FACTORY WARRANTIES - Most new cars sold have 2 warranties. One is called the "adjustment warranty" and is provided by the dealership, which covers items like squeaks, rattles, alignment problems and other minor annoyances, usually lasting for 90 days.Bumper to Bumper Warranty - The most comprehensive portion of the manufacturer's Factory Warranty, that covers all parts and systems, with the exception of certain "wear" items such as tires and wiper blades.
Powertrain/Drivetrain Warranty - Covers the engine, transmission, differential, and generally extends beyond the Bumper-to-Bumper warranty by a specific number of months and miles, and covers items that could be a major repair expense.
Corrosion/Rust Warranty - Generally extends beyond the Bumper-to-Bumper warranty and covers repairs due to rust or premature deterioration of major sheetmetal components.
Emissions Equipment Warranty - Required by law for all vehicles covering smog pollution reduction equipment for a minimum of 5 years or 50,000 miles.
Extended warranties are offered by most dealerships and are added to the price of the car. Simply stated, they are service contracts that range from covering just critical drive train components and internal engine problems to true "wear and tear" bumper to bumper extended warranties.
Although many of these items are covered by the manufacturer under the factory warranty for a period of time, with today's ever increasing costs for repairs and longer length of vehicle ownership, the peace of mind that an extended warranty offers, may not be a bad idea -- AS LONG AS YOU DON'T PAY TOO MUCH FOR IT!
Before you decide to buy an extended warranty from a dealer, remember, all extended warranties are negotiable and since dealers often mark them up over 100%, don't be afraid to ask for a discount and be aware that independent warranty companies offer less expensive products that are often superior to dealership offerings.
Some dealers often charge up to $2,000.00 for these extended warranties. At a few hundred dollars, the peace of mind that an extended warranty provides is a bargain. At a couple of THOUSAND dollars, such peace of mind is probably too expensive.
Finally, remember that an extended warranty is always OPTIONAL, and no matter what the salesman or finance manager at the dealership says, you CANNOT be required to purchase an extended warranty in order to obtain financing.
Think about it. Does it make any sense that a person would be required to INCREASE the amount they are financing by adding an extended warranty, in order to obtain that financing? Of course not! Financing is approved or denied based upon your credit and nothing else.
For a detailed discussion of extended warranties, please go to our extended warranty page.
Legal Recourse - What to do if you have a problem
The buyer always has the right to reject any new car that is unsatisfactory at the time of delivery. If you do take delivery and the car has problems, contact the service manager for repairs. If he is unable or unwilling to settle the problem or if the car has to be repaired several times for the same problem contact the general Manager or the owner. If you still can't get satisfaction, contact the regional office of the manufacturer and then the National office and file a complaint. (This information can be found in the owners manual of at the dealership.) Other agencies that can be helpful are the Better Business Bureau, and the Department of Motor Vehicles.
In all situations when dealing with repair problems keep an accurate written record of each repair attempt or contact with the dealer. This will substantiate any further actions that may be necessary.
Every state has various agencies and laws that can help the consumer in disputes with the dealer, including Lemon Laws, arbitration systems, and direct legal action in the courts.
For example, in California and other states, the Better Business Bureau(BBB) operates Auto Line, which is the largest arbitration system in the state. This system is designed to settle disputes which have run the normal course of repair, but have reached an impasse. All states now have similar systems for resolving such disputes under their respective Lemon Laws.
If you feel that you have a "lemon", go to Autopedia's 4 star award winning Lemon Law page for complete information.