What You Need to Know about Million-Mile New Car Warranties

If you’re in the market for a new car, you may have come across a dealership advertising a million-mile warranty—and perhaps it was even offered for free. That may sound like a great deal, but it’s not necessarily a good reason to give your business to one dealership instead of another that’s not offering a super-extended warranty. The value of a million-mile warranty will depend entirely on your lifestyle, your plans for your new car, and how good you are at following rules.

Many dealers that offer these warranties provide them for free on every new car that rolls off the lot. But that’s not the only warranty your car will come with. Every new car sold in the United States has a factory-backed warranty that will cover repairs due to mechanical failures (so, not those necessitated by accidents or expected wear). These warranties vary by manufacturer, but the powertrain coverage tends to cover at least the first five years or 60,000 miles of your car’s life, and sometimes a lot more. By the time the original warranty runs out, plenty of owners are ready to sell or trade in their vehicle for something new. Million-mile warranties don’t transfer to the next owner, so you’ll be on to your next car and the dealer won’t have had to pay a dime for their extended warranty.

In the extremely unlikely event that you’re planning to keep your new car until the odometer rolls over, you’d better put those miles on quickly. Many million-mile warranties are actually 10-year or 1,000,000-mile warranties. That means you’ll need to drive 100,000 miles a year, on average, to make the most of them (most Americans drive more like 14,000 miles every year).

Assuming you are the very unusual person who drives almost 300 miles a day in a non-commercial vehicle and plans to keep that vehicle for 10 years, there’s still fine print in the average million-mile warranty that could leave you holding the bag for major repairs. First, like all car warranties, they only apply to specific parts. Dealers’ long warranties are typically limited to the powertrain (including the engine, transmission, and drive axle). And usually only certain parts are covered. For instance, it’s common for damage to the engine block or cylinder head to only be covered by a warranty if the damage was caused by the failure of a different, covered, part. And if you ever want to cash in on your warranty, you’ll have to religiously observe the car’s service schedule and, in some cases, get all your service done at the dealership that sold you the car. Want to change your own oil? That might be fine, but only if you save the receipts for the oil filter.

There’s nothing inherently nefarious about an extended warranty program, especially if the dealer offers it for free. But it’s also relatively unlikely that you’ll ever reap any benefits from a million-mile plan. Dealers offer these programs to help build goodwill with customers, but we can safely assume they’d stop doing it if they found themselves routinely giving out free, expensive repairs. If you’re meticulous about your service records and keep your car for a long time, you may save some money on repairs down the line. But because of the variety of loopholes dealers leave in the paperwork, there’s also a decent chance you’ll find yourself paying for fixes out of pocket. So unless you fall into the narrow category of car buyers who can beat the house on a free extended warranty, don’t let it be the deciding factor in your purchase.

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