Chapter 8: Words about Warranties

New Car Warranties

Warranties are getting as competitive as car sales, which is good news for consumers. Most manufacturer's warranties cover repairs for three years or 36,000 miles, but warranties may vary from two years to four years and up to 70,000 miles.

To outdo each other, manufacturers are offering helpful extras like road assistance and towing. Some even throw in trip routing services and reimbursement for food, lodging and alternative transportation if your car breaks down while traveling.

While most warranties don't cover routine maintenance such as filter, oil and other fluid changes, a few do. This perk can save you hundreds of dollars over the warranty period.

Read the fine print to discover all the coverage you're receiving. It may be more than you think. You'll want to make sure you're not being charged for any of the extras mentioned above, however. If you are, check competitive services before signing up for them.

Used Car Warranty Law

Minnesota has one of the strongest used-car warranty laws in the country to protect used-car buyers. Under the Minnesota Used Car Warranty Law, used-car dealers must provide basic warranty coverage for most used cars and small trucks sold to Minnesota buyers.

Because this law applies to dealers only, it's important to know if you're buying from a dealer. A dealer is anyone who sells more than five used cars a year, and this person must be licensed by the Minnesota Department of Public Safety's Driver and Vehicle Services Division.

Sometimes dealers will be unlicensed and pose as private individuals. If you buy a qualifying car from an unlicensed dealer, then your car is still covered under the Used Car Warranty Law. (Cars that qualify for the Used Car Warranty are described in "The Basic Warranty" section that follows.) You are legally entitled to all basic warranty coverage even if you don't receive any written warranty documents.

Friends, relatives, neighbors or any other private individuals who sell you a car are not dealers, so the warranty would not apply in these cases. It also does not apply if you purchase a car from any of the following:

• Your employer.

• A bank or financial institution.

• A company that previously leased the car to you or a family member.

• The state or any county or city in Minnesota.

• An auctioneer who sells the car in connection with the sale of other property or land.

The Basic Warranty

The Used Car Warranty Law covers used cars purchased primarily for personal, family or household use. The terms and length of the warranty will depend upon the mileage of the car at the time you buy it. For cars with fewer than 36,000 miles, the warranty applies for 60 days or 2,500 miles, whichever comes first. The parts covered under the warranty for cars in this mileage range are:

• Engine — all lubricated parts, intake manifold, engine block, cylinder head, rotary engine housings and ring gear.

• Transmission — automatic transmission case, internal parts and torque converter; or manual transmission case and internal parts.

• Drive axle — axle housings and internal parts, axle shafts, drive shafts, output shafts and universal joints. (Secondary drive axles are covered on automobiles and passenger vans but are not covered on other vehicles mounted on a truck chassis, such as utility and off-road vehicles.)

• Brakes — master cylinder, vacuum assist booster, wheel cylinders, hydraulic line and fittings, and disc brake calipers.

• Steering — steering gear housing and all internal parts, power steering pump, valve body, piston and rack.

• Water pump.

• Externally mounted mechanical fuel pump.

• Radiator.

• Alternator, generator and starter.

Length of Warranty

For cars that have between 36,000 and 75,000 miles, the warranty applies for 30 days or 1,000 miles, whichever comes first. For cars in this mileage range, the warranty covers the parts listed above, with the exception of the following parts that are not covered:

• Rack.

• Radiator.

• Alternator, generator and starter.

Parts are not covered under the Used Car Warranty Law if they are not specifically listed above.

What's Not Covered

Not all cars are covered under the Used Car Warranty Law. The following are excluded from the law and are usually sold "as is":

• Cars with 75,000 miles or more.

• Cars sold for less than $3,000.

• Custom-built cars or cars modified for show or racing.

• Cars that are 8 years of age or older.

• Cars purchased primarily for business or agricultural use.

• Vehicles with a gross vehicle weight of more than 9,000 pounds.

• Vehicles manufactured in limited quantities.

• Vehicles not manufactured in accordance with federal emission standards.

• Diesel engine cars.

Other Exceptions

• Ordinary maintenance — The warranty does not cover ordinary maintenance, such as changing spark plugs, ignition, points, filters, fluids, lubricants and oil, and brake and clutch linings. These remain your responsibility.

• Collisions, abuse and negligence — Repairs needed because of inadequate maintenance or taking poor care of the car are not covered. Nor is the dealer required to repair any parts still covered by the original factory warranty or parts that the manufacturer agrees to repair at no charge because a part was defective.

Lawsuits

If you have a warranty dispute with a dealer, you may have to take the dealer to court. Any lawsuit under the Used Car Warranty Law must be filed within one year after the warranty expires. The good news is you can usually settle the dispute in conciliation court, where procedures are relatively informal and you don't have to hire an attorney. (For more information, call the Attorney General's Office at (651) 296-3353 or 1-800-657-3787 and ask for the free brochure on conciliation court.)

The Buyer's Guide

The Federal Trade Commission and state law requires dealerships to display the buyer's guide on the car window. The buyer's guide is a double-sided form that the dealer fills out to tell you whether or not the vehicle comes with a warranty and, if so, what the warranty includes. If the "warranty" box is
Your Best Bet is a Reputable Dealer

The best protection against fraud is to work with a reputable dealer. Call the Better Business Bureau, ask opinions of friends and relatives and maybe even get names of former customers for reference.

checked, the car is covered by a warranty required by the state's Used Car Warranty Law or another warranty offered by the dealer. If the "as is" box is checked, the buyer is responsible for paying for all repairs that the car requires.

Even if the car you buy is covered under the Used Car Warranty Law, you may waive coverage for a particular covered part. If you'd rather negotiate a lower price, say, and take the car with a defective manifold, you must sign and circle a statement on the warranty that indicates that the manifold isn't working properly.

What If a Part Breaks?

If the drive train falls off as you leave the lot or the manual transmission sticks within the time period of the warranty, you are entitled to have it fixed free of charge. You must report the problem to the dealer within the warranty period. Of course, to be fixed without charge it must be a part covered by the warranty.

But don't just pull into the first repair place you see and then think you can present the dealer with the bill. The dealer must repair or replace the part. If the dealer doesn't have a service facility, he or she will tell you where to take the car.

If it's inconvenient for you to go to the dealer for repairs — if you live across the state, for example — you may have the repairs done elsewhere with the dealer's consent.

Once the defective part is fixed, you'll receive another warranty, good for an additional warranty period for that particular part.

Refund? It's Dealer's Choice

It may be the dealer's choice to forego repairs if they're too expensive and refund the cost of the vehicle to you instead. In this case, the refund must include all the charges you paid, including any towing expense, minus a reasonable deduction for your use of the vehicle. The law does not give the car buyer the right to demand the full purchase price in compensation.

The "'As Is'" Disclaimer

If the "as is" box is checked on the buyer's guide, you have to pay for any and all car repairs once you buy the car. "As is" appears on about half of all used cars sold by dealers in the United States. In Minnesota, however, this disclaimer isn't allowed unless the car fits one of the exceptions to the Used Car Warranty Law.

Research Recalls

To find out if a car model has ever been recalled due to a defect, call the U.S. Department of Transportation Auto Safety Hotline, (800) 424-9393. The department can send you information about any recalls.

So-Called Extended Warranties

If you are offered an extended warranty, be aware that, despite the name, it's really a service contract and may offer limited coverage for the car. Read the contract carefully. If you want it, remember that since it's a high-profit item for a dealer, you may be able to negotiate the price.