Official and Third Party Warranties

Car warranty running outIf you have a telephone, watch television, or have looked at the unwarranted mail you receive each day then there is a good chance that you have seen or heard of a ‘third party warranty’. But what is it and how does it help you? Warranties in general are supposed to protect you from damaged goods and car warranties are no exception. But a third party warranty isn’t from the manufacturer or dealer, so there can sometimes be a questions as to if they work, how they work, and it they are worth the money to purchase one.

What are Third Party Warranties?
When you purchase an expensive product, like a car sometimes you want protection for it in case it may need costly repairs, this is what a warranty is for. With a third party warranty there is no connection between the company offering the coverage and the company you buy the product from. They are an independent company which allows them to use independent services when or if you should ever need a repair on your vehicle, or purchased product.

What are Official Warranties?
Official warranties also give coverage for damage or repairs needed, but they are directly connected to the company where the purchase was made. And in the case of an automobile purchase, the official warranty would not allow you to seek repairs and mechanics outside of the dealership or company. All parts and repairs would have to come directly from the factory or company where you made the purchase.

How do the Two Warranties Compare?
There are usually two main differences between the two warranties. The first difference being the fact that one is backed by the dealership or original purchasing company. There is also usually a difference in what is covered and how the coverage is allotted. Every warranty is different but most third party warranties will cover things like:

  • Engine- belts, lubricated internal parts, heads
  • Transmission- computer modules, case, internal leakage
  • Drive axle- differential housing, shaft, joints
  • Air condition and heating components
  • Electrical parts
  • Cooling system
  • Fuel system
  • Seals and gaskets

Manufacturer’s warranties cover some of these things, but many only offer coverage until you have driven the car about 36,000 miles.

Is One Warranty Better Than the Other?
There is much debate about the two warranties, and if one is better than the other. The official warranty does cost more, and requires you to use the factory parts and trained mechanics. Whereas the third party warranty is cheaper, and allows for more flexibility. However, the chief complaint of third party warranties are that you often have so many qualifiers to get something fixed, that the warranties are all too often useless.

Reasons to Buy From a Dealership
If you check out dealership sites like you will find out that an official warranty may bring you a better peace of mind than a third party. You will be able to get repairs done easily and with less hassle. You also don’t have to worry about being scammed, or buying into a company that is going to go bankrupt in a year or less. Another big plus is that you don’t have to get numerous estimates, or pay for costly repairs upfront while waiting for a reimbursement after.

Ultimately you have to make the decision about what is best for you. There are good third party companies out there, the questions is simply what are your needs and wants in a warranty provider.

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