Understanding the difference between a manufacturer’s warranty and an extended car warranty is important so you can know what you are (or aren’t) covered for in the event that your vehicle breaks down. This article will explain to Canadian drivers about the different types of car warranties available, so they can make an informed decision on the type of coverage that is right for them.
What common questions will be answered in this article:
- What is a manufacturer’s warranty?
- What is an extended car warranty?
- What's the difference between an extended car warranty and a manufacturer’s warranty?
- How do I know if my vehicle has a warranty?
- Is an extended car warranty worth the cost?
What is a manufacturer’s warranty?
A manufacturer's warranty (also known as a “factory warranty” or a “new vehicle warranty”) is a financial protection product that protects the driver from expensive car repairs that may arise during the first few years of driving the vehicle. Typically, a manufacturer’s warranty is bundled into the ticket price of the new car.
The length of a manufacturer’s warranty varies depending on the original equipment manufacturer (OEM) that the driver purchased the vehicle from, but typically it kicks in at the time of the vehicle’s purchase and most will expire after about five years. You should note that the level of protection and components that are covered may vary throughout the full warranty period. New cars start out with bumper-to-bumper warranties, meaning everything from the front to the back of the car is covered. After a certain period, the warranty evolves to a different level of protection, referred to as a powertrain warranty, which protects the components that are essential to helping your car run.
What is an extended car warranty?
An extended car warranty is an optional financial protection product that can be purchased by a driver to help cover the cost of expensive car repairs. Essentially, an extended car warranty extends the type of coverage that one receives from the manufacturer’s warranty during the early years of owning a car.
Extended car warranties vary on levels of coverage and length of contract terms depending on the provider and level of protection. Curious about extended car warranties, click here to learn the ins and outs of what to expect from an extended car warranty.
What is the difference between a manufacturer’s warranty and an extended car warranty?
So, now that we’ve covered what an extended car warranty and what a manufacturer’s warranty are, we can recap the key differences between each:
- Optional vs. mandatory: A manufacturer’s warranty is one that automatically comes with the purchase of a brand-new vehicle whereas an extended car warranty is optional additional coverage that can be purchased in order to remain covered once the manufacturer’s warranty has expired.
- Length of contract: Depending on the OEM, your manufacturer's warranty contract will typically offer you a maximum of five years of protection. An extended warranty contract length can vary from just one year to more than 7 years and depends on what the provider that you purchase it from offers (note: most contracts will expire once your vehicle’s model year reaches a certain age or your odometer reaches a certain number of kilometers).
- Cost: A manufacturer’s warranty is built into the ticket price of a new vehicle. An extended car warranty’s cost varies depending on the level of coverage and length of the contract.
This graphic below will help you visualize the average warranty periods of both a manufacturer’s and an extended car warranty:
How do I know if my vehicle has a warranty?
Knowing the difference between a manufacturer’s warranty and an extended car warranty is great, but how do you know if you’ve currently got one?
Some sure-fire ways to confirm whether you do or do not have a warranty are as follows:
- Check the age and mileage of the vehicle. As we discussed, most manufacturer’s warranties expire after around five years, meaning if your vehicle’s model year is older than five years old, chances are you’re no longer being protected, and you may want to consider purchasing an extended car warranty. The same can be said if the mileage exceeds a certain threshold.
- Consider where you purchased the vehicle. If you bought your vehicle from a dealership less than five years ago, you are more likely to be covered by a manufacturer’s warranty. However, the situation becomes a bit less clear if you bought the car second hand from a private seller or from a used car lot. Sometimes a car’s warranty plan can be transferred to the car’s new owner, so it’s a good idea to investigate. Alternatively, if you purchased the vehicle from a used car dealer, they may have some extended warranty plans available which would have been communicated to you during your buying journey. If you’re still unsure of your situation, the best thing to do is to get in touch with the person (or business) that you purchased the vehicle from to ask them.
Is it worth getting an extended car warranty after the factory warranty expires?
You’ve just realized your manufacturer’s warranty has (or is about to) expire, and you’re wondering whether it’s worth it for you to purchase an extended car warranty? Well, you’re in luck, we’ve got a full guide to help you weigh the pros and cons and consider your personal budget to determine whether an extended car warranty is worth the money for you.
Sneak peek into what’s covered in our article “Is an extended car warranty worth the cost?”:
- Learn how to determine whether you’re eligible for an extended car warranty.
- Learn the pros and cons of putting your savings into a rainy-day fund vs. purchasing an extended car warranty.
- Consider real-life scenarios to help you make your decision.
Extended car warranty? Extended peace of mind.
So, you’ve done your research and have determined that an extended car warranty is the right call for you. Great, we are happy to hear that!
GuardTree is Canada’s first monthly subscription based extended car warranty specifically designed for used car owners. Save thousands of dollars on expensive car repairs, PLUS, get incredible benefits (like roadside assistance, car rentals, and trip interruption coverage) for being a member.
Read more from GuardTree:
- GuardTree vs CAA
- How to Choose an Extended Car Warranty That’s Right For You
- 8 red flags of a bad extended car warranty (and how to avoid them!)
Disclaimer: This post is to be used for informational purposes only and does not constitute mechanical or other professional advice as it relates to your vehicle. Each person must consult a qualified professional with respect to matters referenced in this post. GuardTree Inc. assumes no liability whatsoever for actions taken (or not taken) in reliance upon the information contained herein.