Car Warranty VS Car Insurance: Knowing the Difference

When you purchase a car, most of the time you are offered a car warranty. A car warranty will cover specific problems with your car – like a mechanical failure, electrical failure, things like that. This is separate policy than your car insurance, and usually quite a different type of protection.

When you are buying a car, it’s important to know the difference between a warranty and insurance. They both can help protect you, however, the difference is the kind of protection each offers. 

A warranty usually will cover those mechanical breakdown for parts and labor, including malfunctions due to defects or issues with the parts. Car insurance will usually help pay for repair if it’s damaged by a collision or another type of cause, such as vandalism, theft, fire or flood. 


There are different types of warranties: there are new car warranties, used-car, and extended warranties; some of these can be purchased directly from the manufacturer, others are third-party warranties. 

A new car warranty, is the manufacturers promise that they will help pay or completely pay for replacement parts and specific covered repairs during a certain time (the ‘warranty period’). Usually the new car warranty is included in the purchase price of your vehicle. Most warranties will last anywhere from 3 years and 36k miles, or 10 years and 10k miles. Some factory warranties will apply to certified pre-owned vehicles as well. These warranties usually vary from company to company, so be sure you know what you are purchasing.

New car warranties usually consist of 2 parts:

“Bumper-to-bumper’ coverage, which includes things like the electronics, AC and heating system, etc. Warranties usually do not include regular wear and tear like tires, or brakes, things like that.

“Power Train” coverage will usually cover the car’s engine and transmission.

Sometimes you can purchase an extended warranty in addition to the new car warranty, or sometimes even an additional warranty to your used car through the manufacturer or even a third-party. Most warranties do require you to pay a deductible before they will pay out for repairs: or some will require you to pay for labor and they pay for parts ,etc. This is why it’s super important for you to read your paperwork thoroughly. 

No matter what type of warranty you have, remember you still need to keep up with routine maintenance on your vehicle. Usually to keep your warranty in force, you have to keep up with the required maintenance recommended by the manufacturer in order for the warranty to be valid.



As I mentioned, car insurance will usually pay for repairs/damages done due to a collision or other things like a fire, flood, vandalism, etc.  Unlike  a warranty insurance won’t usually cover mechanical or equipment breakdown unless it was a direct result of an accident or natural disaster type of incident.

Car insurance can actually help cover more than just damage to your car: These are the types of coverages that are available for your car insurance policy:

LIABILITY INSURANCE – covers damages to property, and medical bills caused by an accident where you are at fault.

COLLISION COVERAGE – If your car is damaged due to a collision with another vehicle, this coverage helps pays for the repairs due to the collision.

COMPREHENSIVE COVERAGE – Helps repair or replace your car if its damaged due to: theft, fire, flood, vandalism, hitting an animal, or a flying/falling object.

UNINSURED/UNDERINSURED MOTORIST COVERAGE – This coverage could help you if your vehicle is damaged by a driver with no insurance, or very low coverages.

MEDICAL PAYMENTS COVERAGE – If you or a passenger is injured in an at fault car accident, medical payments will pay for emergency room, hospital stay, and doctor visits.

If you have  questions regarding your warranty, be sure to reach out to the manufacturer, and with your insurance, you can reach out to your agent!

This post is sponsored by Falls Motor City.



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