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Extended Warranty Glossary

While going through the extended warranty of your car, you are likely to come across many terms which you are not likely to understand. Some such terms are:

Administrator – This is the company which will perform all the services that have been mentioned under the extended warranty contract. They will pay all the repair bills to the garage or the service center which completes the car repairs. The administrator will work in close coordination with the service center and make sure that all the claims are handled properly.

Basic Warranty – these are the specific terms which are laid out by each manufacturer with regard to repairing vehicles within a specific mileage or time period. Parts which have installed by the factory or the dealer will be covered under this.

Better Business Bureau – This is how consumers do their research and learn more about the company. The company should have a reputation of handling complaints in the right manner in order to be a part of the BBB online reliability program. They should also be a part of the BBB self-regulation program and also agree to follow the code of online business practice and agree to dispute resolution.

Bumper to bumper warranty – The parts which will not be covered under this warranty should definitely be listed. This kind of warranty has the most comprehensive coverage.

Certified car – Cars that are being sold or leased have to be certified by the manufacturer.This means that all the necessary inspections have been done before the car has been put up for sale. These cars will have a power train warranty. They might not have extended or bumper-to-bumper warranties. There are no specific standards for such vehicles to be certified.The dealers for such vehicles will add some extra cost.

Claims reserves account – this is the account into which all the claimed payments will be made.

Consumable items - tires, batteries, clutch plates and wiper blades are parts which will not be covered under any warranty.

Corrosion warranty – this covers rust which takes place on sheet metal due to perforation. This is a warranty on only new vehicles and this will not be found on extended warranties.

Deductible – This is the amount which has to be paid to the repair shop when the vehicle is taken for repair. Every extended warranty has many options when it comes to deductibles. They can be on a per visit or a per repair basis.

Drive train – These are those parts of the car which will transmit the power from the engine to the wheels. The clutch, transmission, drive shafts (or axle shafts in front wheel drive), U-joints and differential are the parts which perform this function.

Emission warranties – The guidelines for emission warranties are based on certain federal laws, which are applicable to all vehicles in all fifty states. Emission Defect Warranty and Emissions Performance Warranty are the two kinds of emission warranties. The performance warranty will be for three years or 50,000 miles depending on the state of residence. The defect warranty is generally the same as the bumper-to-bumper warranty and this runs for eight years or 80,000 miles.

Extended warranty – This is a contract which will protect owners of all vehicles against breakdowns and failure of car parts. These are also known as vehicle service contracts. This warranty will take care of the cost of all repairs once the warranty of the manufacturing company has expired.

Gray market vehicle – This is a vehicle which was not made to be sold in USA. They do not have the standards of other vehicles in the USA and they will not have a manufacturer's warranty. An extended warranty can be taken on them.

Inclusionary coverage – All the parts that are being covered under the extended warranty should be properly listed. Parts which are not on this list will not be covered.

In service date – This was the date on which the vehicle has been purchased and taken out of the dealer showroom or the date on which the car has been rented out.

Lemon law – This is a vehicle which has been having the same problem every time that it is being taken for repair. This has been purchased and repurchased and the price of the vehicle has also been renegotiated. Coverage cannot be given to these vehicles.

Maintenance guidelines – This is an ordinary routine maintenance which is being carried out on the vehicle. This helps to keep the vehicle in good condition. Oil changes, tune-ups, fluid level checks, tire rotations; wheel alignments, belts and hoses are some of the services offered here.

Manufacturer's warranty – This is the warranty which comes with every new vehicle that is being sold by the dealer. All the parts installed in the factory will be covered under this. The normal limit for a warranty is 3 years or 36,000 miles and 4 years or 50,000 miles.

Mechanical breakdown insurance – This is a contract where the repair of vehicles, the replacement of parts, indemnification and failure of the vehicle due to some defect will be covered by the insurance company.

Power train warranty – This is a warranty from the manufacturer which will cover only certain parts of the vehicle namely the engine, transmission and the drive train assembly. Failure of these parts will be covered under this warranty. Only 25% of the vehicle will be covered under this warranty.

Recall – Certain vehicles will be returned to the dealer after sale since they have certain basic mechanical issues or safety issues. The car manufacturing company under the control of the National Highway Traffic Safety Agency (NHTSA) does these recalls. Such repairs are done free of cost.

Repair facility – This includes the dealership, local mechanic or some national repair facility.

Rental benefit – This is the amount which has been incurred on transportation while the vehicle is being repaired.

Roadside assistance – A toll free number is provided where you can call anytime anywhere and get someone to come and repair your car when there is a breakdown or some other kind of problem like towing, battery assistance, flat tire assistance, emergency lock out, or fuel, oil, fluid and water delivery.

Salvage title – This is a title which has been given to a vehicle which has been named a total loss as per the insurance company. These vehicles would have been stuck in a flood or some other natural disaster and they will not come under extended warranties.

Technical service bulletin – This is a bulletin which has been brought out by the vehicle manufacturer and it tells all mechanics about certain repair problems and methods of repair and maybe some new service methods.

Transferability – When a vehicle having a warranty is sold, the warranty can be transferred to the new owner when the sale is private. It is not possible to transfer an extended warranty.

Travel interruption benefit – When the car suddenly stops on the road and you are more than 100 miles from your destination, the charges which are incurred will be reimbursed and this includes food and lodging.

Vehicle identification number – This is a 17 digit number which is specific to every car and this can be found on the title, insurance papers, vehicle registration card, drivers side of the dashboard and the sticker near the drivers side of the door.

Wear and tear – This is the maximum coverage which any vehicle can get. Mechanical breakdown is when the car breaks down due to some defect in the parts when it was being manufactured. Most warranties state that wear and tear of the parts of the vehicle will not be covered. Warranties which exclude wear and tear will not include repairs which take place due to parts getting worn out. Make sure that you find out exactly what are the terms and conditions of the extended warranty before buying it and see whether wear and tear is being included.

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