What kind of documentation do you need in order to determine what caused the problem? Are you going to personally inspect every car that has a claim? And how long is it going to take to pay a claim. If people have to wait around for days or weeks thats going to cause major issues.
Also, 99% of the cars here are already modded..if you wont offer warranties on cars that have parts other than those that you sell, then who do you plan on selling to?