Yes, Factory Warranties Are Becoming Shorter

A factory warranty is a promise to act in good faith by dealerships and car manufacturers. Despite this, many dealers are now getting out of this promise faster and faster. Although factory warranties are a great deal of help and peace of mind to car buyers, they are beginning to get shorter.

What is A Factory Warranty?

A factory warranty or manufacturer’s warranty is the guarantee from an automaker that they will take on the repairs of a new car if issues arise or something needs to be fixed. This warranty lasts for a definite amount of time depending on the brand of your vehicle. A typical new car’s factory warranty covers 3 years/36,000 miles. So during this time if there are any issues with your new vehicle the manufacturer will take on the costs and repairs if it is within either of these ranges.

Reasons Warranties Are Becoming Shorter:

A Hurry to Ditch Liability

The most well-known reason warranties are becoming shorter is due to manufacturers wanting to ditch liability on their part as quickly as possible. The more time a factory warranty is in effect, the more time the manufacturing company has to honor its agreement. By shortening the warranty time, the automakers are quickly taking all risks and liability out of their hands.

Bare Minimum Coverage

Automakers want to make sure that the coverage they promise only covers the bare minimum need of the average driver. There are formulas and calculations done by companies to determine the average number of miles a person drives and the wear and tear of each brand’s vehicle. With this, these auto companies can determine what they believe is the adequate amount of time/mileage that they should take responsibility for.

Car Repair Costs Are Increasing

The cars of today contain so much modern technology that repairing them is not as easy as it once was. With high-tech features such as rearview and front-facing cameras, advanced computer systems, self-driving, and more, fixing a car today can be double what it was 20 years ago. Along with the cost to repair the tech, the physical materials of cars can be expensive as well. Even simple body damage from a fender bender can be expensive.

Push to Extended Warranty

Another reason factory warranties are becoming shorter is the desire to push buyers to purchase extended warranties. Car dealers not only sell cars but also sell extended auto warranties as well. When a customer agrees to purchase an extended warranty from a dealer with their new car, the dealer and the dealer’s extended warranty providers make money. Along with the profit from the sale, all repairs will typically need to be made at the dealership which puts money back in the dealer’s hand. In essence, this shortening of the factory warranty encourages people to pay more for extended warranties in-house with car manufacturers.

But Do I Have to Purchase the Manufacturer’s Extended Warranty?

You do not have to purchase the manufacturer’s extended warranty and can often find a cheaper option at third-party warranty providers. There are fantastic third-party options out there that can also vary greatly depending on the manufacturer of the vehicle. An extended warranty for a European luxury car can differ from an extended warranty for an American counterpart such as Cadillac. However, no matter what you drive, these all have the potential to provide better protection than what the manufacturer may offer.