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UPDATED: Mar 13, 2020
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People sometimes get confused as to what car insurance is responsible for paying, and as a result believe they are covered for things which their insurance does not insure. An example of this is when people confuse a “warranty” with an “insurance policy” and believe that their insurance will pay to fix a broken car engine. The truth is, no insurance company will ever pay for maintenance, repairs or other “preventative” work on your car; only car warranties cover this type of repair.
Damages from a Car Accident
There is one exception to this rule. If your car is involved in an accident and parts are needed to bring the car back to pre-accident condition, car insurance companies will pay for the purchase of these parts. To use an illustration, suppose one of your taillights went out and needed a new bulb. Your car insurance company certainly would not buy you a new bulb to put in your taillight. However, if your car was rear-ended by an uninsured motorist and that same light was smashed, your insurance company would certainly pay for a new taillight, assuming you have uninsured motorist coverage. It may seem a bit ironic that an insurance company would pay for exactly the same taillight bulb in one case would not in the other, but it is due to the purpose and nature of car insurance that dichotomies such as this exist.
Non-Accident Related Damages
If you want your car repaired or parts replaced in situations not involving an accident, you will need to have a warranty on your vehicle. Warranties are a different type of insurance policy; you pay a premium, usually up front when you purchase the car, and the warranty covers parts and labor through a certain mileage. Many new cars have manufacturer’s warranties already in place; for example, Volkswagen offers three years or 36,000 miles worth of “bumper to bumper” coverage on all new vehicles, and five years or 70,000 miles of “drivetrain protection.” What this means is that if you buy a new Volkswagen, you will have three years of warranty coverage in which you will not have to pay for any repairs to your vehicle, although you will probably have to pay the costs associated with oil changes and regular maintenance. For the first 70,000 miles, any major issues such as engine and transmission will also be covered.
What options do I have after my warranty expires?
After a manufacturer’s warranty expires, you have several options. You can purchase an “extended warranty” from the manufacturer or from another company. Many customers choose to purchase the extended warranty at the time they buy the car, so they already know they are going to get an additional year or two years worth of free service if anything goes wrong with the car. Generally speaking, the older a car is the more expensive an extended warranty is going to be.
You do not have to purchase a warranty for an older car; instead, you can take the money you would have paid for the warranty and put it into a fund to pay for your own repairs. This is a great option if you or someone in your family is handy with making light-to-moderate repairs on your car. However, if you do have an older car, you may find yourself with “nickel and dime syndrome.” This means that constant small repairs may actually add up to a total which is more expensive than if you simply purchased a new, well-constructed vehicle.
The third option is simply to buy a new car. You can do a bit of research and discover which models are consistently ranked highly for “dependability,” which means that they do not need many or very expensive repairs. Of course, any individual unit could give problems, but overall dependability ratings tend to be reliable. Finding a car which never requires any repairs is not possible, however, and you will want to budget enough in your “car allowance” to be sure you perform routine maintenance in a timely manner, which can help you extend the life of your car.