With the sheer quality of cars being made in Japan, local companies had to begin to step up their game and improving the quality of the vehicles themselves was just one method of doing this. Another was to ensure that customers had confidence in their vehicles, in order to increase warranty coverage. It wasn’t long before the warranty started to become a major component of the marketing and a big selling point for many motor vehicles. Remember the mid 80s pitch of Lee Lacocca for Dodge, Plymouth and Chrysler products, declaring that they had the best warranties in the business? Or more recently, the big splash which was made by Hyundai when, emboldened by their improved quality, they upped their powertrain coverage to no less than ten years (or a hundred thousand miles), declaring it to be the best warranty in the whole of America?
A warranty is both assurance and insurance that your vehicle will continue to work at least through the whole of the period which is stated by the contract. Sometimes, a warranty will come with the vehicle but as with insurance which you purchase via an agent, it never comes for nothing. There are rooms filled with actuaries and accountants who are continually calculating the costs of outstanding and future warranties and boiling it down to the exact dollar figure they will have to add on to the price of every motor vehicle.
Given the perilous issues they have had with visibility and finance recently, Chrysler and GM have both had to increase their warranty coverage and now also powertrain coverage for as much as five years or a hundred thousand miles. Even with the amount of recalls they have to make in recent times, Honda and Toyota both still enjoy a solid consumer perception in terms of quality, so they don’t tend to need the best warranty in their class. In contrast to this is Mitsubishi, whose response to their sales tanking in the United States was to boost its warranty coverage (which is now on a level with Hyundai) to cover the whole vehicle for five years or sixty thousand miles and the drivetrain for as much as ten years or a hundred thousand miles for the great majority of its models.