Hype alert: The real 'Best new car warranty'
NEW YORK (CNNMoney.com) -- Chrysler recently instituted a "lifetime" -
yes, your lifetime - powertrain warranty for its Chrysler, Dodge and
Jeep vehicles. If you're shopping for a car and comparing warranty
coverage, "lifetime" sounds tough to beat.
But when you break down the numbers in light of how long most people own
their cars, most warranties, including Chrysler's, end up being pretty
much the same as their competitors.
The exception are Hyundai and its Korean sister-brand Kia. Hyundai made
a splash in 1999 when it introduced a 10-year, 100,000 mile powertrain
warranty. Of all the major non-luxury car brands out there, Hyundai and
Kia are still the only ones with a warranty package that's materially
better than the rest.
Chrysler's lifetime powertrain warranty sounds awfully good, though. If
you have a problem with your car's engine or transmission for the entire
time you own that vehicle, however long that might be, it's covered.
That is, as long as you remember to have the vehicle inspected at the
dealership every five years within two months of the anniversary of your
If you sell your car all bets are off. Chrysler's warranty is not
transferable to a new owner.
Hyundai's powertrain warranty is still 10 years or 100,000 miles,
whichever comes first, but it's not fully transferable to a new owner,
either. Once the car is sold, the coverage stops at five years or 60,000
miles from when it was sold as new.
General Motors' five-year, 100,000 mile powertrain warranty is fully
transferable to a new owner. And so are the five-year, 60,000 mile
warranties offered by Toyota, Honda and Ford. But since most drivers put
about 12,000 miles a year on their cars, the extra 40,000 miles on GM's
warranty is largely a matter of showmanship.
A transferable warranty is important to a new owner, because it could
make the car worth more when it's sold.
Care to guess when most people get rid of a new car, though?
According to J.D. Power and Associates, five and a half years after they
buy it, on average. That means only a little bit of the five years, if
any, will really transfer to a new owner, anyway.
So, if you just look at powertrain warranties, they don't make much of a
difference as far as the typical owner is concerned. If you're the
"drive it till the wheels fall off" type, the Hyundai warranty is better
and the Chrysler warranty possibly better still.
It's when you look beyond the powertrain warranty that the differences
really show. Or, we should say, the lack of any real difference among
While the powertrain warranty covers, arguably, the most important parts
of a car - the engine and transmission - those are also the parts that
are least likely to give you trouble.
Thanks to improved engineering and quality, modern automobiles, even
those from manufactures with poor records for reliability, can generally
go 100,000 miles or more without major engine or transmission problems.
Not that there aren't occasional lemons that find their way off the
assembly line. But chances are slim that you'll get a defective car with
engine or transmission issues that take longer than five years to show up.
In today's cars, complex electrical systems are more likely to give you
trouble than major mechanical parts. Those sorts of things aren't
covered under a powertrain warranty no matter how long it is.
All those other items are covered under the "basic" warranty. That
warranty - also called the "bumper-to-bumper" warranty - covers
everything in the car with a few exceptions. (Things like tires, that
one would expect to wear out, are covered under their own warranties.)
Chrysler, GM (Charts, Fortune 500), Toyota (Charts), Ford (Charts,
Fortune 500), Mazda and Nissan all offer a 3-year, 36,000 mile basic
warranty - no difference there at all.
Hyundai and Kia offer a 5-year, 60,000 mile bumper-to-bumper warranty.
That's two years longer than any of the others and as long as most
companies' warranty on the powertrain alone.
They also offer roadside assistance for five years, as does GM, and rust
protection for seven years, which is two years longer than most others
(it's one year longer than GM).
No one should ever buy a car for the warranty alone, but if it is a
consideration for you, look past the hype and think about real cars and
real life. If you do that, it turns out there really isn't that much to