What's in a Warranty?

To win customers, many automakers are looking to improve their warranty offerings

As the market for automobiles grows ever more competitive, the gap in quality and safety is narrowing. As a result, automakers must continually be on the search for new ways of demonstrating their prowess in these categories and beyond. To demonstrate confidence in the quality of their vehicles and lure customers away from competitors, many automakers are looking towards ramped up warranty offerings – the window of time and/or distance for which the vehicle is covered in the event major maintenance issues arise.

General Motors Co. recently made headlines when it announced that it was increasing its limited powertrain warranty on all 2007 model vehicles to 5 years or 100,000 miles, including roadside assistance up 100,000 or 5 years and courtesy transportation. The warranty is fully transferable and has no deductible. GM contends “it’s the best coverage in the auto industry,” especially compared to its previous powertrain warranty offering – 3 years or 36,000 miles.

But this is not the first time an automaker has increased flexed warranty offerings in order to strengthen its quality reputation and gain a foothold on the competition. Take, for example, Hyundai and Kia, two relative newcomers to the U.S., whose quality problems early on threatened their survival in this market.

In 1999, Hyundai began to offer a powertrain warranty covering up to 100,000 miles or 10 years, a first of its kind quality commitment for the auto industry; Kia followed suit a few years later.

In 2006, a combined total of six Hyundai and Kia vehicles appeared on J.D. Powers and Associates’ list of Top 3 Models Per Segment for Initial Quality, and Hyundai ranked third among all nameplates for the fewest problems per 100 vehicles.

Not only are Hyundai and Kia now recognized for the high quality and safety of their vehicles, their sales totals have skyrocketed, escalating them to the No. 4 and No. 7 best-selling automakers in the U.S. And their commitment to America is growing thanks to billion dollar investments in facilities such as Hyundai’s assembly plant in Montgomery, Alabama, and, most recently, Kia’s announcement that it too will build an assembly plant in the U.S.

The Warranty

Each new vehicle sold in the United States comes with a warranty package from the auto manufacturer. The package typically contains two warranties: a basic warranty and a powertrain warranty. Depending on the manufacturer, other warranties may also be included such as a rust or corrosion warranty and roadside assistance. The specifics of each warranty package are detailed in the owner’s manual. And, a local dealer is also a good resource to utilize when researching the warranties of a specific manufacturer.

A basic warranty, otherwise known as a bumper-to-bumper warranty, covers everything except those items that are subject to normal wear and tear such as wiper blades, filters, belts, and etc.[1] The vehicle’s battery and tires are often covered by their own warranties. The minimum basic warranty offered is 36,000 miles or three years.

A powertrain warranty lasts longer than the basic warranty. Typically, it refers to most parts that make the car go such as the engine, transmission, and axles[2]. As with the basic warranty, parts subject to wear and tear are not covered. A powertrain warranty can range from 36,000 miles or three years to 100,000 miles or ten years, with a lot of variation among automakers.

A rust or corrosion warranty protects from rust-through problems with sheet metal, but does not include surface rust.[3]

Roadside assistance provides the owner with exactly what it sounds like. Through this warranty, flat tires are changed, fuel is delivered, car doors are unlocked, and transportation is provided in the case of a vehicle breakdown.

[1] Edmunds.com Editors. Warranty and Roadside Assistance Coverage.

Edmunds.com 15 Sept. 2006

[2] Ibid.

[3] Ibid.

AIADA staff member Murphie Barrett contributed to this article

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