Auto warranties range in coverage from full protection to power train
and everything in between. However, all warranties will fall within
one of three categories: Bumper-to-Bumper Coverage, Stated Component
Coverage (aka Standard Component Coverage), or Power Train Coverage.
A Bumper-to-Bumper warranty is also known as a new car warranty, a
wrap program, or an exclusionary policy. It is the most
comprehensive policy you can buy, and only the items not covered in the
policy are listed on the warranty; hence the term "exclusionary."
This type of policy may also offer 24-hour roadside assistance, towing,
and car rental reimbursement, among other options. Bumper-to-Bumper
warranties are only available for "new cars" — those with 50,000
miles or less. It is important to note that "Bumper-to-Bumper" does
not cover the bumpers! While it is the most extensive coverage you
can buy, it does not cover every part of the vehicle, and buyers must
still be aware of policy limitations.
Standard Component Coverage is known as an inclusionary program,
which means that the policy lists the items to be covered in the
warranty. This is the standard warranty that covers most of the
major parts and components such as the automobile electrical system,
cooling system, suspension, and so forth. Standard component
policies are usually the best bet for mid-mileage vehicles that don't
qualify for bumper-to-bumper policies but still retain good value.
A Power Train warranty — the least inclusive and least
expensive warranty — will only cover repair bills on big ticket
items such as the engine, transmission, and drivetrain. It is most
appropriate when looking to warranty a high mileage or mid-mileage
vehicle that may generate some large repair bills.
There is sometimes overlap between auto warranties, insurance policies,
and service contracts, so you may wish to visit this
resource site for more information.