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Kick the Tires, Read the Warranty

Car buyers often overlook the guarantee when they're shopping for new wheels. But when things go wrong, that can prove to be an expensive mistake.

April 18, 2001|MARRY SORENSEN | SPECIAL TO THE TIMES

When Ifsha Rahman bought a new car last year, she paid attention to the manufacturer's reputation and the vehicle's styling and affordability.

But, like most new-car buyers, the 30-year-old Arcadia resident didn't pay a lot of attention to the warranty.

She should have.

After narrowing down her choices to two cars, purchase price won out: Rahman selected a Honda Civic EX over the vehicle that really was her heart's desire, a new Volkswagen Beetle.

"As far as reputation goes, Volkswagen and Honda seemed about the same," Rahman said. "The Beetle was the cool car, and I really wanted it. But when the Bug turned out to be several thousand dollars more, I decided being trendy wasn't worth the extra money."

Had Rahman compared warranties, she might have been able to rationalize buying her dream car.

Although Volkswagen's basic warranty of two years or 24,000 miles doesn't stand up to Honda's basic coverage of three years or 36,000 miles, the German auto maker's powertrain warranty coverage--10 years or 100,000 miles--puts Honda's, the same three years, 36,000 miles, to shame.

For the Record
Los Angeles Times Wednesday April 25, 2001 Home Edition Highway 1 Part G Page 2 Financial Desk 2 inches; 55 words Type of Material: Correction
Warranties--We barely got this one off the lot before there was a breakdown. Hyundai Motor America and Kia Motors America offer basic, or bumper-to-bumper, warranties of five years or 60,000 miles and a powertrain warranty of 10 years or 100,000 miles on their new vehicles. Our article last week on automobile warranties misstated the terms of the two South Korean auto makers' basic coverage.

And if Rahman ever locks herself out of the car or runs out of gas, she's on her own in the Civic. But with the VW, she would have had two years of roadside assistance at no extra cost.

Rahman is not alone in overlooking warranties when comparing vehicles. In a recent survey, the Automobile Club of Southern California asked its members what was most important when buying a new car. The warranty didn't show up as a priority, says Steve Mazor, the club's chief automotive engineer.

"People are much more concerned with brakes and crash-worthiness, which are at the top. A little lower on the list come trunk room, acceleration and handling. Warranty is even lower," he said. "Most new-car warranties are adequate, so it's not a big deal to many buyers."

But when something goes wrong with a car, the warranty is critical.

*

Most experts agree that, with the reliability built into modern automobiles, car buying, like marriage, has become an affair of the heart, seldom marred by thoughts of what could go wrong down the road.

J.D. Power & Associates' annual initial quality study reinforces the fact that cars are better now than ever. The number of problems reported by new-car buyers has declined by 50% over the last decade.

That's good news, of course, but it is little comfort to the poor consumer who buys an exception to the rule that drops a transmission or cracks a head at 20,000 miles.

And that's where warranties come in.

A new-car warranty is really a sort of insurance plan that promises you will get your money's worth out of a vehicle for a specific period of time, says Paul Roberts, regional area manager at Penske Auto Centers in Troy, Mich.

And contrary to popular belief, as Rahman could have discovered, not all warranties are the same.

As competition has heated up, some manufacturers are providing longer and more comprehensive warranties as a way to win customers. American Isuzu Motor Co., for instance, advertises a 10-year, 120,000-mile powertrain warranty. Lincoln provides complete coverage, including routine maintenance, for three years. And American Hyundai Motor Co. and Kia Motors America Inc. both provide 10-year, 100,000-mile basic warranties on all their vehicles.

Most new cars come with four separate warranties, each covering specific parts and components or insuring against specific problems.

The most familiar to many buyers is the basic warranty, which covers most of the car against defects for the first few years. Terms vary, and a thorough understanding of what is and is not covered--and for how long--should be part of a truly informed car-buying decision.

Often called the bumper-to-bumper warranty, it is provided at no extra cost by the vehicle manufacturer and covers defects in all manufacturer-supplied parts and components. These usually are referred to as OEM parts because they are supplied by the original equipment manufacturer. Actually, most car companies buy many components from outside vendors, who build them under contract. But because car makers integrate the components into their cars, they provide the warranty coverage for most.

A basic warranty typically runs three years or 36,000 miles--whichever comes first. But a growing number of car makers are now covering their vehicles for four years or 50,000 miles. A few go even beyond that.

In most cases, basic warranties do not cover "normal wear and tear," meaning the dealer isn't going to replace dirty oil filters or worn fan belts, heater hoses or windshield wiper blades for free unless there is a provable defect.

But a few companies--mostly luxury car makers like Lincoln--now advertise warranties that cover all routine, scheduled maintenance for the first couple of years. These plans often will replace anything that wears out, for whatever reason.

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