ElI5 How do car manufacturers offer powertrain warranties without losing money?

Question

ElI5 How do car manufacturers offer powertrain warranties without losing money?

In: Other

Answer 1

In theory, the customer never uses the warranty. You’ll have some cases where an engine or something may need replaced before the warranty period is over, but that number is hopefully small enough that the manufacturer is still making plenty of money from vehicle sales to be able to cover the cost.