What is Bumper to Bumper Insurance?
When purchasing a new vehicle, you might see bumper to bumper insurance included with the vehicle. This type of insurance is also referred to as the vehicle’s factory warranty, new vehicle limited warranty, or comprehensive coverage.
The factory warranty covers any damage or repairs from and offers additional warranties for areas such as the drivetrain, powertrain, roadside assistance, rust and corrosion. While three-year bumper to bumper insurance has been the standard, many dealerships also offer coverage up to 36,000 miles, whichever comes first. Some manufacturers have extended the coverage for a new vehicle to five, even six, years.
The extended time for bumper to bumper insurance protection is not only a selling point for dealerships, but it also supports how the vehicle is rated for reliability. Reliable vehicles usually have a long manufacturer’s warranty.
Chevrolet, Ford, Honda, Nissan, and Toyota offer three years and 36,000 miles coverage, while BMW and Land Rover offer four years and 50,000 miles coverage. Finally, Hyundai and Kia offer five years and 60,000 miles coverage.
Difference Between Bumper to Bumper and Powertrain Warranties
While the bumper to bumper warranty and the powertrain warranty function as a partnership, each covers separate components. As noted, bumper to bumper covers any repair from the front to the back whereas the powertrain warranty specifically covers the drivetrain, transmission, and engine.
Areas Not Covered and Covered by Bumper to Bumper Insurance
There are exceptions to bumper to bumper insurance coverage, such as routine oil changes, replacing worn out tires, tire rotation, replacing worn windshield wipers, and brake pads. Generally, the standard warranty has been for a three-year term.
Other areas where the owner is responsible for out-of-pocket repairs include:
- Accidental damage
- Body panels
- Brake lights
- Collision damage
- Interior trims
- Paint
- Regular maintenance
- Turn signals
- Oil filters
- Lenses for headlights and taillights
- Dents and dings
- Repairs as a result of little to no maintenance
- Normal wear and tear
- Repairs as a result of bad weather
- Personal modifications to the vehicle
Areas that may be covered with bumper to bumper coverage include:
- Braking
- Electrical
- Fuel systems
- Heating and cooling
- Steering
- Suspension
Some manufacturers enhance the coverage with extra perks. Examples include Honda’s bumper to bumper coverage that includes Honda Care Sentinel, or Chevrolet’s coverage for hybrid models.
Disadvantages of Bumper to Bumper Insurance
There are limitations with bumper to bumper insurance that make the policy null and void. The following circumstances may invalidate your coverage:
- The vehicle is more than five years old
- Oil leakage that results in engine damage
- Normal wear and tear
- Using a private vehicles for business
- Uninsured motorist
- DUI
- A driver who does not have a valid driver’s license
- The vehicle is used for illegal purposes
- A claim is not submitted in a timely manner
In any case, deductibles must be paid by the insured.
Benefits of an Extended Warranty
When a new vehicle is purchased, bumper to bumper coverage is automatically activated, but it usually expires before the powertrain warranty, leaving vital components of the vehicle unprotected. An extended warranty offers coverage once the bumper to bumper or powertrain warranty runs out.
Since a vehicle’s reliability plays a role in the length of a warranty for some manufacturers, having an extended warranty provides for those manufacturers providing a shorter coverage time security and peace of mind for those purchasing a vehicle. Sites such as Consumer Reports and J.D. Power are a good source for checking reliability ratings for specific manufacturer’s models.
With an extended warranty, you may have access to additional benefits such as discounted towing, round-the-clock roadside assistance, and a reduced cost when a rental vehicle is needed.
Another benefit of an extended warranty is it is available from third-party, independent, and aftermarket providers as well as the dealership. The cost and flexibility of the coverage offered by some third-party companies can be competitive when compared to the dealership’s. Purchasing coverage from a company other than the dealership gives drivers more room to negotiate pricing instead of settling for the mark-up in costs from a dealership. Doing so also eliminates interest on the coverage unlike dealership’s policy, which may be included in the loan and financing for the vehicle.
With a third-party provider, purchasing an extended warranty is possible for most vehicles, including certified pre-owned and used models and vehicles with significant mileage. When purchasing from a dealership, on the other hand, an extended warranty may be only available while the bumper to bumper insurance is active for a new vehicle.
It is possible that the dealership where you are purchasing your vehicle offers third-party warranties. These warranties may cost less but can sometimes by inconvenient. If you purchase a third-party warranty through the dealership, you might have to pay for repairs out-of-pocket and then be reimbursed by the third-party company later on. For some drivers, the savings will be worth the hassle.
FAQs
Q. What is the best way to keep my warranty valid?
A. To prevent the warranty from becoming void, take your vehicle in for regular maintenance. Whether you choose to take your vehicle to the dealership or a third-party mechanic for repairs, keep the receipts for any work completed as proof of repair.
Q. Should I buy an extended warranty as soon as I buy a vehicle?
A. Something to keep in mind is the dealership may not inform you that an extended warranty can be purchased at any time as long as the factory warranty hasn’t run out yet.
Q. When is bumper to bumper coverage important?
A. Bumper to bumper coverage is important for almost any driver. If the car is new, is an expensive model, will be driven or is registered in an accident-prone location, the driver is inexperienced, or the person or persons with access to the car do not have a positive driving record, bumper to bumper insurance can come in handy in case of damage to the vehicle. Err on the side of caution, and always make sure you have this coverage.
Sources:
https://www.caranddriver.com/research/a31608083/factory-warranty/
https://www.caranddriver.com/research/a32766838/best-car-warranty-quick-comparison-guide/
https://www.motor1.com/reviews/403006/bumper-to-bumper-warranty/
https://www.carchex.com/content/bumper-to-bumper-extended-warranty
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