranties to take care of your car’s other needs.  Many manufacturers’ warranties also state that the terms will only apply under certain conditions, such as regular checkups and maintenance, like oil changes and timely inspections.  Each manufacturer is slightly different so check your manual and see what is covered on your vehicle.

Powertrain

A powertrain warranty generally lasts slightly longer than bumper-to-bumper coverage, around 5 years or 60,000 miles.  As the name suggests, this involves items that give the car power.  Depending on what the warranty explicitly states, this can include things like the transmission, engine, axle shafts, or the clutch.  And sometimes only the parts themselves are covered, not the actual labor of replacing them, so check the fine print.

Extended Warranties 

Similar to interest rates, extended warranties are a product the car dealership is selling.  This means prices will likely be higher than if you shop around on your own.  Competitive online markets tend to have lower prices and they are all at your fingertips making it the best place to start; it’s also quick and easy. 

Visit our friends at Paragon Motor Club for a Free Price Quote on an Extended Warranty.   The extended warranty offered by Paragon Motor Club delivers broader coverage than most dealership mechanical breakdown warranties.  In addition, the offer a significant cost savings buying direct rather than through a middle-man.   

New Car Extended Warranty

The earlier you purchase your extended warranty from the time of purchase, the better rates you will get.  The longer you wait, the more expensive it will be as you become a higher risk to warranty companies.

Used Car Warranties

Used car warranties are a little trickier since it depends on where you get the car from.  There are 2 types for used cars: the manufacturer’s warranty and the implied warranty.  Then of course, many have no warranty at all, which is usually referred to “as is.”  Make sure you know what you’re purchasing and that you are okay with it.

Manufacturer’s Warranty

Before searching for a used car warranty see if there is an existing one on the car already.  Many new vehicle warranties cover well beyond 50,000 miles these days (usually bumper-to-bumper and powertrain) so you might be surprised.

Implied Warranty

An implied warranty is covered by state law in most states.  If the auto dealer tells you their product will work, it should work.  State law requires them to stand by their product and keep their word.  This can be sometimes hard to prove so get everything in writing.  Purchasing a car, used or new, is a big investment. You should be able to trust the seller, especially if it’s used since you can only go by their word of where it’s been and what it has been through.

Auto Insurance

Insurance coverage for your car not only covers damages to your vehicle in the case of an accident or theft, but it also protects the people in the car at the time of the incident.  Your insurance will pay for medical exenses for you and others, provides legal assistance in case of a lawsuit, covers expenses associated with uninsured or underinsured drivers, and protects you in situations of vendelism, theft, and weather related disasters.  Not only is auto insurance coverage important to protect you and your vehicle as you're driving down the road, but in most states it's the law.

There are various types of coverage options based on what best fits your needs.  Each option, however, will have different limits of coverage.  See what coverage option is best for you through Esurance.  Stop paying too much for auto insurance! Compare quotes online today.