What is a car warranty?

A car warranty is a contract that protects against defects to your vehicle's parts and mechanical components. If a covered part breaks, the warranty provider pays to fix it. Typically, you can buy warranties through a dealership or third party, but any new car typically comes with a manufacturer's warranty that you don't have to buy separately.

What are the differences between car warranties and car insurance?

Understanding the differences between car insurance and a car warranty is important so you can adequately protect your vehicle. The following chart breaks down the key differences between the two:

Car warranty Car insurance
Length Car warranty New car warranty: Typically, 3 years
Extended warranty: Varies
Car insurance Renewable every 6–12 months, in most cases
What it can cover Car warranty Parts that break due to normal wear and tear, extreme heat or cold, mechanical defect, vehicle recalls, or poor maintenance Car insurance Property damage or injuries you cause in an accident, as well as damage to your vehicle and your own injuries
What it doesn't cover Car warranty Routine maintenance, oil changes, tire rotation, brake pads Car insurance Routine wear and tear, mechanical breakdowns, or manufacturer defects
When you can purchase it Car warranty Your vehicle will come with a warranty that lasts for ~3 years; after that, you can buy an extended warranty at any time Car insurance You can purchase a policy at any time
Where to buy it Car warranty Manufacturer, dealership, third-party vendor Car insurance Either online or over the phone through an insurance company or agent

What do car warranties cover?

Car warranties can cover some or most of the components inside your vehicle, including the engine, electronics and air conditioning systems, and the transmission. As for the types of damage covered, a warranty may cover damage due to:

  • Normal wear and tear
  • Extreme heat or cold
  • Mechanical defects (including vehicle recalls)
  • Poor maintenance

Does a car warranty cover accidental damage?

No, a car warranty won't cover damage to your vehicle caused by an accident. That's where car insurance can help. If you carry comprehensive and collision coverage, your vehicle is covered for accidental damage, as well as other unexpected events, such as a tree branch falling on your car.

What are the different types of car warranties?

Typically, you can choose between a new car warranty and an extended warranty. Both options provide you with coverage but vary in how long the protection lasts.

New car warranty

A new car warranty, also known as a manufacturer's warranty, helps pay for replacement parts or specific repairs during the stated warranty period. A new car warranty's length may vary by manufacturer, but most last at least three years or the first 36,000 miles, whichever comes first.

Extended warranty

Extended warranties can provide protection for used cars that are outside the manufacturer's warranty or provide extended coverage for new vehicles. The coverage length for extended warranties varies widely between providers but is also measured in years or mileage.

Roadside assistance vs. car warranty

Both car warranty providers and insurance companies may offer roadside assistance for tows, lockouts, and more. Not all car warranties include coverage for this service, though most insurers offer roadside assistance as an optional coverage you can add to your policy. If you're looking for roadside assistance coverage, compare the cost of a warranty with it against the cost of adding it to your auto policy, as well as what specific services are covered.

Looking for more information about auto insurance? Our car insurance resource center has you covered.