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Glossary

Common Warranty Terminology

As you read through the Warranty Direct site and the sites of other extended vehicle warranty companies, you may come across a few industry-specific words that you don't recognize or that are being used in a different way than typical everyday conversation. Some of these words and their definitions appear below.

Administrator

When referring to extended vehicle warranties and service contracts, this is the company or people that will be responsible for the day-to-day operations necessary to fulfill the warranty or contract agreement. Some companies serve only as a sales office and rely on an outside administrator for their plans. Warranty Direct both sells and administrates all parts of its extended auto warranty plans.

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Basic Warranty

Also called the manufacturer warranty since it often comes with the purchase of a new vehicle, this warranty generally covers everything but wear (tires, brake pads) items and maintenance (oil, spark plugs, filters) under normal use and maintenance. These warranties are typically limited to a certain period of time (3 to 5 years) and/or mileage (36,000 to 60,000 miles)

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Certified Car

Sometimes called certified pre-owned vehicles, these cars are used vehicles that have been inspected and, in most cases, reconditioned by the dealer or manufacturer for re-sale.

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Claims Reserve Accounts

These are the monetary funds that a vehicle warranty provider sets aside for the payment of current and future repair claims. This fund is a vital component to the stability of a provider as it indicates the company's ability to pay claims in a fair and timely manner.

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Consumable Items

Items that are not typically covered by a vehicle warranty due to the intended nature of these items to be frequently replaced. These include, but are not limited to, oil filters, windshield wiper blades, power steering fluid, transmission fluid, tires, air filters, and the like.

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Corrosion Warranty

Often offered in cold climates or areas with harsh environmental conditions, corrosion warranties are meant to protect vehicle owners from the cost of repairs associated with corrosion of the vehicle's exterior.

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Deductible

The portion of any warranty plan, service contract, or insurance plan that the member must pay out-of-pocket as part of any repair. Warranty Direct's extended warranty plans offer a variety of deductible options to fit your needs. The deductible is paid per visit, even if there are multiple repairs.

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Drive Train

This is the mechanical system that transmits power from one place to another. The drive train (also called the powertrain) includes the running belt, drive belt, rollers, and motor. A car's transmission is part of the drive train because it transfers engine power to the wheels.

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Emissions Warranty

8 year/80,000 mile warranty coverage for the catalytic converter, electronic emissions control unit and onboard diagnostic device.

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Extended Warranty

Any warranty or service contract that is in effect past the expiration date of the original manufacturer. Extended warranties can be offered by the original manufacturer or by a third-party extended vehicle warranty provider.

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Exclusionary Coverage

An extended auto warranty plan that offers comprehensive, bumper-to-bumper style coverage in which it is shorter to list the items not covered (excluded) by the warranty than it would be to list the thousands of items that are. These are the preferred standard in extended auto warranty plans and are far superior to named component coverage.

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In-Service Date

This is the date when a vehicle is placed into operating service. Typically this date is defined by the date the vehicle was first purchased and driven off the lot.

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Lemon Law

In order to protect consumers from vehicles that are shown to be consistently defective or more-prone-than-usual to breakdown, several States have enacted "Lemon Laws" that allow the consumer to return the vehicle to the manufacturer and receive a full or partial refund or a similar non-defective vehicle as long as the "lemon" vehicle meets certain requirements.

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Maintenance Guidelines

These are the specifications set forth by each manufacturer on the proper care and maintenance for a particular vehicle. These include recommendations on fuel grade, oil weight, tire pressure, and dates or mileage for regular tune ups or engine maintenance. These guidelines can vary widely from vehicle to vehicle and are the responsibility of the vehicle owner to know/abide by.

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Manufacturer Warranty

Also known as the original vehicle warranty, this is typically a bumper-to-bumper warranty in which the manufacturer pays for the cost of any covered repair or replacement. These warranties are typically only valid at dealer or manufacturer service centers.

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Named Component Coverage

A lower level of extended auto warranty coverage that pays for claims to certain named components only. The list of covered components often does not cover all essential systems and neglects many of the items routinely covered by exclusionary coverage.

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Powertrain Warranty

This type of warranty protects vehicle owners from the expense associated with a repair or replacement of the main mechanical systems that power the vehicle (see Drive Train). Manufacturers often offer a powertrain warranty in addition to a manufacturer warranty. In some cases, the powertrain warranty is valid for a greater period or time or mileage than the manufacturer warranty.

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Rebuilt Title

The type of title granted to a vehicle that has been restored, rebuilt, or reconditioned from a vehicle that was once considered a salvage vehicle or that was inoperable. Despite their appearance, these vehicles are not new vehicles, certified vehicles, or even standard used vehicles. Warranty Direct does not provide coverage for these vehicles.

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Recall

When a part or component of a vehicle is found to be widely defective or dangerous, the manufacturer will often issue a statement of recall. In these situations, vehicle owners are entitled to free repair or replacement of the named part or component if their vehicles fall within the spectrum of affected vehicles.

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Repair Facility

Any ASE-certified mechanic, body shop, auto dealer service center, national chain service center, or other auto maintenance facility.

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Rental Benefit

An allowance provided as part of some extended car warranty plans (like Warranty Direct's) that either pays for or reimburses a covered vehicle for rental car coverage based on the time needed for the repairs.

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Roadside Assistance

An additional benefit offered as part of some extended vehicle warranty plans (like Warranty Direct's) that gives covered members access to towing, emergency gas, flat-tire service, lost keys service, and other automobile services of an urgent nature that can be administered from the side of the road.

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Salvage Title

This is the type of title granted to a vehicle that has been damaged to such extent that it has lost 75% or more of its previous market value. Warranty Direct does not provide coverage for these vehicles.

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Technical Service Bulletin (TSB)

This is a document distributed by the automaker to its authorized dealers, informing technicians of known problems and how to fix them -- for example, if a vehicle comes into the shop making a specific noise, the TSB tells the technician what is most likely causing the problem, which saves diagnostic time. The repair may be covered under the vehicle's warranty, depending on the problem and the vehicle's warranty coverage, but a TSB is not a warranty itself.

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Transferability

The ability of a policyholder or extended vehicle warranty member to transfer coverage from themselves to another person. In the case of extended warranties, the coverage must remain on the same vehicle, but the named member can be changed should the vehicle be sold to a new owner.

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Travel Interruption Benefit

An allowance provided as part of some extended car warranty plans (like Warranty Direct's) that is meant to pay for or reimburse costs associated with a trip that cannot be completed due to a covered cause. This typically includes hotel fees, airline fees, or lost deposits. Travel Interruption Benefits are often limited to a certain dollar amount or may be available only for specific types of claims. For full travel interruption reimbursement, it is wise to consider travel insurance.

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Vehicle Identification Number (VIN)

All vehicles are assigned a VIN when they are manufactured. They are used to uniquely identify all vehicles. VINs are recorded in accidents, insurance records, and when work is done on a vehicle by a body shop, dealership or mechanic.

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Wear-and-Tear

Wear-and-Tear coverage provides a broader contractual definition of what will be covered.

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