Hype alert: The real 'Best new car warranty'

Car companies tout some amazing-sounding warranties, but look deeper and they're mostly not so amazing.

By Peter Valdes-Dapena, CNNMoney.com staff writer
October 3 2007: 3:13 PM EDT


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 purchase.

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 most brands.

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 think about.