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Common auto Warranty Terms

Basic Warranty: Terms established by each manufacturer to repair vehicles within a specified mileage and/or time period. All factory-installed and some dealer-installed parts are covered under this warranty.

Bumper-to-Bumper Coverage: The most comprehensive warranty coverage available. Because the coverage is so comprehensive, it lists the few parts not covered. This coverage is similar to the manufacturer's warranty. It is also called an exclusionary policy.

Certified Car: Many used cars sold by dealers are certified by the manufacturer. This means they have undergone an inspection process prior to sale. Frequently, a limited powertrain warranty is included with the vehicle. They typically do not include an extended or a bumper-to-bumper warranty. There is no industry standard for certification of vehicles.

Claims Reserve Accounts: An account that the administrator or insurer maintains to pay future claims
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Consumable Items: Parts such as tires, batteries, clutch plates, and wiper blades that are not covered under a warranty.

Corrosion Warranty: A portion of the original warranty on new vehicles which covers rust on sheet metal. Extended warranties do not include coverage for corrosion.

Deductible: The amount the vehicle owner pays the repair facility when the vehicle is being repaired. Many plans include a zero deductible option.

Drivetrain warranty: See powertrain warranty.

Emissions Warranties: The Federal Emissions Warranty is based on federal regulations and applies to vehicles in all 50 states. There are two types of emissions control system warranty: an Emission Defect Warranty and an Emissions Performance Warranty.

Exclusionary Policy: Also known as a "bumper to bumper" policy. This policy lists components of your vehicle that are not covered under the warranty. Any part or component that is not listed as excluded is covered under an exclusionary policy. This coverage is similar to the manufacturer's warranty.

Extended Warranty: A contract that protects the car owner against mechanical failures and breakdowns. Extended warranties are also referred to as Vehicle Service Contracts. This warranty will pay for covered repairs after the manufacturer's warranty has expired.

Gray Market Vehicle: A vehicle not manufactured for retail sale in the United States. Gray Market Vehicles often do not meet U.S. standards and include no manufacturer warranty. These vehicles are normally ineligible for extended warranties.

Inclusionary Policy: Policies that list the components and parts that are covered by the extended warranty. If the component or part is not listed, it is not covered. This is also called the “stated component coverage”

In-Service Date: The date the vehicle was purchased by the original owner or the date the vehicle was placed in use for rental, demonstration or other purposes.

Insurance Company: The company that issues an insurance policy and guarantees the obligations of coverage under the service contract or mechanical breakdown policy.

Lemon Law: A Lemon Law vehicle is a vehicle with a major, repeat problem that has been repurchased by, or had its purchase price renegotiated with, the manufacturer. The state earmarks these as Lemon Law or Buyback Vehicles. These vehicles are not eligible for coverage.

Maintenance Guidelines: Normal, routine maintenance recommended by the manufacturer of your vehicle. These include oil changes, tune-ups, checking fluid levels, tire rotations, wheel alignments, belts, and hoses. Please refer to your owner's manual for complete maintenance guidelines.

Manufacturer's Warranty: This is the standard warranty included by the manufacturer with every new vehicle. The most common standard warranty term is 3 years or 36,000 miles. Check your manufacturer's warranty manual for complete warranty information or contact your vehicle's manufacturer at the telephone number shown on our Manufacturer's Warranty page.

Mechanical Breakdown Insurance (MBI): An insurance policy or agreement that undertakes to perform or provide repair or replacement service, or indemnification for that service, for the operational failure of a motor vehicle due to a defect in materials or skill of work or normal wear and tear, and that is issued by an insurance company authorized to do business by the state department of insurance in which it is sold or issued. A mechanical breakdown insurance policy (MBI) is an insurance product. Like personal auto or homeowners insurance, the MBI creates a direct relationship between the insurance company and the vehicle owner. MBI coverage and premiums are regulated by the Department of Insurance, assuring a fair price for the coverage is provided.

Power Train Warranty: A very limited warranty from the manufacturer that covers specific parts of your vehicle's engine, transmission and drive train assembly. If any of these components fail while the vehicle is covered under the term of the powertrain warranty, the manufacturer is responsible for the repair. These warranties cover about 25% of the vehicle.

Rebuilt Title: See Salvage Title.

Rental Benefit: The amount you will be reimbursed for actual expenses incurred for substitute transportation arranged through a rental agency while your vehicle is being repaired.

Repair Facility: A licensed repair facility located in the United States or Canada. This would include your dealership, local mechanic, or national repair facilities.

Roadside Assistance: A program that provides you assistance when your vehicle breaks down or when there is a vehicle emergency (towing, battery assistance, flat tire assistance, emergency lock out, or fuel, oil, fluid, and water delivery). Our programs always includes free roadside assistance benefits for the full term of the warranty.

Salvage Title: A title issued on a vehicle when an insurance company has declared the vehicle a total loss. These vehicles may have been involved in a flood or severe accident. Vehicles with salvage titles are not eligible for extended warranties.

Transferability: A vehicle having an extended warranty can have the warranty transferred from the original owner of the warranty to the new owner of the vehicle, if the vehicle is sold privately, for a modest fee. The extended warranty cannot be transferred to a dealer.

Travel Interruption Benefit: If your vehicle becomes inoperable and you are more than 100 miles from your home, this is the amount you will be reimbursed per day for restaurants and lodging expenses you incur should the repairs to your vehicle delay your trip for more than one day.

Vehicle Identification Number (VIN): The VIN is located in several areas and is a unique 17-digit identifier of your vehicle. The most common locations are on the driver's side dashboard of your car, on a sticker inside the driver's side door, on the vehicle's registration card, on your insurance card, or on the title to your vehicle.

Wear-and-Tear Warranties: Wear and tear warranties provide coverage beyond total mechanical breakdown. Under these warranties, your vehicle is covered for parts that break, as well as those that have worn beyond the manufacturer's tolerances.What exactly is covered? Know what's covered -- and what's not covered -- by the extended auto protection plan
you're considering. Does the service contract cover breakdown as well as wear and tear? Under a "breakdown" warranty, coverage is extended only to parts that break. Such a policy can prove less inclusive than is desirable, since not all parts fail due to breakage.

Some need to be replaced because they've worn down over a period of time; a "wear-and-tear" extended protection plan extends coverage to worn-down parts in need of replacement. Repairs due to wear and tear are not usually covered. For example, if the window stops functioning properly, or problems arise with the vehicle's engine, the extended auto protection plan will cover the repair cost. On the other hand, brakes and tire repairs would be considered normal wear and tear, and not covered by the policy.

Each extended auto protection plan is different. Thus, buyers must read the contract carefully and ask questions.

So you better understand "all" your options we recommend you contact an specialist today and get the facts. The consultation is free.