What a does 5-year or 100,000-mile warranty mean?

Giulia Nigrini
Giulia Nigrini
Vehicle Service Contract Specialist, Traveler, Car Enthusiast
November 24, 2021
min. read
a view from above of a four lane road lined with trees and cars driving in both directions

There is a good chance that you are keen on an extended warranty for your vehicle but you still have a few questions. Such as: “What a does 5-year or 100,000-mile warranty mean?” I take a look at what an extended warranty is and what is meant by the terms set forth by manufacturers and warranty providers. So read on further to have your warranty questions answered.

What is an Extended Vehicle Warranty?

An extended vehicle warranty is a vehicle service contract designed to protect your vehicle against major repairs and workmanship defaults. New cars are most often sold with manufacturer/factory warranties or OEMs (original equipment manufacturers). These extended warranties act as an extension for the original manufacturer warranty on the vehicle. You have the possibility to get an extended warranty via the original manufacturer or dealership, but these do have limitations. Another option is third-party warranty providers that supply a wider range of warranty plans and benefits.

What does an Extended Car Warranty Cover?

OEMs are offered in two variations, a powertrain plan or a bumper-to-bumper plan. This is also true for third-party extended warranty providers. Powertrain plans sit on the most basic tier of warranty options and ensure that all of the components within your car’s powertrain will be covered. These parts include:

Bumper-to-bumper warranties cover the same parts plus parts such as navigation systems, power seats, onboard computers, and other electronics. Sometimes referred to as an exclusionary warranty due to having fewer parts not covered than those covered. Components typically excluded from bumper-to-bumper warranties include:

You may also be surprised to learn that some third-party extended warranties for vehicles can have more benefits and at times last longer than the OEM warranty.

What do Warranty Terms Mean?

Warranty terms are applied to both powertrain and bumper-to-bumper warranty plans. Powertrain warranties tend to have longer terms than bumper-to-bumper warranties. Regardless of the plan coverage terms, they work the same way. If you have warranty terms of 5 years or 100,000 miles “whichever comes first” then you essentially have a warranty that is valid for a maximum of 5 years or a maximum of 100,000 miles. So if you reach 100,000 miles used before your warranty expires then the warranty will be terminated. Ideally, you want to have the warranty running for the full 5 years.

What Benefits come with Third-Party Extended Warranties?

Many factory warranties do have some benefits but are either linked to the original warranty only or they may be very limited. Third-party warranty providers give you a much better range of options in terms of benefits and optional additional coverage items. Some added benefits that come with the extended car warranty to some degree include the following:

Is an Extended Warranty Right for Me?

With limitations on the possibility to have money aside to cover large bills, it is a wise idea to have cover in place. An extended car warranty is there to alleviate the stress of inevitable auto repairs. So if you do not have the possibility to keep upwards of $1,000 set aside for unforeseen car repairs, I would certainly suggest investing in an extended warranty.

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