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.

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.

Better Business Bureau (BBB):
The Better Business Bureau (BBB) has long been a means consumers have used to check out a company. In order to participate in the BBB Online Reliability Program, a company must have a satisfactory complaint handling record, agree to participate in the BBB’s advertising self-regulation program, agree to abide by the BBB Code of Online Business Practices, and agree to dispute resolution with the BBB. Most of the companies who participate in this program value their standing in the BBB, and tend to do a better job at handling complaints

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.

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. Most 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 generally 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.

Deductible:
The amount that you must pay the repair facility for work when vehicle is being repaired. Many plans are offered with a zero deductible option.

Drive Train:
The components that transmit the flow of power from the engine to the wheels. The components include the clutch, transmission, driveshafts (or axle shafts in front wheel drive), U-joints and differential.

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.

Powertrain Warranty – More and more manufacturers are offering powertrain warranties that last longer than the Basic Warranty. Coverage under this portion of a new car warranty begins after the Basic Warranty expires and normally consists of coverage for the engine, transmission and drive axles only. Be sure to check the specific components covered in the owner’s manual. Some Powertrain Warranties will have a deductible and may not be transferable to subsequent owners.

Emissions Warranties – Federal Emissions Warranty guidelines are based on federal regulations and apply in all 50 states. California has adopted stricter Emissions Warranties and other states, including New York, Massachusetts and Connecticut, have adopted these tougher standards as well.

The Emissions Performance Warranty is for 2 years/24,000 miles. Certain parts (catalytic converter and electronic emissions controls (PCM) are covered for up to 8 years/80,000 miles. Please refer to your owner’s manual for your exact Emissions Warranty.

Corrosion Warranty – Covers rust through perforation on sheet metal with actual holes. Surface corrosion from nicks, chips and scratches are not covered. Coverage may differ for inner and outer sheet metal panels. Please refer to your owner’s manual for your exact Corrosion Warranty.

Extended Warranties

Extended warranties are also known as Vehicle Service Contracts and Mechanical Breakdown Insurance policies.

An extended warranty is a contract between you and a warranty company, dealer or manufacturer (Obligor), whereby the Obligor agrees to pay for specified repairs for a certain mileage and/or time frame. Better extended warranties will also cover you for “seals and gaskets” and “wear-and-tear” on items that wear out. When searching for coverage, please know that there are as many coverage types as there are vehicle models.

Exclusionary Warranties – Exclusionary warranties are commonly referred to as bumper-to-bumper warranties. According to the Federal Trade Commission, in order to be called a bumper-to-bumper coverage, it must only show a small list of items not covered; just like a new car warranty. If a plan lists parts that are covered, while it may be comprehensive, there may be hundreds of parts of your vehicle not covered. These Exclusionary warranties generally offer the highest level of coverage, and are most similar to the factory warranty.

Wrap Warranties – A specialized bumper-to-bumper coverage for vehicles with powertrain warranties that run longer than the factory bumper-to-bumper warranty. This eliminates the duplication of coverage of your powertrain and makes coverage more affordable.

Named Component Warranties – As the name implies, named component coverages will provide a list of parts that are covered. These types of warranties are also referred to as “inclusionary” plans. There are many levels of named component coverages available. They offer an excellent alternative for vehicles that may not qualify for bumper-to-bumper coverage or for those looking to cover the major systems of a vehicle only.

Powertrain Warranties – A Powertrain warranty is the most affordable car warranty available. It covers the engine, transmission and drive axles or about 25% of your vehicle. Typically designed for older, high mileage vehicles, it represents an excellent alternative for those looking for “major medical” coverage for any automobile.

Mechanical Breakdown Insurance Policies – Mechanical Breakdown Insurance (MBI) policies are offered to California residents. Policies are regulated and overseen by the California Department of Insurance (CDI). Companies offering MBI coverage in California must be licensed by the CDI.