If you’re getting a new or used car, you’re going to hear some terms flying around. The whirlwind of information may confuse you, overwhelm you, or just plain frustrate you. You’ll hear about car warranties, or an extended auto warranty for used cars.

You’ll hear about bumper to bumper coverage and Powertrain warranties. And you might not know what any of this means. It’s okay, though. We’ve pulled together some thoughts for you on this important step into car ownership.

Let’s define some terms first, so that you may decide what you need to get. You’ll need the car loan, the dealership you want to buy from, and the test drive done. After those, they’re going to hit you with some questions. Like, do you want to get an extended vehicle warranty?

What is an Extended Auto Warranty?

An auto extended warranty is a service contract for additional coverage beyond the manufacturer’s warranty. Manufacturer warranties usually run out after five years, or after a certain number of miles have been put on a vehicle.

A Volvo car, for example, has a five-year warranty or 60,000 miles. Extended warranties are something consumers can purchase after the original manufacturer’s warranty has run out. But there are different kinds of warranties, so make sure you know what you’re buying before you sign on the dotted line.

What Kinds of Warranties Exist?

Drivetrain or Powertrain Coverage

The Powertrain or Drivetrain warranty is the kind of warranty that covers all the moving parts of the car – i.e. anything that powers the car. This means the engine, the axels, the transmission and the drivetrain are covered on a powertrain warranty. If one of these components breaks, the warranty covers the cost of replacing the damaged item.

Bumper to Bumper Warranties

As implied, the bumper to bumper warranty covers everything, including what the powertrain warranty covers. Bumper to bumper means engine, suspension, and electronics. That means radio, brakes, engine and pretty much everything else. The glass and interior seating fabric of the car, however, are not included. Be sure you know exactly what is included before you finalize your warranty plans.

Other Types of Warranties

Other warranties may do anything from providing roadside assistance, like AAA is known for, or covering rust or corrosion damage. Some performance warranties help to cover the issues related to emissions, and battery warranties generally come from the manufacturer of the battery itself.

How to Decide What Kind of Warranty You Need

If you’re buying a new car and don’t expect to keep the car past the manufacturer’s warranty expires, an extended warranty may add resale value.

However, that may not apply if you’re trading it in for an upgrade or selling the car back to a dealership. If you’re buying a used car that’s still good under the manufacturer’s warranty, you’ll need to decide what kind of warranty to get before driving it off the lot.

A bumper to bumper warranty covers more, but will, of course, also cost more. The important features of the car will be covered under the Drivetrain extended vehicle warranty, though, and this may be all you need.

The best way to decide on what kind of warranty coverage to get is going to be based upon financial factors. You’ll need to consider the following:

1. Insurance Coverage

What is and is not going to be covered by your insurance policy? What does the warranty cover that your insurance already covers in the case of an accident?

2. Deductibles on the Warranty

What is and is not covered by the deductibles and what would you have to pay in the case of normal wear and tear that insurance won’t cover?

3. Cost of the Warranty

What can you afford per month on this item? Is the added expense to your car payment something you can handle? If not, is there lesser warranty coverage that would do what you need and be more reasonably priced for you?

As you head out into the auto buying world, have your answers ready on the kind of warranty you may need, and whether or not you do need it.

Will you be purchasing a new car with more than enough warranty coverage? Will a Powertrain warranty be enough, or is bumper to bumper what you need?

Dealerships offer warranties of various kinds. Third party auto warranty companies also offer these types of warranties. Some of the best rated for 2018 include Endurance Auto Warranty, Protect My Car, Car Shield, and Carchex.

Many other companies offer options. Make some phone calls, talk to the car dealership, and ask the questions that will help you find the right extended warranty plan for your car.

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