There are a host of different warranty types that come standard or optional on new and used vehicles. Two of the best-known options are the bumper-to-bumper warranty and the powertrain warranty, both of which can provide peace of mind for your vehicle in the event that it breaks down or needs repairs.
Most new car purchases come with at least a powertrain warranty and often a bumper-to-bumper warranty; many last between two years/24,000 miles and ten years/100,000 miles, depending on the vehicle and the manufacturer.
So what exactly is a bumper-to-bumper warranty? Does it really cover everything that can go wrong with your new car?
The short answer is almost.
A bumper-to-bumper warranty is more comprehensive than a simple powertrain warranty since it covers -- as the name implies -- nearly everything between the vehicle's bumpers.
A powertrain warranty covers just the components that make the vehicle move: the engine, transmission and their related parts.
A bumper-to-bumper warranty builds on a powertrain warranty by adding coverage for all other non-wearable parts including the heating/cooling/air conditioning, the electronics and suspension.
While it sounds like a bumper-to-bumper warranty should cover your entire new car regardless of what breaks on it, this isn't exactly true. As mentioned, warranties of any stripe don't cover wearable items and they don't cover components that break or fail due to lack of maintenance.
Wearable items include things that generally wear out or which can be damaged during normal use. This includes things like the body panels, bumpers, tires, lights, brakes, windshield wipers, seat material and the vehicle's glass. For example, if someone bumps into your car in the parking lot and dents your fender, a warranty wouldn't cover that repair.
How to use a bumper-to-bumper warranty:
Most bumper-to-bumper warranties are easy to use when there's a problem. Owners simply make an appointment at their local dealership for that brand of vehicle (even if you didn't buy it at that dealership itself) and the dealership handles most of the paperwork and the repair itself. Generally they will do the repair and bill the automaker for all parts and labor relevant to that repair.
How do warranties relate to vehicle recalls?
The key difference between a recall and a warranty issue is recalls are done because they're required by law and they pertain to a wide number of the same vehicle. Warranty issues are specific to your vehicle.
When a car manufacturer recalls a vehicle, it's because they've discovered a flaw with a certain component in a vehicle. This can be anything from the airbags, electrical issues, body panels or frame, brakes or the instrument panel. Once an automaker notifies NHTSA they plan on recalling a vehicle (or once NHTSA mandates that they recall it), the automaker then notifies registered owners of that vehicle. When the replacement parts are ready (which can take up to several months), owners take their vehicles to their local dealership and have it fixed at no charge to them.
Recalls have no impact on your warranty and can be conducted regardless of whether you have a warranty or not. They also are done even if your vehicle is now out of warranty.
While recalls can be done on hundreds of thousands of vehicles for a specific flaw, a warranty is usually a case-by-case basis: your specific car might have a specific issue that no other versions of that car have.
Transferring a warranty:
Some people prefer to buy a car that's only a year or two old instead of a new car, which loses value as soon as you drive it off the lot. But what about that bumper-to-bumper warranty? Does it go with the car or expire with the change of ownership?
This depends on the warranty and whether it's transferable. Many new-vehicle warranties allow for at least one transfer of ownership to the vehicle's next owner.
This is a good thing, so try to find a warranty that is transferable. Transferable warranties are an asset for people selling their car with miles/time left on the warranty since it could increase the sale price because the seller is getting additional peace of mind.
Warranties for used vehicles:
Many companies offer extended bumper-to-bumper warranties for used cars -- either a vehicle you already own or a used vehicle you're considering buying. If you have a used car, you might consider investing in one of these policies. However, many of these warranties differ in that they require the owner of the vehicle to pay part of the price of repairs, similar to health insurance covering a majority of a health service.
Some of these policies have strict guidelines on where you can have work done on your car and receive the coverage. If you want a warranty on the vehicle you already own, the company may require an inspection to make sure there aren't any known issues you could try to have repaired once you buy the warranty.
Some of these policies can be expensive. If you're considering purchasing an extended warranty for your original coverage, make sure to read it very carefully and see what it does and doesn't cover. The coverage can vary in terms of parts that it covers and circumstances in which it covers it.
For instance, a policy might not cover engine repairs if the policy was purchased when it was already known the engine needed said repairs.
Before spending the money for an extended warranty, do your homework. After finding two or three policies, research the companies for positive and negative reviews online