There’s a lot of confusing terminology out there about car warranties. For example, what’s the difference between a factory warranty and an exclusionary warranty? How about an aftermarket warranty? Let’s find out what each one means.

An aftermarket warranty can cover your car repair costs. Get a free quote from CARCHEX now.

Aftermarket Warranty

These warranties can also be identified by different names, such as:

  • Extended auto warranty
  • Extended vehicle protection
  • Extended service plan

Names like “aftermarket warranty” are misnomers in a way, since only the original manufacturer (e.g. Ford, Toyota, etc.) can give a warranty. However, these extended plans can pick up car repair costs when the original factory warranty expires.

For example, let’s say after your factory warranty expires you have an unexpected transmission problem. Since your original warranty has ended, you’d have to pay for the repairs out of your pocket. But with an aftermarket warranty, the repair costs are covered as if you had the same factory warranty extended for another few years.

Many car owners pick up extended auto warranties to be sure they won’t get stuck with an unwanted large repair bill. Mechanics also recommend these plans since cars are more complex these days making average repair costs run higher.

Some other benefits of aftermarket warranties are savings over true cost to repair, protection against inflation, and the transferability of the warranty (makes selling a used car easier).

Factory Warranty

A factory warranty is basically the guarantee that comes with a new car. If something goes wrong with the vehicle, not due to damage or misuse, then the repairs are covered. Factory warranties are expressed in terms of time and mileage, such as 3 years or 36,000 miles, whichever comes first. Some other terms used to mean factory warranty might be:

  • Bumper-to-bumper warranty
  • New car warranty
  • Manufacturer’s warranty

Part of the factory warranty is the powertrain warranty which covers the engine, transmission, and wheel drive components. Powertrain warranties might have longer terms than the other warranty coverage items. In any case, once the factory warranty expires, the car manufacturer does not offer any type of extension.

Exclusionary Extended Warranty

Now this term really confuses some people. Put simply, an exclusionary extended warranty is the best extended repair coverage you can buy. This type of warranty is particularly attractive to owners of higher end, luxury cars. Expensive cars cost more to repair, even for things that seem minor. For this reason, many BMW, Mercedes Benz, and Lexus owners get exclusionary coverage to protect their vehicle as completely as possible.

This type of warranty covers practically anything that can go wrong with your car excluding a small list of parts consisting of but not limited to:

  • Regular Maintenance
  • Cosmetic items
  • Physical Damage


Aftermarket warranties are a good choice for those who don’t like surprises – like large car repair bills. Also, if you don’t like to haggle over costs with mechanics, an extended warranty can save you from this headache. Like factory warranties, an extended vehicle protection plan gives you peace of mind that your car repair costs are covered.

Don’t like getting stuck with a big auto repair bill? Get a free extended auto warranty quote on your vehicle today from CARCHEX.

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