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Auto Warranty Terminology

Definitions


Administrator
When referring to extended vehicle warranties and service contracts, this is the company or people that will
be responsible for the day-to-day operations necessary to fulfill the warranty or contract agreement.


Basic Warranty
Also called the manufacturer warranty this warranty generally covers everything but wear (tires, brake pads)
items and maintenance (oil, spark plugs, filters) under normal use and maintenance. These warranties are
typically limited to a certain period of time (3 to 5 years) and/or mileage (36,000 to 60,000 miles)


Certified Car
These cars are used vehicles that have been inspected and, in most cases, reconditioned by the dealer or
manufacturer for re-sale.


Claims Reserve Accounts
These are the funds that a vehicle warranty provider sets aside for the payment of current and future repair
claims. This fund is a vital component to the stability of a provider as it indicates the company's ability
to pay claims.


Consumable Items
Items that are not typically covered by a vehicle warranty due to the intended nature of these items to be
frequently replaced. These include, but are not limited to, oil filters, windshield wiper blades, power steering
fluid, transmission fluid, tiresand air filters.


Corrosion Warranty
Often offered in cold climates or areas with harsh environmental conditions, corrosion warranties are meant to
protect vehicle owners from the cost of repairs associated with corrosion of the vehicle's exterior.


Deductible
The portion of any auto warranty plan that the member must pay out-of-pocket as part of any repair. Warranty
plans offer a variety of deductible options to fit your needs. The deductible is paid per visit, even if there
are multiple repairs.


Drive Train/Pwertrain
This is the mechanical system that transmits power from one place to another. The drive train (also called
the powertrain) includes the running belt, drive belt, rollers, and motor. An autos transmission is part of
the drive train because it transfers engine power to the wheels.


Emissions Warranty
8 year/80,000 mile warranty coverage for the catalytic converter, electronic emissions control unit and
onboard diagnostic device.


Extended Warranty
Any warranty or service contract that is in effect past the expiration date of the original manufacturer.
Extended warranties can be offered by the original manufacturer or by a third-party extended vehicle warranty
provider.


Exclusionary Coverage
An extended auto warranty plan that offers comprehensive, bumper-to-bumper style coverage in which it is shorter
to list the items not covered (excluded) by the warranty than it would be to list the thousands of items that are.
These are the preferred extended auto warranty plans and are far superior to named component extended auto
warranty coverage.


Maintenance Guidelines
These are the specifications set forth by each manufacturer on the proper care and maintenance for a particular
vehicle. These include recommendations on fuel grade, oil weight, tire pressure, and dates or mileage for
regular tune ups or engine maintenance.


Manufacturer Warranty
Also known as the original vehicle warranty, this is typically a bumper-to-bumper warranty in which the manufacturer
pays for the cost of any covered repair or replacement. These warranties are typically only valid at dealer or
manufacturer service centers.


Named Component Coverage
A lower level of extended auto warranty coverage that pays for claims to certain named components only. The list of
covered components often does not cover all essential systems and neglects many of the items routinely covered by
exclusionary coverage.


Powertrain Warranty
This type of warranty protects vehicle owners from the expense associated with a repair or replacement of the main
mechanical systems that power the vehicle (see Drive Train). Manufacturers often offer a powertrain warranty in
addition to a manufacturer warranty.


Repair Facility
Any ASE-certified mechanic, ASE-certified body shop, auto dealer service center, national chain service center,
or other auto maintenance facility.


Rental Benefit
An allowance provided as part of some extended car warranty plans that either pays for or reimburses a covered
vehicle for rental car coverage based on the time needed for the repairs.


Roadside Assistance
An additional benefit offered as part of some extended vehicle warranty plans that gives covered members access to
towing, emergency gas, flat-tire service, lost keys service that can be administered from the side of the road.


Transferability
The ability of a policyholder or extended vehicle warranty member to transfer coverage from themselves to another
person. In the case of extended warranties, the coverage must remain on the same vehicle, but the named member
can be changed should the vehicle be sold to a new owner

Travel Interruption Benefit
An allowance provided as part of some extended car warranty plans that is meant to pay for or reimburse costs
associated with a trip that cannot be completed due to a covered cause. This typically includes hotel fees,
airline fees, or lost deposits. Travel Interruption Benefits are often limited to a certain dollar amount or
may be available only for specific types of claims.


Wear-and-Tear Coverage
Wear-and-Tear coverage provides a broader contractual definition of what will be covered by an auto extended
warranty.



Websites with Additional Auto warranty/Service Contract Information

Do you want an extension with that auto warranty?
http://www.nytimes.com/2006/05/28/automobiles/28WARRANTY.htmlex=1306468800&en=83131ed44bed6914&ei=5088&partner=rssnyt&emc=rss


How will the GM and Chrysler restructuring affect their auto warranties?
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/17/AR2009021702998.html


Practical advice about car warranties
http://www.cnn.com/2008/LIVING/wayoflife/12/26/aa.car.warranties/index.html


Auto warranty advertising and marketing issues
http://www.msnbc.msn.com/id/23147777/


Learn how to choose the best auto warranties/service contracts
http://www.huffingtonpost.com/steve-parker/auto-warranties-----avoid_b_225804.html

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