What Is Excluded in a Limited Warranty?

Explaining to your potential buyers what the exclusions are in a limited car warranty can go a long way. When a customer's damaged part isn't covered by his limited car warranty, and he finds out about it too late, that wouldn't be a good sight. These scenarios are common since most car owners assume that if any component goes wrong with their car, their warranty automatically covers everything. This can be a headache to dealers and manufacturers when trying to explain to the customer what exactly happened to the warranty.

A limited car warranty is a contract. Which means it has policies, limitations, and warranty exclusions. And we're going to discuss them in depth in this article, starting with…

serious man with megaphone gesturing stop sign

What is a limited car warranty?

A limited car warranty is an agreement between the buyer and the manufacturer. It declares that they will pay for repairing or replacing specific parts of the purchased vehicle. This agreement guarantees that the car's quality will stay at a certain level as long as the owner follows the terms and conditions.

Basic limited car warranties are also called bumper-to-bumper warranties. It got its name because it is designed to protect almost every automobile component - from the front bumper to the rear bumper. Despite that, it still has warranty exclusions and is limited to a specific time. Most limited warranties have a period of around 3-5 years.

It has three basic components: coverage, period, and what is necessary to qualify for the guarantee. Certain manufacturers even require that owners must perform all maintenance at the dealership to prevent their limited car warranty from being voided.

Are used cars excluded from a limited warranty?

Almost always, a limited car warranty is transferable to 2nd hand owners as long as it is still in its coverage period. However, it's also important to note that other manufacturers change some of the terms and conditions once the warranty is transferred to a new owner. For example, when a Hyundai unit is sold, the manufacturer cuts its warranty period in half.

You can check the owner's handbook if you're trying to sell a pre-owned car and want to find out if it's still under a limited warranty. The warranty coverage from the time the automobile was purchased is detailed there. Check the car's mileage (via odometer) and date of purchase.

The car is no longer covered if the mileage exceeds the warranty restriction. If it does not exceed the limit, you must still verify the date of purchase. If you don't know the original purchase date of the car, then find its VIN (vehicle identifying number). Use the VIN-lookup tool to check the status of the limited car warranty.

manager selling cars in showroom

But what if the car was exported?

Since the 2000s, most manufacturers have voided warranties for exported vehicles from Canada to America. This is to prevent dealers from competing with local car stores. Since it's been in effect, fewer and fewer dealers are engaging in this exchange. However, today, this arbitrage is a big opportunity just waiting to explode.

And the reason for that is here at Can-Am Dealer Services, we can give you the option to get the same warranty benefits for your buyer as the original warranty without spending a fortune. Therefore, customers are less likely to walk away from exported car deals while you still get a good profit from them.

Click here if you want to know more about Can-Am warranty. This could be your game-changer.

Car warranty exclusions and limitations

As previously stated, your limited car warranty does not cover all components and repairs. They also have different limitations and exclusions depending on the manufacturer. You can learn more about what your warranty covers and doesn't cover in the warranty booklet or owner's manual. But generally, If the car sustains damage not caused by regular use, your warranty will most likely not cover it.

Most of the time, these are the warranty exclusions:

Routine maintenance: Customers have to pay for their routine maintenance, and the car owner must be punctual to avoid voiding the warranty. A car's routine maintenance costs around $1000 a year… depending on the vehicle. It includes periodic oil changes, filter changes, tire rotations, etc.

Wear and tear: Since limited car warranties only cover parts that have factory defects, damages from wear and tear are not covered. Examples are wear and tear of brakes, clutches, brake pads, headlight bulbs, windshield wiper replacements, etc.

Exterior or body panel damage: The car components directly exposed to the environment are affected mainly by external factors. Tree sap falling on your hood, salt exposure, sand getting into your engine, hail denting your roof, and even vandalism can damage your vehicle. Any manufacturer that covers these parts will be guaranteed to be bankrupt sooner. This is why any damage to these parts is not covered.

Interior damage: A limited car warranty also does not cover interior damages. Damages like holes in the seats, torn seatbelts, broken plastic, etc.

Damage from an accident: Sometimes people confuse warranty with insurance. Warranties don't cover damages from accidents. Damage from accidents usually involves dents in the exterior, detached side mirrors, broken windshields, etc. Your warranty can't cover them.

Alterations or modifications: If the car is still under a limited car warranty, the owner should refrain from altering or modifying his vehicle. These alterations can void the warranty entirely. Installing non-factory parts and tampering with the odometer are the most common reasons warranties are voided. Some car owners are not aware of this.

These are most of the car warranty exclusions. The good news is that there are more inclusions than exclusions. Different types of limited car warranties will define what the inclusions are. Some of these types are powertrain warranty, corrosion and perforation warranty, and emissions warranty. If you want to learn more about what's included in a limited car warranty, click here.

man worker of car detailing studio applying ceramic

Conclusion or Takeaway

Explaining to your customers clearly what the limited car warranty covers or doesn't will ensure a well-informed owner. So save this article for future reference.

Do you have an unanswered question about limited car warranty? Contact us.

Blog Home