Car Insurance vs. Car Warranty – What’s the Difference?

When buying a car, it is important to be aware of the different terms that you may encounter in the process. It is not enough that you are an expert when it comes to knowing the best cars or the parts of a car engine. You also need to know how you can be protected as a consumer and as a driver. So, aside from familiarizing yourself with the warranty for the car that you are buying, you also have to get the best car insurance in North Carolina so you’re covered against accidents, bodily injury, property damage and legal costs.

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Car insurance and car warranty are two of the terms that you would hear when you buy a car. It does not matter if the car is brand new or used. You need to have both. But first, let me ask you, do you know the difference between the two?

Car Insurance

Having car insurance is your legal responsibility, as it is required by law. Car insurance has the same purpose as that of getting a life insurance. You get one for financial protection. For instance, if you get into an accident and you were at fault, your car insurance can cover the expenses. Without it, you will need to pay for all the damages from your own pocket, which can easily escalate into the tens of thousands.

Depending on your chosen coverage, your car insurance can also pay for the repair of your vehicle. If you have comprehensive coverage, you’re protected financially in cases of fire, theft, vandalism, or natural calamities. If you have collision coverage, your coverage includes collisions with inanimate objects such as other vehicles, light posts, and trees.

Car Warranty

A car warranty is also referred to as an insurance policy, but it does not cover physical damage. Rather, it provides protection and coverage on the cost of parts and labor when a mechanical or electrical problem occurs. Car warranties given by manufacturers differ, so it is always recommended that you carefully read the fine print.

When you buy a new car, the dealer will assure you that they will cover repairs and defects incurred within a specific period only or until you reach a pre-determined mileage. Understandably, there are certain conditions which will not

be covered by a warranty such as accidents, poor maintenance, abuse, and negligence.

From these definitions, we can already identify the difference between car insurance and a car warranty. Having an insurance policy means that your insurance provider will financially protect you, as the car owner against risks associated with driving. On the other hand, a warranty is a guarantee from the car manufacturer or dealer that the product you buy from them is in good condition. In case something does not function as intended, the warranty will cover it.

Although there are major differences between the two, both are important to car owners. Buying a car is a big financial decision so make sure that you are covered. Choose a manufacturer or dealer which can give the best warranty and an insurance provider that can provide the best car insurance that suits your needs.


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