Glossary of Extended Warranty Terms (Part 1)

Here are some common terms you will need to know as you research extended warranties.

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.

All Wheel Drive (AWD)
All four wheels are driven by the engine. AWD systems are superior to 4WD because they can be used under any road conditions. AWD systems use a center differential to allow the front and rear wheels to rotate at different speeds. AWD provides better traction than front or rear-wheel drive.

Guide to New Car Factory Warranties and Extended Warranties

A new car comes with several different warranties from the factory, each covering specific parts of your vehicle.

Manufacturer’s Warranties

Basic Warranty – The specific terms established by each manufacturer (typically 3 years/36,000 miles for domestic and Asian vehicles and 4 years/50,000 miles for luxury cars) to repair vehicles for a specific time and/or mileage period. All factory installed parts and some dealer installed accessories are covered for defects and workmanship. Consumable items (tires, wiper blades, battery) are not covered under the basic warranty, although some of these parts may have their own warranty. Commonly called the “bumper-to-bumper” warranty, it is the most comprehensive of all new car warranties.