Both your car warranty and car insurance can be used to cover repairs, but there are major differences in how each is applied and what situations are covered. Understanding the difference between the two can help you make the most of a newer purchase. Here’s everything you need to know.
There are two main types of warranties that come with buying a car from a dealership. Each and every warranty will be different depending on the model, the manufacturer, and any current deals going on. There are also extended warranties that simple prolong the benefits of any package.
What your warranty covers depends on the type you have. If you bought your car brand-new, then you have a manufacturers or factory warranty. This is a promise from the company, stating that they will help pay for replacement parts and covered repairs during the warranty period.
How long that coverage lasts depends on the manufacturer’s offering. Some offer a three-year/36,000-mile package, while others go all the way up to 10 years/100,000 miles. Regardless of the years or mileage, your vehicle is covered by whichever of those two comes first. Electronics, the engine, and the transmission are typically covered.
In some cases, a factory warranty can apply to used cars. These are classified as certified pre-owned models, which have been certified by the company. Despite these warranties, it’s always in your best interest to thoroughly inspect the car before you need a Los Angeles lemon law attorney since some damages and defects may not be covered.
Regardless of the type of warranty you have, you’ll still need to take good care of your vehicle. Regular wear and tear is never covered, which includes things like missing oil changes. Take the time to go over the warranty with the salesperson to understand all of the ins and outs.
Warranties do not cover accidents, just defects and unforeseen issues. Insurance, on the other hand, protects your purchase in the event of a collision, fire, theft, and more. There are also various types of insurance, often bundled into one package.
Liability coverage is the first type, which helps pay for medical bills and property damage caused by an accident when you are at fault. Collision coverage pays for repairs in any accident. Comprehensive coverage makes sure you’re financially compensated from fires, theft, vandalism, and random accidents such as hitting a deer.
There’s also uninsured/underinsured motorist coverage. This just makes sure you’re not left with the bill if the driver who caused the accident doesn’t carry insurance or doesn’t have enough to cover the full costs of the accident.
Some insurance plans come with medical payment coverage for ongoing hospital or treatment bills, and others offer personal injury protection (PIP). PIP helps pay for medical bills as well and is considered a no-fault form of insurance. However, PIP is not available in all states.
The Main Difference
When you break it down, your warranty is there to ensure your new car runs as smooth as possible while your insurance protects you financially in the event of an accident. Both are absolutely necessary for any driver, with some states requiring both legally. Now that you know the difference, you know who to call when something goes wrong.