New Car Warranty Terms Explained
Car warranties van be really confusing and you need to know what you're
getting, particularly if you're considering buying extended warranty coverage.
Here's what you need to know.
Administrator
The company that authorizes and pays the repair facility for repair work to your
vehicle. The administrator works with the repair facility to make sure your
claim is handled properly. As they are the company that pays your claim, their
financial strength is the most important factor in choosing a warranty company.
A.M. Best & Co
A.M. Best Company is the leading source for insurance company ratings, analysis
and information. A sound warranty administrator will have a rated insurance
company backing them. A.M. Best can provide a rating for that company. You can
visit their web site at www.ambest.com.
Auto Warranty
See Extended warranty.
Basic Warranty
The specific terms established by each manufacturer to repair vehicles through a
specified mileage and/or time period. All factory installed and many dealer
installed parts are covered under this warranty.
Bumper-to-Bumper Warranty
The most comprehensive warranty you can buy. It will cover all parts of your
vehicle and will only exclude a small list. Because the coverage is so
comprehensive, it will only list the few parts not covered. Most similar to the
manufacturer's warranty.
Car Warranty
See Extended warranty
Certified Car
Many cars sold used or off lease are certified by the manufacturer. This means
they have undergone a quality inspection process prior to sale. Often, a limited
powertrain warranty is attached to them. They do not have extended or
bumper-to-bumper warranties. There is no industry standard for certification.
Claims Reserve Accounts
An insured account that the administrator will maintain to pay future claims.
Consumable Items
Parts such as tires, batteries, clutch plates and wiper blades that are not
covered under any warranty.
Corrosion Warranty
Covers rust through perforation on sheet metal. Offered as original warranty on
new vehicles. Extended warranties do not cover corrosion.