Generally speaking, a vehicle warranty is a contract which guarantees the seller will cover specific repairs or replacements for a certain amount of time after purchase. A drive train warranty, for example, will cover the cost of repairs if any part of the vehicle's transmission system stops performing as designed. Warranty coverage only lasts for a specified period of time and/or accumulated mileage, however, which means the buyer may have to purchase an extension or pay for the repairs or replacements through other means. One of the most popular warranty offers for new car buyers is known as a bumper to bumper warranty, also known as a new car warranty or wrap-around warranty.

The name bumper to bumper warranty implies that the entire vehicle is covered from one end to the other. This is not necessarily the case, but it is true that almost every part of a new car will be repaired or replaced while under the terms of a bumper to bumper warranty. The standard warranty period for a bumper to bumper warranty is three years or 36,000 miles, although policies can vary from dealership to dealership. This time or mileage arrangement can work against the buyer, however, since the warranty expires when either condition is reached. A two year old vehicle would no longer be covered under warranty once the 36,000th mile is reached. Conversely, a four year old vehicle with only 10,000 miles would no longer be covered under a bumper to bumper warranty, either.

There are some significant exceptions to the coverage provided under a bumper to bumper warranty. The language contained in most new car warranties specifically defines the word "wear." If a wire connected to the vehicle's distributor becomes too worn to function properly, it can usually be replaced for free under the terms of the warranty. However, certain parts of the vehicle which experience natural wear and tear during normal operation are not covered under the warranty. Tires, windshield wiper blades, light bulbs and even parts of the bumper are not cover under a so-called bumper to bumper warranty. Owners must pay for the replacement of these items out of their own pockets.

It is possible for vehicle owners to purchase additional warranty coverage after the initial bumper to bumper warranty expires. Some experts suggest this may not be a wise investment compared to other insurance options, but others say an extended warranty on expensive systems such as the drive train does make economic sense. A standard bumper to bumper warranty is generally offered to new car buyers only, although a dealership can always offer other types of warranty protection as an incentive to potential customers. It is important for new vehicle owners to study the terms of any warranty so there are fewer misunderstandings if repairs become necessary in the future.