2 Types of Extended Vehicle Protection Programs

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If you’ve ever purchased a new or used car from a dealership, you’ve likely been offered an extended vehicle warranty. Extended vehicle protection programs are meant to give auto owners an extra bit of confidence. In essence, the extended warranty is an insurance policy that protects you from unexpected catastrophic mechanical problems.

Though extended vehicle warranties can be beneficial for car and truck owners, they can also be quite lucrative for the companies that offer them. Since many people will fortunately never have to cash in on the protection offered by the warranty, both dealerships and third-parties are eager to sign car buyers up for extended warranties. That’s not necessarily a bad thing, as they do offer additional protection beyond the manufacturer’s original warranty. Read on to learn more about the two primary types of warranties that can be purchased to protect your investment in a new or used car.

OEM or Manufacturer Warranty

If you purchase a new car, there will be a warranty offered by the manufacturer that will cover the cost of parts and repairs for a predetermined period. OEM warranties come in two primary types, bumper to bumper warranties and powertrain warranties. The powertrain warranty covers the car’s engine and transmission against defects in manufacture or workmanship. The bumper to bumper warranty covers almost everything else that’s not a part of the powertrain. There are a few exceptions, but most systems are covered by the bumper to bumper warranty. Once the original powertrain and bumper to bumper warranties have expired, you can opt to purchase an extension of the warranty from the manufacturer that will preserve the coverages for a longer time. The payments or deductibles for warranties offered through manufacturers tend to be minimal.

Third-Party Warranty

If you aren’t offered a manufacturer’s extended warranty, you may also be able to find a third-party extended warranty. Typically, third-party warranties offer coverages that are like those offered in the original manufacturer’s warranty, but with a few notable exclusions and requirements. For example, a third-party warranty may require that your vehicle be repaired by a specific garage or dealership to maintain coverage. Unlike most OEM warranties, a third-party warranty may require you to pay up front for repairs and await reimbursement. They are less expensive than manufacturer warranties in most cases. Also, if you’re purchasing a used car from a dealership, the dealership may not be able to offer you an extended OEM warranty. In such circumstances, a third-party extended warranty can be a good idea.

If you are purchasing a new vehicle, consider taking advantage of extended vehicle protection programs. They will protect you from costly unexpected repairs for longer than the original manufacturer’s warranty and keep your car on the road for years to come.

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