A warranty is provided to save you major expense in case of any mechanical failure or breakdown. In general, warranties cover engine and transmission. Some of the warranties also cover the air conditioning system, anti-lock breaks and computer systems. There are different categories of warranties.

Manufacturer's warranty: This type of warranty is applicable on new vehicles and remains valid even if ownership changes. This type of warranty provides all of the services free of cost to the owner. It includes diagnosis of the problem and removal and replacement of parts. Many of the dealers will provide a rental car when the repairs are in process. Be aware that the law in most states permits the user to choose either a replacement vehicle or a refund if their vehicle cannot be suitably repaired after a certain number of attempts.

Warranties related to previously owned vehicles: The rules related to this type of warranty differ from place to place, dealer to dealer, and car to car. On some used cars, depending on age, you can take advantage of the manufacturers' warranties. With a dealers' warranty, you may get as little as 30 days warranty. In most cases, they provide a warranty that covers inspection items.

Dealers' in-house warranty: Many dealers offer in-house warranties. Of course, it includes the only that work which was done at the dealership. Many of the dealers provide a free six months warranty on a 50 – 50 basis on used cars. In this type of arrangement, half of the cost is born by the user where as the other half is covered by the dealer. This type of arrangement can be beneficial to both parties.

Implied warranties: There is a law related to this type of warranty in all states as well as in the federal trade commission. According to this law anything you purchase must work for a particular period of time. The time limit varies from product to product.

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