Is There a Deductible With New Car Warranties?

Your new car warranty should cover major repairs.
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Buying a new car provides a sense of security because you are dealing with brand new parts that shouldn't break down. When the car does break down under warranty, you simply take it to the dealership and it is fixed at no cost to you, right? Not always. Some warranties have deductibles written into them.

What's a Warranty?

New car warranties are typically provided by the manufacturer and managed by the dealership where you purchased the vehicle. Warranties vary widely on what they cover and do not cover. Some cars may have a 10-year, 100,000-mile, "bumper-to-bumper" warranty, while others may only cover major repairs. When you purchase your vehicle, ask about the warranty and what it covers. In addition, you generally have the option to purchase an extended warranty that will take over when the dealer warranty expires. With extended warranties, it is also important to get a written list of everything the warranty covers.

Follow the Rules

Many new car warranties have written rules about where your car has to be serviced. It will also detail the time frame for maintenance such as oil changes, timing belt replacement and other things that will extend the life of your vehicle. Though the warranty usually covers part of the expense to have these maintenance tasks performed, there is generally a deductible to go with them. For example, you may be required to pay a $50 to $75 deductible toward the cost of such maintenance before the work can be done.

Your Responsibilities

Some new car warranties cover listed repairs and maintenance with no deductible required. Most extended warranties require deductibles of varying amounts, depending on the repair needed and the age of the vehicle at the time of the repair. For example, if a brake job on your car costs $400 and the deductible is $50, you will pay the dealership $50 and they will bill the auto manufacturer for $350.

Look For the Best Deal

The warranty should be a consideration when you are car shopping. As you are negotiating sound systems and tires, be sure to ask about the warranty and deductible. A high deductible could be a deal-breaker, while a no-deductible or low deductible warranty can save you thousands of dollars over the first few years of owning the car.

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