New And Used Extended Car Warranty Guide Canada
If you’re buying (or already own) a new or used car, deciding what extended warranty protection to get can be challenging. There are likely several different providers and coverage options to choose from. It’s important to make an informed decision. You want to have the right protection when your vehicle breaks down. We put together this extended car warranty in Canada guide to help you make that decision.
What’s covered under an extended car warranty in Canada?
When you buy a new vehicle, it will come with a comprehensive (also known as basic) warranty from the manufacturer. It usually lasts for 3-5 years and 60-100,000 kilometres. This warranty covers almost all the major and minor components of the vehicle. You will also get a powertrain warranty that typically lasts a bit longer. It only covers the parts of a car that provide power and make it move. That involves the engine, transmission, and drivetrain. Once these have expired, an extended warranty kicks in.
An extended car warranty can come in many different forms. Price and coverage level depend on factors including brand, model, mileage, and age. You will have to decide what is important to have covered and at what cost. Do you want protection for all the bells and whistles or limited protection for some basic items?
A good comprehensive extended warranty will cover most of the vehicle’s working parts, including steering, electrical, engine, air conditioning, transmission, and suspension components. It is often referred to as “bumper to bumper.” However, you can find coverage that includes all or just a few of these parts. Pay attention to the fine print and avoid relying on brochures that gloss over the details.
Extended warranties do not cover cosmetics, general maintenance, or wearable parts. However, you can get added protection for these items by purchasing an extended service plan from the dealership. These plans are different from extended warranties. They provide prepaid routine services like oil and fluid changes or brake pad replacement. They don’t provide many benefits other than putting you out of pocket in advance and ensuring you return to the dealership for servicing.
Here are 12 things you must consider when researching extended car warranties.
1. Can I choose any shop for repairs?
It is important to have the freedom to visit any licensed shop in case of a claim. Do you have a favourite shop or a mechanic you trust? Do you prefer an independent shop or a dealership? What if you are travelling? If you can’t choose the shop, you could be stuck waiting for approval or an appointment.
2. How are claims handled and paid for?
Your claim should be as smooth as possible. Your warranty provider should handle everything and keep you informed — from estimate review to approval and final payment. Ensure your warranty provider pays the shop for your repair when it’s finished. Why pay out of pocket for repairs and wait for reimbursement?
3. Am I getting full comprehensive coverage?
New vehicles are very complicated. Failures are as often electrical as mechanical and can keep you off the road. Consider having full comprehensive protection covering electronics and advanced tech, especially on newer vehicles.
4. Does the policy include OEM parts?
Many repairs on newer vehicles can’t happen without OEM (original equipment manufacturer) parts. If you are returning to the dealer for repairs, you must have OEM parts in your warranty. Many aftermarket parts are as good or better, but you will want the OEM option. Not having it can affect parts availability and repair times. Check if the warranty includes it or if it is an extra cost.
5. Does the warranty require extra maintenance?
Some warranty providers stipulate extra maintenance requirements, such as getting an oil change every four months, regardless of driving habits. One miss can result in a claim being denied. Get a policy that doesn’t require more maintenance outside the manufacturer’s recommendations.
6. Is the coverage backed by a licensed Canadian insurer?
Extended warranties are long-term commitments. Ensure your warranty coverage has the backing of a licensed Canadian insurer with A-rated financial status. This ensures your claim will always be paid.
7. Can I get a policy at any time?
Buying a warranty is a big decision, so take your time. Do your research and think everything over. Dealerships often say you only have a few days to decide and can’t get a warranty anywhere else. Don’t be pressured into a decision; you have options. If you buy new, a lot can happen before the warranty kicks in in 3 or 4 years.
8. Should I buy the basic powertrain option?
GM, Ford, Honda, and most other automakers limit their comprehensive coverage to three years but powertrain to five. This is because most warranty problems happen on the comprehensive side. Powertrain issues can be large claims. Yet, powertrain-only warranties often won’t provide enough protection for all the potential mechanical problems of newer vehicles. A powertrain warranty can be a good, affordable option if you have an older car and want basic protection.
9. Have I seen the warranty provider’s reviews?
Let’s face it: extended warranties haven’t always had the best reputation. But online reviews can help you level the playing field against shady companies. Read up and see what is happening to other customers. Reviews will reflect dishonest sales tactics or poor claims service.
10. Can I cancel my warranty?
What happens if you sell, trade, or write off your vehicle? It’s an important consideration. Many warranties, especially from the manufacturer, offer no refund after 30 days. An insurance policy warranty will provide a limited refund for the unused time or mileage if you don’t have claims and need to cancel.
11. What happens if I don’t make a claim?
Some warranties offer a “no claims bonus” after the policy expires. Providers often add this, hoping it will deter you from claiming breakdowns. You will also pay extra for it. Will you decide not to make a claim, hoping to get a refund? You can’t sell, transfer, or write off the vehicle. Also, it may only be a credit to use at the same dealership for a new vehicle. You also have a short time to apply for a refund at the end of the warranty, often only 30 days or less.
12. Am I able to transfer the policy in any sale?
Check to be sure you can transfer the warranty if you sell your vehicle. Your needs and situation constantly change, so the transfer clause is important. Having an active warranty is an investment in the future of your vehicle. It increases a vehicle’s resale value and gives any potential buyer confidence.
Whatever way you decide to proceed, be sure to ask questions and understand your coverage. Remember, it’s a two-way street. Know your obligations, such as service requirements and procedures for making claims. A great extended warranty can help you avoid large, unexpected repair bills that can be a financial strain.