Powertrain warranty

Powertrain Warranties 101

People like things that reduce their risk.  Want a good example, just look at the popularity of car, home and life insurance policies.  Car repair insurance is no different, of course, and that’s why many manufacturers now offer powertrain warranties on their new cars. As a result, we have seen an increase of automotive powertrain warranties that now extend up to 10 years and 100,000 miles.  That’s an awfully long time, yet an interesting thing has happened: people don’t seem to value them as much as you would think.

What is a powertrain warranty?

In simple terms, a powertrain warranty covers the parts of a car that provide the power to make it move. Typically that involves the engine, transmission and drivetrain. If any of these components are found to be defective or become damaged during the warranty period, then the manufacturer will pay to have the part repaired or replaced.  There is no cost to the consumer.

However, the sales staff at East Hills Subaru, a Roslyn, NY Subaru dealer told us, typical powertrain warranties usually don’t cover items that can wear out during normal use; things like clutches, universal joints, timing belts and CV joints. Other items like accessories attached to the engine may or may not be covered, it depends on the policy.

Back to the old days

Recently both General Motors and Fiat-Chrysler (FCA) have scaled back their powertrain warranty from 10 years/100,000 miles to 5 years/60,000 miles.  That leaves just a few manufacturers, such Kia, Hyundai and Mitsubishi, that still retain 10 years/100,000 mile policies.  Why have some manufacturers done this? Well, in the past, those long warranties were offered to help sell cars, but now manufacturers are realizing that such coverage doesn’t seem to impact new car buyers like they did.

Do Buyers Care About Powertrain Warranties?

Maybe not as much as you would think.  Many consumers know that powertrain warranties are quite limited in terms of what they cover; for example, they don’t cover the components that typically wear out during use. Furthermore, modern cars are much more reliable than the cars of yesteryear, including vehicles from American automakers.  Consumers seem to realize this and this reduces the appeal of a longer warranty period for many.   It just seems like “an extended warranty.”

Except, maybe, for Hybrids

Interestingly enough, it seems like longer warranty coverage does help sell hybrid cars.  This is, undoubtedly, because hybrid cars are still a new technology for most consumers and the comfort level of having a long drivetrain warranty is a strong positive –especially when it comes to the batteries which are a very expensive component to replace. Funny thing is that gasoline powered cars are getting shorter warranty terms and hybrid cars, which tend to rank higher in reliability studies, are getting longer ones.  It’s all a matter of perception.

Conclusion

Should new car buyers be concerned about the longevity of their new car purchase or whether they’ll be spending more money on repairs (and thus will want a longer warranty period?) While these recent changes by General Motors and Fiat-Chrysler seem like a worrying move, the truth is that they likely won’t affect new car buyers at all.