Warranties

Warranties

Does a longer new-car warranty mean better quality?

By Bill Roebuck

Does a long warranty on a new car or truck mean it's a better vehicle? It turns out it's not such a simple question to answer. It might mean the manufacturer believes so strongly in its product quality that it's sure only a few customers will need warranty repairs. It also might be a competitive marketing strategy. Or it might be a simple attempt to get buyers to purchase unreliable vehicles.

Pretty much everyone knows that today's cars and trucks are of much better quality than they were 10 or even five years ago. We've got technology to thank for that. New technology helps in the manufacturer's design, assembly and inspection processes to remove many potential problems before they hit the production line.

"In the area of overall quality, the automotive sector has earned and deserves a five-star rating," says Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. of Richmond Hill, Ont.

Despite this, most manufacturers still offer an industry standard three-year, 60,000-km limited warranty. Keep in mind that all warranties are "limited," and if the list of what's not covered is of concern, you should read the fine print in the warranty manual before you finalize a deal on a new vehicle.

A new vehicle actually comes with several warranties. The basic warranty covers the vehicle itself, powertrain is for the engine and transmission components, emissions takes care of the pollution control systems, corrosion is for rust-through problems, and roadside assistance is often offered in case your vehicle leaves you stranded.

There are examples where improved manufacturing quality has allowed an automaker to extend its warranties. One is DaimlerChrysler Canada, which stretched its powertrain warranty to seven years or 115,000 km on its Chrysler, Dodge and Jeep vehicles.

"That's because the improved quality of our vehicles warranted it," says DaimlerChrysler Canada spokesman Tom McPherson. "Our overall quality levels have improved substantially while warranty costs have dropped 20% in the latest model year, and have been cut in half since 1996," he says. The longer warranty, introduced last year, also is transferable to subsequent owners.

"This new warranty also enables us to break from the pack when it comes to customer peace-of-mind," says Dieter Zetsche, Chrysler Group president and chief executive officer. Another company executive has attributed the improved warranty to the benefits resulting from the 1998 merger between Chrysler and Daimler-Benz. The base warranty on the vehicles is still three years and 60,000 km, however.

One more firm that's been gaining big points from consumers with its warranty is Kia Canada. The company's 5-5-5 Extra Care Warranty is one of the best: a five-year/100,000-km comprehensive warranty for the vehicle and the powertrain, plus roadside assistance for the same period.

Kia also offers one-year/20,000 km of first-year adjustments for consumable items such as bulbs, wiper blades, fuses and brake pads. It's one of the most forgiving in the business for the initial break-in period.

A few higher-end marques boast longer warranties than the industry standard. Those with four-year, 80,000-km programs for the vehicle and powertrain include Audi (five years for powertrain), BMW, Cadillac, Land Rover, Lexus (six years/120,00 km for powertrain), Lincoln, Mercedes-Benz, Saab, Volvo, and Volkswagen (which doubled its warranty from only two years a couple of years back, and now also offers five-year powertrain coverage).

Infiniti ups the ante, with a four-year/100,000-km comprehensive warranty, a six-year/110,000-km powertrain warranty, seven-year corrosion perforation with unlimited mileage, a four-year roadside assistance program, and an eight-year/130,000-km emission control warranty. Acura also is impressive with its five-year/100,000-km No Small Print Warranty, although it only covers "major components."

You'll also find extra-mileage, 80,000-km warranties on the three-year warranty programs for Mazda and a few others. And both Ford and Nissan offer a five-year, 100,000 km powertrain warranty on top of their basic 3/60 programs.

Another warranty component to consider is corrosion protection. You'll find there's a lot of fine print in this section of your owner's manual with most manufacturers, so length of time does not define the warranty's quality. Kia, for example, has a five-year/unlimited mileage anti-perforation warranty on body sheet metal defects in material/workmanship. Porsche Canada offers a trendsetting 10 years and unlimited mileage, but goes to great lengths to detail how the corrosion must make a hole in a body panel from the inside out, then adds lots of restrictions about when the warranty will apply.

"Warranties are generally getting longer," notes DesRosiers. "It's comforting to the consumer. It may be used to counter a reputation problem, or may reflect higher product quality. Who knows what the facts are?"

He adds that a good warranty keeps you coming back to the dealership where the cost of repairs may be covered. "It's a huge incentive," he says.

DesRosiers doesn't recommend that extended warranties be purchased. "Stick with the manufacturer's warranty." That's echoed by mechanical engineer Phil Bailey, a Montreal garage owner. He's seen an extended warranty "so cleverly written that the car had to practically explode before any coverage was applicable."

As for so-called "hidden warranties," DesRosiers says they don't exist, technically. "They're simply an opportunity to offer good will" and are used by manufacturers in particular cases where there's no need to offer a specific repair to all customers.

If you have problems with your vehicle, work with your dealer, advises DesRosiers. "The dealer always sides with the consumer."

Bill Roebuck is the editor of CarTest.ca.

Solving warranty disputes

By Bill Roebuck

What do you do if you feel the dealer or the manufacturer isn't honouring the warranty as you expected? First, try to resolve the dispute with your dealer. If you are not happy with the results, consider taking the vehicle to another dealer. Sometimes a report from a diagnostic centre can be helpful in determining the problem.

If you still feel dissatisfied, call the manufacturer's customer assistance centre. You can also ask the dealer to arrange a meeting with the manufacturer's representative. If working with them does not resolve the dispute, you have two more choices: Going to court or to CAMVAP.

This odd acronym is for the Canadian Motor Vehicle Arbitration Plan, a program that can help resolve disputes between consumers and an automobile manufacturer about the quality of a vehicle or how the manufacturer is interpreting or implementing its new vehicle warranty.

The national program covers most vehicles up to four model years old. Its aim is to help consumers resolve disputes in a way that is fair, fast, free, friendly and final. You can choose between going to court or using the program, but not both.

Arbitration means that you and the vehicle manufacturer both agree to accept the decision of an impartial person who will listen to both sides of the case, weigh the evidence, and make a decision that is final and binding on both you and the manufacturer.

A CAMVAP arbitrator can order repairs to a vehicle, its buy-back, reimbursement for repairs already made, and payment of some out-of-pocket expenses such as towing or obtaining witnesses. Of course, the arbitrator may also determine that there is no liability on the part of the manufacturer.

In the owner's handbook or warranty manual that comes with a vehicle, there is a process set out to resolve a dispute between you and the manufacturer. You must follow these steps before you come to CAMVAP.

You'll also want to keep all your documents. Invoices, letters, service records, bills of sale, work orders, receipts for out-of-pocket expenses, lease agreements and contracts may be vital in presenting your case. Also keep a log of the steps you have taken, showing who you dealt with and when.

CAMVAP is free. You pay only the expenses associated with presenting your own case, such as lawyer or witness fees or the costs associated with obtaining a summons to witness or subpoena.

The plan is fully funded by automobile manufacturers through formulas that reflect each company's Canadian market share and past CAMVAP case experience. Participating manufacturers include Daewoo, DaimlerChrysler, Ford, General Motors, Honda, Hyundai, Jaguar, KIA, Land Rover, Mazda, Mercedes-Benz, Nissan, Porsche, Rolls-Royce, Subaru, Suzuki, Toyota and Lexus, Volkswagen and Audi, and Volvo.

Detailed information on CAMVAP is posted on the Internet at http://camvap.ca, or can be obtained by calling 1-800-207-0685.