Is an oil leak covered under warranty?

Common causes of oil leaks

Oil leaks can occur for several reasons, and pinpointing the root cause is crucial for determining if the issue is covered under a warranty. Some of the most common causes include:

• Worn or damaged gaskets and seals: Over time, these components can degrade due to heat, pressure and age, leading to leaks.
• Oil pan damage: Striking road debris or driving over curbs can puncture or crack the oil pan.
• Loose or worn drain plugs: During oil changes, the drain plug might not be properly tightened or could have a worn washer, leading to leaks.
• Valve cover gasket failure: These gaskets seal the top of the engine and are known to leak as they age.
• Crankshaft or camshaft seal wear: These rotating engine components have seals that can wear out and leak oil.
• Improper oil filter installation: An incorrectly installed or poor-quality oil filter can also be a source of leakage.

Signs and symptoms of an oil leak include:

• Visible oil puddles under the vehicle after parking
• Burning oil smell due to oil dripping on hot engine parts
• Blue smoke from the exhaust, indicating oil is being burned inside the engine
• Low oil levels on the dipstick between oil changes
• Engine warning lights, especially the oil pressure light, turning on

Early detection of these signs can help mitigate more expensive repairs and may strengthen your case for warranty coverage.

Are oil leaks covered under warranty?

The short answer to this question is yes: Some oil leaks are covered under warranty.

The longer answer is that it depends on the coverage, the cause of the leak, how long it has been going on and related failures. (In some cases, a leak would be covered if another issue caused it — but not always.)

Your oil leak might be covered under warranty, but it depends on the specifics of your coverage and situation.

Oil leaks can result from several different issues, so it’s important to get the most thorough evaluation possible. If the failure is a straightforward gasket issue, your warranty might not cover the repairs because gaskets are considered wear items designed to degrade over time. (Warranties don’t always cover components like gaskets, tires, brakes and windshield wiper blades, as they’re designed to wear with use.)

Similarly, your warranty provider will likely deny the oil leak claim if you’ve damaged the oil pan or underside of the vehicle. Remember that warranties are not insurance, so they don’t provide coverage for damage caused by wrecks and other accidents.

You might also have difficulty getting coverage if your negligence caused the leak. If you forgot to get an oil change or have not kept up with routine maintenance in other areas, the warranty provider may balk at paying the claim, as regular care is required to prevent unnecessary failures.

» LEARN: What voids a car warranty?

The definitions in many warranty contracts are ambiguous enough to allow companies some wiggle room to avoid paying the entire repair cost. Many define gaskets and other oil-related components as “internally lubricated engine components,” which are generally covered. Still, there is no shortage of upset owners online complaining about their expensive oil leaks.

When it comes to gaskets, it’s worth checking the exact language in your warranty contract to see if you’re covered.

For example, an extended warranty reviewer from North Carolina told us: “The first time I took it in, they found I had an oil leak and it needed oil pan gaskets. They refused to pay for that. Although my warranty says gaskets and seals, they said, ‘That's normal wear and tear.’”

However, another reviewer said of the same company: “I had an oil leak two months ago. … When my pick-up was ready, Endurance already took care of the bill. I just took care of the deductible for the rental car myself. Everything went exactly as I expected.”

What types of warranties cover oil leaks?

All new cars sold in the U.S. come with a manufacturer’s warranty that protects the owner against defects for a period of time.

• Factory warranties: Automakers offer different lengths of coverage, but there are two main types of warranties. As the name suggests, powertrain warranties cover under-the-hood components, including your engine, transmission and other parts. The limited warranty, which some people call “bumper-to-bumper” coverage, protects most other features.
• Extended warranties:Extended warranties, on the other hand, offer more levels of coverage. Most warranty companies offer powertrain coverage, and their midrange options add protection for climate control systems, internal components, cosmetic pieces and more.
• Exclusionary coverage: Some companies even offer exclusionary coverage, which means that the list of noncovered items is much shorter than the list of covered components. Exclusionary plans are usually the most comprehensive and offer the best protection at the highest cost.

» MORE: Car warranty guide: what you need to know

Does your extended warranty cover oil leaks?

Many extended warranty providers offer coverage for oil leaks, but it’s always best to check which plans best fit your needs.

What to do if your warranty claim is denied

Even if you believe your oil leak should be covered, your warranty provider may deny your claim. If that happens, you still have options:

• Review your contract: Carefully read through your warranty agreement to verify whether the component or issue should be covered. Look for definitions of "wear and tear," "internally lubricated parts" and other terms the provider may use to deny the claim.
• Ask for clarification: Contact your warranty provider and request a written explanation of the denial. Understanding their reasoning can help you build a case if you choose to dispute the decision.
• Request a second opinion: Consider getting a diagnosis from a different certified mechanic. If their findings differ significantly from the first, it may support your case.
• File an appeal: Most warranty companies have a process to appeal claim decisions. Submit documentation such as service records, a second opinion and a written rebuttal.

How much does it cost to fix an oil leak?

Engine oil leaks can cost anywhere from $100 to more than $2,000 to fix, depending on the cause. While the parts might not be that expensive — gaskets and seats are often less than $100 — the labor involved can cause the price to climb. The more expensive repairs involve head gasket issues, crankshaft seats and timing system problems.

It’s also worth noting that determining the cause of the leak can require extensive diagnosis, which adds to the price of repair.

» MORE: Head gasket replacement cost