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About warranties & extended service contracts
The subject of warranties has actually become quite complex. It
involves manufacturers, sellers, lending institutions and even the
government.
Warranty Defined:
The dictionary defines a warranty as "a written guarantee of the integrity of
a product and of the maker's responsibility for the repair or replacement of
defective parts".
Magnuson-Moss Warranty Act
In January 1975 the Federal Government enacted the "Magnuson-Moss Warranty -
Federal Trade Commission Improvement Act (25,515). "An ACT to provide minimum
disclosure standards for written consumer product warranties, to define minimum
Federal content standards for such warranties; to amend the Federal Trade
Commission Act in order to improve its consumer protection activities; and for
other purposes."
The ACT defines:
"Consumer product" to mean any tangible personal property which is
distributed in commerce...."
"Supplier" means any person engaged in the business of making a consumer
product directly or indirectly available to consumers.
"Warrantor" means any supplier or other person who gives or offers to
give a written warranty or who may be obligated under an implied warranty.
"Implied warranty" means an implied warranty arising under State Law in
connection with the sale by a supplier of a consumer product.
"Service Contract" means a contract in writing to perform, over a fixed
period of time or for a specified duration, services relating to the maintenance
or repair (or both) of a consumer product.
When talking about the auto industry, the process starts when the vehicle is
built. The manufacturer supplies a vehicle with a number of different
warranties. For example, some relate to mechanical failure, some to rust and
others to emissions.
Most of the important warranties that come with every vehicle expire at about
36,000 miles or three years from the original "in-service date". Since a
three-year-old vehicle or one with just 36,000 miles is relatively young in
today's market, auto dealers perceived the need to provide additional warranties
beyond the manufacturer's basic warranty.
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