Powertrain Warranty – What is and What Does it Covers?

You’ve heard the term thrown around a ton. It’s blasted onto commercials and sales packages like they’re offering the next great thing. It’s a powertrain warranty.

It sounds appealing to the untrained eye, getting your car covered for up to 100,000 miles or more? What’s not to love? But what exactly is a powertrain warranty, and how much are they worth? Just keep reading our guide, and we’ll walk you through everything you need to know.

What is a Powertrain Warranty?

Powertrain warranties are limited warranties that either the manufacturer or dealership offers. They provide you some protection, but not as much as their counterpart, the comprehensive warranty.

Coverage for powertrain warranties is usually decided by miles and years. For instance, you might have a 10-year, 100,000-mile powertrain warranty. As long as your car is under ten years old and has less than 100,000 miles, you’re still covered. But your car has to fit into BOTH criteria to be covered.

What Does a Powertrain Warranty Cover?

Powertrain Warranty

A powertrain warranty covers your vehicle’s most durable components—specifically, your engine, transmission, driveshafts, differentials, and transfer cases.

That might seem like it will cover a lot; the truth is that it doesn’t even cover all of the components on those systems. Your emission controls mounted on the top of your engine, your intake, brake boosters, and everything else attached to your engine or transmission aren’t always covered.

It’s just the big blocks of metal and their internal workings that powertrain warranties cover. If you can take it off your engine, it’s not covered. Furthermore, powertrain warranties won’t cover any parts that are deemed “wearable” like spark plugs or glow plugs.

What is a Powertrain?

Your vehicle’s powertrain is everything that delivers power from your vehicle’s engine to the wheels. If you’re a mechanic, this makes sense because you know how everything is connected and works. For everyone else, it can seem like a mystery.

For the non-mechanic, here’s a quick breakdown:

Your engine generates power. From there, your engine transfers it to your transmission, which spins your driveshaft. Your driveshaft takes that power to your differential (and transfer case if your vehicle is all-wheel or four-wheel drive), and your differential delivers that power to your wheels.

All of those components are directly related to moving your vehicle, and thus make up the powertrain.

Are Powertrain Warranties Worth It?

It really depends on how much you pay for it. If you’re buying a new car, then they typically come standard with a powertrain warranty. In this case, it’s worth getting a little extra protection for nothing.

However, suppose you’re in the dealership’s financial office, and they’re trying to tack an extended powertrain warranty onto the purchase of your vehicle. In that case, the answer is that the extended warranties are seldom worth it. This is especially true if it’s only a powertrain warranty.

Your Engine and Transmission Rarely Break

Placing an exact dollar value on a powertrain warranty is hard, but it’s pretty low. That’s because the chances of your engine or transmission going out on a car that is still eligible for a powertrain warranty is pretty low.

Manufacturers are getting better and better at making these major components last a long time. A newer vehicle’s engine or transmission will rarely give out before 150,000 miles; after that, most dealerships or manufacturers won’t offer a powertrain warranty, especially at a reasonable price.

Differentials and Transfer Cases are Even More Durable

We’ve talked to tons of mechanics, and we’ve yet to find one that saw a differential break under circumstances that a warranty would cover it. Most of the time, these damages occur when you’re towing a vehicle the wrong way or trying to pull it out of a mud pit or another off-roading mishap.

Warranties cover damages from normal wear and tear, and these kinds of damages are not considered normal wear and tear. While transfer cases are a little easier to damage, it’s still not generally caused by things that a warranty will cover.

That’s because by far, the most common reason a transfer case breaks is that you’re either shifting gears wrong or towing a vehicle the wrong way. Either way, the manufacturer or dealership will likely label the damage as negligence and void your warranty.

The truth is that if you’re driving your vehicle under normal conditions, it’s pretty much impossible to break your transfer case or differential. They’re solid metal gears, and it’s not easy to break solid metal if you’re doing everything the right way.

The Only Way to Break Your Driveshaft Is in An Accident

Seriously. It’s a metal rod that spins in circles. The only way your driveshaft breaks if you’re not in an accident is if the bearings holding it in place give out, and they don’t give out overnight.

This means you’ll feel it long before it causes any damage, and while your driveshaft is covered, the bearings holding its place may or may not be depending on the language in your extended warranty.

Even still, the chances of those bearings giving out are minimal, and they’re not expensive to replace.

There are Tons of Hidden Fees

Tons of warranties require that you get all of your maintenance done at the dealership. And the fact of the matter is, getting your maintenance done there is significantly more expensive than getting it done anywhere else. So, instead of getting a $30 oil change at Wal-Mart, you’ll need to get a $100 oil change at the dealership.

Even worse, dealership warranties will often make you get additional preventative maintenance done, even if the manufacturer does not recommend it. The more work they get to do to your car, the more they can charge you and the more money they can make.

The dealership knows that you already paid for the warranty, so they know you’ll pay for the additional maintenance, even if you don’t think you’ll need it. So, when you’re looking at the price of an extended warranty, keep in mind all the extra money you’ll be paying throughout the years just to keep it.

The Final Verdict – Is It Worth It?

The dealership will, most of the time, tack on one to two thousand dollars for an extended powertrain warranty. Additionally, you’ll be stuck getting your maintenance done there for the life of the warranty.

If you have a $2,000 warranty covering your vehicle for an additional five years or 50,000-miles, you’ll need about 16 oil changes to maintain your warranty. At $70 more per oil change, your warranty’s real cost is $3,120, and that’s if they don’t upsell you any additional maintenance fees.

What’s the average cost to replace your engine? Three to four thousand dollars. So, are powertrain warranties worth it? The answer is almost always no, and that’s even if your engine breaks.

What You Should Do with That Money Instead

Save the initial cost of the powertrain warranty and put it back for future repairs. You should also be putting a small amount back each month to cover preventative maintenance costs and just a little bit more for tiny repair costs that will come up on your vehicle.

If you start this fund while your vehicle is still new, you should have more than enough to cover necessary repairs when they start coming up, which is generally after your warranties would have expired anyway.

Dealership Warranties vs. Manufacturer Warranties

The difference between a dealership warranty and a manufacturer’s warranty is night and day. And most people don’t know the difference until they need it, but boy is there a difference.

The Dealership Warranty

If it’s an “extended warranty,” it’s typically a dealership warranty. If that’s the case, not every dealership will recognize it. In fact, it’s typically only recognized by that particular dealership. Even worse, the language in the warranty is entirely dependent on the dealership.

They can require anything that they want and bury it in the legalese of the warranty. Chances are you’ll need to take your car to the dealership for all of your routine maintenance, and you will be required to utilize OEM parts for any necessary repairs.

You’ll often need to take it to that particular dealership, not just another dealership that sells the same brand car. Failure to do so might void your warranty, and if you do end up needing to use, dealerships are notorious for trying to get out of them.

That’s because when a car comes in for repairs under a dealership warranty, it’s the dealership that’s paying for the repairs, not the car manufacturer.

The Manufacturer Warranty

While a manufacturer’s powertrain warranty will still only cover your vehicle’s engine and transmission, all dealerships for that brand recognize manufacturer warranties. They follow the same language across the country and are usually a little easier to get honored.

That’s because the dealership isn’t paying for the repairs; they are being reimbursed for them by the manufacturer.

You’ll still need to maintain a complete maintenance history of the vehicle, and often you’ll need to take them to the dealership for repairs. But since manufacturers standardize their warranties across the country, it’s not hard to figure out what you need to do for a dealership to honor them.

What Voids a Powertrain Warranty?

There are tons of factors that could lead to a dealership or manufacturer voiding your powertrain warranty. The most common reason is incomplete maintenance history. It could be that you were doing the oil changes yourself and never kept receipts, or you might not be current on your preventative maintenance.

Either way, this is the most common reason that the dealership will void your warranty. Another common practice is if you install aftermarket parts on the vehicle.

These could be performance upgrades, like turbochargers or superchargers, or they could be aftermarket sensors. Manufacturers make money when you buy OEM parts; they don’t know when you use aftermarket ones. If they aren’t getting your money when making non-warranty repairs, they have no problem voiding your warranty.

Furthermore, some of the performance upgrades might be the reason your vehicle failed in the first place. If you are pushing your cars in ways that it can’t handle, of course, the manufacturer or dealership isn’t going to honor their warranty.

Will I Void a Powertrain Warranty If I Do My Own Oil Changes?

Sometimes yes and sometimes no. If you have a dealership warranty, the chances are that you will. Dealerships factor in preventative maintenance costs when calculating the cost of selling you an extended powertrain warranty. If you perform your own preventive maintenance, they lose out on this money.

However, most, but not all, manufacturer warranties will allow you to perform your preventative maintenance as long as you maintain complete maintenance records.

This means you’ll need to record what services you completed, at what mileage, and you’ll need to keep receipts for all oil filters and fluids. Without this information, the dealership will likely deem your maintenance records incomplete and void your warranty.

Does a Powertrain Warranty Cover Sensors?

It depends on your powertrain warranty’s exact verbiage, but typically powertrain warranties do not cover sensors. Sensors are categorized in the same way as a filter or tires, making it a wearable part.

Never mind that sensors shouldn’t be going bad within a 100,000-miles. If they do go bad, you’ll be on the hook for replacing them. Powertrain warranties indeed don’t cover much. You’ll really only be able to use it if you end up needing a brand-new engine or transmission.

Summary

Powertrain warranties are like a rotting apple. They look good on the outside, but as soon as you start digging into them, you see how worthless they really are.

Still, it’s essential to know what they are and exactly what they cover. That way, if you do have a powertrain warranty, you know when you can use it, and if the dealership is trying to sucker you into one, you learn to turn the other way.