Understanding the difference between an aftermarket automotive warranty, which is also known as a third party warranty, and an original manufacturer warranty is necessary when deciding if an aftermarket warranty is right for you. When you purchase a new car, the automobile manufacturer will warranty the vehicle for a period of time. Lets think of the warranty as a package that is included with the car, and we can now break down all parts of the package.The first, and most important part of the package is the basic warranty plan. This is your "bumper to bumper" coverage which will cover ANY non-maintenance or non-body damage incidents for as long as the defined period. Under the original new car warranty, you would simply bring your car to an authorized dealership of your specific manufacturer and your repairs would be covered. These bumper to bumper terms are usually 3 years / 36,000 miles, 4 years / 50,000, or 5 years / 60,000 miles, although the latter is very rare. The "bumper-to-bumper" coverage is the most important coverage and no aftermarket or third party warranty plan will cover your vehicle in such a comprehensive way.

     Power train protection is the next part of your new car warranty package. This is the coverage that many car companies today try to sell you on, by marketing their policies in an almost misleading way. When car companies advertise a 10 year / 100,000 mile warranty, what they try to hide is the fact that this warranty is a "power train warranty". Although this warranty can be very helpful, it is important to understand the difference between a "power train warranty" and the "bumper to bumper" coverage. The power train coverage is limited to major mechanical components only, usually including the engine and transmission. You need to be educated on the matter so you can realize and understand exactly the coverage you are receiving. The next part of the package, is rare; but some auto makers will include maintenance in the warranty package. One such example is BMW,which includes 4 years / 50,000 miles of free maintenance on every car they sell. They cover brake pads and rotors, oil changes, fluids, wiper blades, etc. Many companies that offered maintenance have discontinued this coverage recently.

     The last component to the package is transferability. Knowing if your warranty will transfer to the new owner if the vehicle is sold will add resale value to your vehicle. Most basic warranties will transfer, power train coverage usually does transfer, but is known in some cases to be "original owner only".

      As you see, understanding the components of your "warranty package" is crucial to making a good decision on a new car purchase, a used car purchase, or the purchase of an aftermarket auto warranty. You wouldn't want to purchase an aftermarket power train warranty after your basic warranty ends when your car has one included!