You’ll probably hear a lot about warranties when you buy a vehicle. We’ll warn you up front that they’re not the same as auto insurance, so don’t draw any hasty conclusions. 

What is a warranty on a car? It is described as a contractual commitment by the Federal Trade Commission (FTC) to repair certain flaws or faults in your car for a predetermined amount of time after you buy it. 

We’ll assist explain how it varies from a vehicle insurance coverage in this post. In order for you to understand which applies in the event that anything occurs to your car, our staff will explain the distinctions between warranties and insurance. 

Now let’s get going.

What distinguishes insurance from warranties?

Although they both provide financial security for your vehicles, auto warranties and auto insurance vary significantly from one another. Here are some distinctions between car insurance and car warranties to help you better understand the various types of vehicle protection: 

A contract for auto insurance specifies that you will pay an insurance company a premium in return for financial protection in the case of an accident, theft, or other covered incident.

You should think about including the following coverages in your vehicle insurance policy to assist provide sufficient protection against a range of accidents:

• Accountability. In most cases, this coverage covers injuries and property damage to other persons that you or your vehicle causes in a collision. In almost all states, liability coverage is a minimum requirement.
• Crash. Since collision coverage pays for repairs to your car in the event of an accident, the name is usually a reliable indicator.
• Entire. This coverage assists in covering auto repairs that are not covered by collisions. This might include robbery, vandalism, hail, or fire damage.

Repairs resulting from an accident or losses covered by physical damage coverage are not covered by warranties. How can they help you as a driver, and what do they cover?

varieties of guarantees

As we previously discussed, a warranty serves as a kind of financial protection for your car in the event that a part or component fails within a certain amount of time or miles, whichever comes first. 

The manufacturer or the dealer from whom you purchased the vehicle usually provides warranties. Your car’s warranty usually covers electrical and mechanical problems, but not collisions. Additionally, there are often two kind of warranties that come with buying a car: extended warranties and new car warranties from the manufacturers. 

A manufacturer (Ford, Subaru, Toyota, Kia, etc.) will normally provide a new car warranty or manufacturer’s warranty, which covers the vehicle for the first 36K miles or three years, whichever comes first. 

Third-party firms often provide extended warranties, which may be bought to either extend the manufacturer’s warranty or give warranty coverage for a pre-owned car. Once again, they’ll usually be for a certain amount of time or kilometers.

Considering this, you may be wondering whether getting a warranty is worthwhile if you already have insurance. 

Do I need a warranty in addition to insurance?

Many states have laws requiring people to get car insurance, so that might be a clear “yes” on the list of necessities. A basic warranty will most likely already be covered by the purchase price of a new automobile. However, an extended warranty could be a wise choice if you buy a car and would want a little more financial security. 

When it comes to unforeseen repairs or faults with your car, a warranty might come in handy. It’s crucial to carefully compare what you receive with an extended warranty vs a standard warranty since occasionally the former will cost more than the latter.

In the case of an accident resulting in damage to your vehicle or another person’s, auto insurance may assist in protecting your finances. Although paying for auto insurance isn’t usually at the top of our list of priorities, you’ll be happy you did have it in the first place if the time ever comes when you do need it. 

An insurance plan that uses a telematics-based strategy, such as this one, may reduce your monthly insurance costs. How? You may reduce your monthly premium without compromising coverage by driving defensively and avoiding distractions while commuting. 

It’s crucial to understand the differences between auto insurance and warranties, regardless of whether you decide to purchase an extended warranty. While they are not equivalent, both provide you and your car with financial security against those “what-ifs.”