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There are several production engines that a prone to severe deterioration due to piston ring damage that appears to be started by pre-cat faiure. The pre-cat is also known as the close-coupled catalytic converter and is a feature of almost every current production car engine. Mounting the catalyst really close to the exhaust ports makes a huge difference in how quickly the catalytic converter starts working to reduce emissions from a cold-start.
Here is the story based on the pre-2003 Toyota 1ZZ engine found in many Corollas, Celicas, and the MR2 Spyder: This is the most likely order of deterioration: first the little oil holes in the early piston design clog up with coked oil (because the top of the piston is hot and the oil holes are a bit too small and you didn’t use synthetic oil, or change your conventional oil enough). Running at race track loads can also accelerate this process since oil temps get really high when racing. Then the engine starts using a significant amount of oil because the top rings wear-out from insufficient lubrication. Then the oil consumption causes engine knock at high power settings (because oil entering the combustion chamber dramatically lowers the effective Octane) which forces the knock detection system to retard ignition timing. Retarded ignition timing raises the exhaust temp significantly. Then running at high power with retarded timing causes the pre-cats to overheat and fail. The failed pre-cats allow bits of ceramic to enter the combustion chamber and completely ruin the cylinder bores, pistons and the head.
I do not understand the question: warranty cost is incurred by the OEM by definition. Most pre-cat failures occur after the warranty period on old vehicles
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