Most buyers say reliability is their No. 1 concern when choosing a new car. As such, it would seem to follow that the vehicle’s warranty would likewise be a primary consideration. This does not appear to be the case. In fact, warranty terms are not even in the top 10. In order of importance, car buyers rate the warranty below things like styling, performance, gas mileage, and even the “image” the vehicle supposedly portrays.
Not paying attention to the terms of a new car warranty is a mistake. The fact that a car company has a reputation for reliability is great, but it will be of no consequence when the time comes to seek compensation for a defect. At that point, the warranty is what matters, because:
The rights and remedies provided by California’s Lemon Law only apply to defects covered by the vehicle’s factory warranty.
Any potential lemon law claim must therefore begin with an analysis of the warranty. With that in mind, the following information will provide a general background on how new car warranties work. Specific questions regarding coverage should be directed to a lemon law attorney.
Understanding the Purpose of a New Car Warranty
Do not think of a motor vehicle warranty as a promise that the vehicle will be free of defects. That is not what the car company is promising. After all, at the time it issues the warranty, the company already knows that some percentage of its vehicles will turn out to be defective. The manufacturing process is not perfect. By issuing the warranty, the car company is promising that when defects are discovered, it will repair them. That is quite different than promising that defects will not occur in the first place.
- Customer discovers the vehicle has a covered defect = Manufacturer has not yet breached the warranty.
- Dealership fails to promptly repair a covered defect = Now the manufacturer has breached the warranty.
The distinction is important in the context of a lemon law claim. Owners of defective new cars must give the manufacturer a reasonable opportunity to fix the problem. Prior to that, the manufacturer has not broken any promises, and the lemon law does not apply.
Not All “Warranties” Fall Within the Lemon Law
Lemon law applies only to defects covered by factory warranties. As with other legal matters, it is the substance – not the name – of the agreement that determines what it is. Extended service contracts and the like may bear the title “warranty,” but they are not true warranties, and they do not qualify under the lemon law. Factory warranties are easy to identify because they come with the vehicle (not offered as an option by the dealer) and their cost is included in the purchase price.
Does the Warranty Cover the Defect?
New car warranties usually provide two primary coverages: basic and powertrain. Each has its own date and mileage restrictions, and coverage expires when either one is exceeded. By way of example, here are the coverages offered by three major automotive brands:
Manufacturer Basic Powertrain
Mazda 3 years / 36,000 miles 5 years / 60,000 miles
Cadillac 4 years / 50,000 miles 6 years / 70,000 miles
Kia 5 years / 60,000 miles 10 years / 100,000 miles
Basic coverage is also referred to as bumper-to-bumper coverage. It includes most parts, except those designed to wear out, like brakes and belts (and tires, but those are covered separately by the tire manufacturer). Powertrain coverage includes the engine, transmission, driveshaft, and other propulsion-related parts. Equipment installed by the dealer is not covered. Defects resulting from a collision or from owner modifications are also excluded.
Lemon Law Claims Require Prompt Action
The law does not recognize the existence of a vehicle defect until the owner brings it to the attention of the dealership. This must occur within the date and mileage period set forth in the warranty. If you are unsure how to proceed, contact a law firm with experience in this practice area without delay.