Warranties can range from full Bumper-to-Bumper
protection all the way down to covering only the
vehicle's power train, and everywhere in between.
The warranty industry has broken it down into
three major categories and all warranties will
fall into one of these. They are Bumper-to-Bumper,
Stated Component, and Power Train.
An Insider's Secret You Should Know
When is a used car not a used car? When it comes
to warranties. The industry uses the term "New
Car" to mean any vehicle that is still covered
by a portion of the manufacturer's warranty. You
could have bought your vehicle from the third
owner with 40,000 miles on it and the warranty
companies still consider it a new car if it is
within the manufacturer's warranty period. So
don't think that just because you have 40,000
miles on your vehicle and you didn't buy it off
the showroom floor, that you have to settle for
a "used car" warranty.
Bumper-To-Bumper
Coverage A Bumper-to-Bumper warranty, also known
as a new car warranty, a wrap program, or an exclusionary
policy, is the most comprehensive coverage you
can buy. They cover so many parts and components
that the policy will only list the items that
are not covered. Hence the term "exclusionary"
since only the items excluded from coverage are
listed. Most bumper-to-bumper policies will also
include, or offer as an option, added benefits
and coverage such as 24/7 roadside assistance,
towing, car rental reimbursement, travel interruption
protection, wear and tear coverage, seals and
gaskets coverage, and hi-tech electronic equipment
coverage.
Bumper-to-Bumper coverage is only available to
what the industry calls "new cars". In most cases
these are vehicles that have up to 50,000 miles.
You will pay a small surcharge for miles above
12,000 but the additional protection is well worth
it.
An insider's tip is "Bumper-to-Bumper does not
cover the bumpers". Contrary to the term "bumper-to-bumper"
these policies do not cover every single part
on your vehicle from bumper to bumper. Make sure
you read the policy to see exactly what is not
covered. They are however the most extensive coverage
you can buy.
Stated Component Coverage
Stated Component coverage, also known as an inclusionary
policy, is a standard warranty that covers most
of the major parts and components on your vehicle.
These policies will list all items covered or
included in the warranty, hence the term "inclusionary".
Some stated component policies will offer as an
option additional benefits and coverage.
These are a very good alternative when your vehicle
does not qualify for a bumper-to bumper policy
and they are a very good value. Typically these
apply to mid-mileage vehicles with 50,000 to 100,000
miles.
Power Train Coverage
Power Train coverage is a basic warranty and only
covers, as the name refers, the vehicle's power
train. This would include the engine, transmission,
drive axles and drive shaft. Some power train
warranties, also known as plus or enhanced policies,
will extend the coverage to a few additional parts
and components.
A Power Train warranty will cover you for the
big ticket items and the really big repair bills.
These are the most inexpensive of all the warranties.
A power train warranty is more appropriate for
a high mileage vehicle or a mid-mileage vehicle
if you are only concerned with the big ticket
repair bills.
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