When you purchase a new car, by law it automatically comes with a factory warranty. Many reputable used car dealers also include a warranty with the purchase of a used car. The length and scope of new car warranties has continued to grow steadily year by year. It could be that manufacturers have gained confidence in their cars or it could also be that new car sales numbers are influenced by the length of the warranty. I would guess a little of both but probably more of the latter than the former. Back in the good(?) old days a 12 month or 12,000 mile warranty was all you got, and it was rarely mentioned because that’s what every new car came with. The limits on factory warranties have been steadily climbing ever since. Currently, General Motors and Hyundai both offer a 10 year or 100,000 mile powertrain warranty. These are exceptional warranties but the grand daddy warranty of them all has got to be The Chrysler Group, any new Dodge, Chrysler or Jeep vehicle purchased after July 26, 2007 will come with a lifetime powertrain warranty, you read that right—lifetime.

What Does a Warranty Cover, What Does “Lifetime” Actually Mean, How Can They Do That?
In its origins a warranty was basically a guarantee from the manufacturer that your new car would not fall apart as you drove it off of the dealer’s lot. That may sound funny but if you were around “back in the day”, you know that it actually happened. A new car warranty covers any defects in materials and workmanship for a period of time and distance, whichever is exceeded first. A “lifetime” warranty is an interesting proposition indeed, whose life is it based upon, yours or the cars? I’m not trying to make a joke here, interestingly enough; the warranty is only extended to the original purchaser/lessee so it does appear that if you die so does your cars warranty…! The warranty is also non-transferrable, so it has zero resale value. If you sell your car before 3 years then the new owner gets the old standard 3yr/36,000mi warranty. The average new car buyer rarely keeps their new car for more than 5 years; we get bored and have to get the latest thing out. A new car bought today, properly maintained rarely has serious catastrophic failure within those 5 years, so manufacturers are not really risking all that much. Who do you know that is still driving the same car that they bought new over 5 years ago? Also most leases don’t go more than 3 years anymore so that person is never going to collect. When all is said and done, a lifetime warranty will do much more to spur sales than increase warranty repair costs. The buyer probably won't gain mych either. However a lifetime warranty would be an excellent warranty for a person who drives 100,000+ miles per year. I can’t wait to hear how this turns out for Chrysler. I suppose that if the manufacturer dies as a result of a million cars needing free major repairs, then that would also be the end of the lifetime warranty. This might be fun to watch, stay tuned.

So Can I Just Buy a New Car and Drive It Until It Breaks and Then Get a New One?
Car companies are pretty savvy; they have been doing this for a while. A long warranty period sounds good but realistically if you maintain your car properly, and by that I mean by the service manual, it is actually unlikely that you will need to have any major warranty repairs done. They’ve kind of figured all of this out before hand and that’s the reason that they created the service intervals in the first place. “They don’t make them like they used to”, is an old and once overused cliché from the good old days. I’m not sure how to interpret that statement anymore because actually, they don’t make them like they used to, they make them better than they used to. Manufacturing technology and skill has never been better; it has grown exponentially, as has the science of metallurgy and the Computer Numerically Controlled (CNC) machinery that is in place to make car parts, like engines and transmissions. The modern car machine factory consists of entire robot operated flexible machine tool lines that don’t make mistakes, get tired or lazy. Most of the parts are not touched by human hands until the final assembly line. Of course things can and occasionally do fall through the cracks but other than normal wear parts like brakes and windshield wipers. If there's a failure it will happen right away. So, if your car makes it through the first 6 months or 6,000 miles, it probably will be fine for the next 5 years.

What About Extended Service Contracts?
Whatever you do, please, please, please resist the urge to buy one of these “service contracts” from your dealer or from anyone that calls you late at night, never ever buy into one of these, it is a multi-billion dollar scam and I fell for it once from a Dodge Dealer no less. It is NOT A Warranty that they are trying to sell you in these scams, only the original equipment manufacturer can warrant your car in any way whatsoever. An extended service contract is nothing more than an insurance policy usually from a small unadmitted underwriter, which basically states that if a precisely described event does occur, then the insurer will pay a previously stated amount for a stated repair using a particular type of part or parts, to be determined at the sole discretion of the insurer. Yup, that's exactly how it happened to me, they actually refused OEM parts and then shopped around for the part. If you are indeed unfortunate enough to fall for one of these scams, like me and actually read the fine print you will discover that among other things you must keep to a very strict maintenance schedule, as provided by them and provide all receipts if a “loss” occurs. The repairs will be done with parts supplied by the insurance company, no high quality OEM parts will be used, they might even be used or "refurbished" parts, and you can’t complain, see it’s right there on page 8, paragraph 9, and fourth line down. These scammers make money because they know that 5 years after you bought your new car from the dealer you either sold your car, lost the original paperwork, forgot about it, or you have missed one or more requirements as listed on your contract. The guy in the dealers finance department gets a huge commission for selling these scams and if you sign up and it gets tacked onto your loan, then you will even get charged interest on the money that pays for this service contract for the term of your loan, and that really nice, fast talking finance guy won't say a word either...!

Maintaining Your Car is Better Than Any Service Contract Available
Maintaining your car properly is much less expensive than a service contract but even if you are lazy like me, you actually have no choice anyway because, every service contract out there has a strict maintenance clause which must be followed. In the event of a claim you must provide those receipts stating mileage and service intervals as performed. If you can't they laugh and say sorry (sucker). They do this because they know that if service is accomplished at the proper intervals you car is far less likely to break down. Extended Service Contracts are one of the largest and fastest growing scams according to USA Today, very interestingly as I was writing this article, right in the middle of it, I got an automated telemarketing call from a company attempting to sell me an “Extended Service Contract”, I am not kidding folks, O-M-F-G, Now how Ironic is that S...?