Kick the Tires, Read the Warranty

When Ifsha Rahman bought a new car last year, she paid attention to the manufacturer’s reputation and the vehicle’s styling and affordability.

But, like most new-car buyers, the 30-year-old Arcadia resident didn’t pay a lot of attention to the warranty.

She should have.

After narrowing down her choices to two cars, purchase price won out: Rahman selected a Honda Civic EX over the vehicle that really was her heart’s desire, a new Volkswagen Beetle.

“As far as reputation goes, Volkswagen and Honda seemed about the same,” Rahman said. “The Beetle was the cool car, and I really wanted it. But when the Bug turned out to be several thousand dollars more, I decided being trendy wasn’t worth the extra money.”

Had Rahman compared warranties, she might have been able to rationalize buying her dream car.

Although Volkswagen’s basic warranty of two years or 24,000 miles doesn’t stand up to Honda’s basic coverage of three years or 36,000 miles, the German auto maker’s powertrain warranty coverage--10 years or 100,000 miles--puts Honda’s, the same three years, 36,000 miles, to shame.

And if Rahman ever locks herself out of the car or runs out of gas, she’s on her own in the Civic. But with the VW, she would have had two years of roadside assistance at no extra cost.

Rahman is not alone in overlooking warranties when comparing vehicles. In a recent survey, the Automobile Club of Southern California asked its members what was most important when buying a new car. The warranty didn’t show up as a priority, says Steve Mazor, the club’s chief automotive engineer.

“People are much more concerned with brakes and crash-worthiness, which are at the top. A little lower on the list come trunk room, acceleration and handling. Warranty is even lower,” he said. “Most new-car warranties are adequate, so it’s not a big deal to many buyers.”

But when something goes wrong with a car, the warranty is critical.

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Most experts agree that, with the reliability built into modern automobiles, car buying, like marriage, has become an affair of the heart, seldom marred by thoughts of what could go wrong down the road.

J.D. Power & Associates’ annual initial quality study reinforces the fact that cars are better now than ever. The number of problems reported by new-car buyers has declined by 50% over the last decade.

That’s good news, of course, but it is little comfort to the poor consumer who buys an exception to the rule that drops a transmission or cracks a head at 20,000 miles.

And that’s where warranties come in.

A new-car warranty is really a sort of insurance plan that promises you will get your money’s worth out of a vehicle for a specific period of time, says Paul Roberts, regional area manager at Penske Auto Centers in Troy, Mich.

And contrary to popular belief, as Rahman could have discovered, not all warranties are the same.

As competition has heated up, some manufacturers are providing longer and more comprehensive warranties as a way to win customers. American Isuzu Motor Co., for instance, advertises a 10-year, 120,000-mile powertrain warranty. Lincoln provides complete coverage, including routine maintenance, for three years. And American Hyundai Motor Co. and Kia Motors America Inc. both provide 10-year, 100,000-mile basic warranties on all their vehicles.

Most new cars come with four separate warranties, each covering specific parts and components or insuring against specific problems.

The most familiar to many buyers is the basic warranty, which covers most of the car against defects for the first few years. Terms vary, and a thorough understanding of what is and is not covered--and for how long--should be part of a truly informed car-buying decision.

Often called the bumper-to-bumper warranty, it is provided at no extra cost by the vehicle manufacturer and covers defects in all manufacturer-supplied parts and components. These usually are referred to as OEM parts because they are supplied by the original equipment manufacturer. Actually, most car companies buy many components from outside vendors, who build them under contract. But because car makers integrate the components into their cars, they provide the warranty coverage for most.

A basic warranty typically runs three years or 36,000 miles--whichever comes first. But a growing number of car makers are now covering their vehicles for four years or 50,000 miles. A few go even beyond that.

In most cases, basic warranties do not cover “normal wear and tear,” meaning the dealer isn’t going to replace dirty oil filters or worn fan belts, heater hoses or windshield wiper blades for free unless there is a provable defect.

But a few companies--mostly luxury car makers like Lincoln--now advertise warranties that cover all routine, scheduled maintenance for the first couple of years. These plans often will replace anything that wears out, for whatever reason.

Although components like air conditioners and starter motors are covered by the car makers, tires and batteries usually have separate warranties supplied by the makers of those components. Most car dealers also sell batteries, so they can process the battery warranty. But in many cases, new-car owners with tire problems have to go to the tire maker’s facilities to get service. Exceptions are General Motors Corp. which began including tires in its basic warranty several years ago, and Ford Motor Co., which added tires to its factory warranty last year in the wake of the Firestone tire debacle.

Other warranties provided by vehicle manufacturers include:

* Powertrain warranty, which covers critical parts such as the engine, transmission, drive shaft, axles and differential or transaxle. Some also cover major components of steering, suspension and powertrain-related electrical systems. These warranties often are part of the basic coverage, but some manufacturers extend them to as much as 10 years.

* Emissions warranty, which covers all smog- and emissions-control components for three years or 50,000 miles in California and three years or 36,000 miles in most other states. California also requires auto makers to extend warranty coverage of expensive emissions-systems parts, such as catalytic converters, to seven years or 70,000 miles. Major systems include the catalytic converter, electronic control unit, crankcase ventilation system, air-flow control valves, fuel tank evaporative emission system and myriad filters.

* Rust and corrosion warranty, which covers against damage to sheet metal because of rust or corrosion that typically is caused by the salt used during the winter in many states to help melt ice on roads. This coverage could be important in California if you live near the ocean and do not keep your vehicle garaged.

* Roadside assistance coverage. This service comes to the aid of stranded motorists by providing emergency repairs, gasoline and towing. The coverage is becoming increasingly popular. If a vehicle manufacturer doesn’t provide it, as many luxury makes do, the same service also can be had with membership in an auto club or through some credit card companies.

Although they come in many shapes and sizes, the manufacturers’ basic warranties do have one thing in common: Their cost already is included in the suggested retail price of the vehicle. The value of a Rolls-Royce warranty is a lot more than the warranty on, say, a Chevrolet, but industry insiders say they typically add less than $1,000 to the price of a vehicle.

There’s another type of warranty coverage--called the extended warranty--that is aggressively marketed by many car dealers because it usually is very profitable for them. That’s because, like any other insurance, a warranty represents a gamble--the seller betting that the buyer won’t have to use it and the buyer seeking peace of mind and insurance against out-of-pocket costs if a major problem develops.

Car makers say that fewer than 10% of all new vehicles these days ever need to be repaired under the basic warranty.

“As long as a warranty doesn’t cost you anything extra, it’s never a waste of money,” said Penske’s Roberts. “But when you have to pay, you need to be very careful. Read the fine print to be sure you’ll be able to use the warranty in a sensible manner.”

Extended coverage is offered by many major auto makers, but a number of independent warranty firms sell it too.

Buyers should find out who stands behind the extended warranty and just what it covers before agreeing to purchase it, experts say.

Auto Club engineer Mazor says extended service plans represent a form of gambling.

“The odds are you won’t use it much,” he says. And that will mean a profit to the policy provider. “But if you have a major component failure during the life of that warranty,” he says, then it could turn out to be a good buy.

On the used-car side of the lot, the warranty picture is different.

Most car makers now sell late-model used cars that they’ve taken back from lease customers or rental fleets. These are often covered by whatever remains of the original warranties.

Also, in certified used-car programs from manufacturers or dealers, there often is a warranty that works much like new-car coverage, although for a much shorter time.

A limited used-car warranty generally means that only a few key specified components are covered, often for just 30 or 60 days. And, of course, used vehicles sold “as is” carry no warranty at all.

Federal law requires dealers to make available to a prospective buyer a full copy of any warranty, whether the vehicle is new or used.

And, of course, you must do your part by reading the warranty carefully and following service schedules. Otherwise, you risk voiding the coverage.

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Freelance writer Marry Sorensen can be reached at Highway1@latimes.com.

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What’s in a Warranty

Cars and trucks come with a sometimes bewildering array of warranties. Used cars can come with full or limited warranties or be sold “as is,” which is legalese for no warranty at all. The extent of coverage, and the duration, vary from auto maker to auto maker. Understanding which warranty does what, and for how long, can help car shoppers make informed decisions and protect themselves from expensive repairs.

Whole car coverage:

Basic

The standard new-car warranty covers every component against defects. Terms vary from two years or 24,000 miles to 10 years or 100,000 miles, but most are in the three- to five-year range. Brakes are covered against defects but almost never against wear, and other routinely replaceable parts such as windshield wiper blades and oil filters usually are not covered.

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Rust and Corrosion

A standard warranty provided by every auto maker, this covers the vehicle against decaying sheet metal, usually for five to seven years (VW and Audi stretch it out to 12 years). Providing invaluable peace of mind to residents of snowy climes where corrosive rock salt is used on the roads to help melt ice, it is rarely invoked in California.

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Powertrain

Although powertrain or drive train coverage is included as part of the basic warranty by all auto makers, some now are providing extended coverage at no extra cost. The leader is Isuzu, with a 10-year, 120,000-mile powertrain warranty on cars sold in the U.S. Principal items covered are the mechanical engine components, transmission or transaxle, and differential. Some also cover steering system components.

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Emissions

Federal law requires all auto makers to warranty a vehicle’s emissions systems for three years or 36,000 miles years. In California, stricter rules override the federal standard and require a three-year, 50,000-mile basic emissions system warranty, with coverage extended to seven years or 70,000 miles for parts such as catalytic converters, which cost more than $300 to replace.

Sources: Automobile Club of Southern California; California Air Resources Board; J.D. Power & Associates; Penske Auto Centers; Santa Margarita Ford.