Dealership warranties are manufacturer-backed auto warranties that provide coverage for production defects on your vehicle. Like most vehicle protection plans, a dealership warranty doesn’t cover wear-and-tear damages.
This type of coverage either comes with your new car or can be bought from nearly any authorized dealer under your automaker. Once your factory dealership warranty expires, an extended dealership warranty is useful for a variety of reasons. In our 2022 customer survey, these were the most common answers as to why customers purchased their extended warranty.
Types Of Dealership Warranties
Dealership warranties either come with your new car or are purchased as extended coverage. The main two types of warranties are powertrain and bumper-to-bumper.
A powertrain car warranty covers unexpected repairs associated with parts that keep your car moving – such as the engine, transmission, transfer case, drive axles, and more. Powertrain warranties are sometimes referred to as drivetrain warranties. They are often the cheapest forms of warranty coverage in the auto industry.
A powertrain warranty is just one component of a new car’s factory warranty coverage. Dealerships also sell optional extended powertrain warranty coverage for extra protection beyond your factory warranty.
Bumper-to-bumper warranties are also known as comprehensive or exclusionary warranties. While the most expensive, this type of warranty covers most vehicle parts save for a short list of exclusions – which makes it the highest coverage type you can have for your car.
New cars from automakers like Ford, Honda, and Toyota typically come with a bumper-to-bumper warranty lasting for three years, but longer warranty terms can be bought as extended coverage through a dealership.
What Is A Factory Warranty?
Factory warranties are also from the manufacturer, but are different from dealership extended warranties. A factory warranty is a guarantee from your car’s manufacturer that any breakdowns occurring from faulty workmanship or defective parts will be repaired for free.
Factory warranty coverage includes both bumper-to-bumper and powertrain warranty protection. It also usually includes a corrosion or perforation warranty, emissions warranties, and various other coverages.
The main difference between a factory warranty and dealership extended warranty is that a factory warranty comes with your new car and an extended warranty is an optional purchase. Both are backed by your car’s manufacturer.