Used Car Warranties

Many used cars sold these days come with some type of warranty.  Some are for very short periods of time, some carry the remaining manufacturer’s warranty, and some are offered with an extended warranty.  Used car warranties are available from main dealers or from warranty specialists.  By dealing with a warranty company directly, you my save money - and always shop around; prices very greatly.   All used car dealers must post a "buyers guide" in the window of each vehicle for sale.  This is a federal requirement, and lets the potential buyer become aware of any warranty included, or if the vehicle is being sold ‘As Is’.  With this type of sale, once you drive the vehicle from the dealership, the cost of repairs is your responsibility.  One of the most important things to remember when signing a warranty is that you understand and have read every line of the contract.  Know what it covers, how long it is in effect, where the repairs must be made, and which parts are covered.  Always ask a lot of questions and don’t be afraid if the answer to a question should be obvious, it is your money and your vehicle, so you should know how repairs will be paid for.

Remains of a Manufacturer's Warranty

If the used car is less then three years old, the original manufacturer's warranty may still be valid.  Make sure this warranty is transferable to a new owner, and determine how much longer it will be in effect, so you can get additional coverage if neccesary.   Most new cars are sold with at least a three-year/36,000-mile warranty.  So, if you buy a car that is from one to three years old, it will still be under the factory warranty.  If there is anything wrong with the car when you bought it, the problem will be fixed. 

Service Contracts

A service contract provides repair and/or maintenance for a specific period, cost extra and is sold separately.  Make sure the service contract on the used car does not duplicate the warranty coverage.  You can determine the value of a service contract by figuring whether the cost of repairs on your used car is likely to exceed the price of the contract. The service contract covers all parts and systems.  Again, understand all claims, as some terms can be confusing.  Usually repairs and routine maintenance, such as oil changes, have to be done at the dealership, and there are often cancellation fees if the contract is voided.  The dealer must check the appropriate box on the Buyers Guide of the used car if a service contract is offered. 

Implied Warranties

State laws hold dealers responsible if used cars they sell don't meet reasonable quality standards.  This is an implied warranty, and it is basically unspoken and unwritten promises from the seller to the buyer of the used car.  There is no specified time period for implied warranties. The most common type of implied warranty is the warranty of merchantability: The seller promises that the product offered for sale will do what it's supposed to. It does not cover everything that could go wrong.  A dealer's liability on the used car is judged case-by-case.  The dealer can't delete this protection. Any limit on an implied warranty's time must be included on the written warranty.

Limited Warranties

A limited warranty means the used car has certain conditions and limitations on the parts covered, types of damage covered and/or time period for which the agreement is valid.  Most used car warranties are limited, and their coverage varies. Some parts or systems may be covered by a full warranty, while others are covered by a limited warranty.

Full Warranty

What's covered by the warranty of a used car depends on the car and what the company has offered.  A full warranty, whether the car is new or used, includes the following: Anyone who owns the vehicle during the warranty period is entitled to warranty service.  You have the choice of replacement or a full refund if the dealer can't repair the vehicle.  You only have to tell the dealer that warranty service is needed in order to get it, unless the dealer can prove that it's reasonable to require you to do more.   Coverage on used cars often excludes wipers, fluids, belts, tires, battery, accessories, and windows.

Extended Warranties

Most dealers offer the option to purchase extended warranties on used cars, but be cautious of these.  If you do purchase an extended warranty, make sure understand what all coverage means and make sure it covers both breakdown and wear and tear and it is effective the day you purchase it.  It should come from a well-funded and insured car warranty business, and offer a $0 deductible.

As Is - No Warranty

When a used car is sold "as is," this means that once the car is taken out of the lot, the owner is responsible for all repairs.  Some states don't allow "as is" sales for many used vehicles.   This type of purchase for a used car may be risky, but it also will include the least expensive vehicles.

Reading the Buyers Guide

A Buyers Guide is, by law, required to be included on all sales of used vehicles for dealerships.  This is a very useful and important sheet of information, as it holds the dealer to anything that was agreed upon.  It will usually be found on the side window of a used vehicle.  Information that must be included is: what percentage of the repair cost the dealer will pay; the specific parts and systems that are covered by the warranty. The back of the Buyer's Guide lists warranty term for each covered system, measured in periods of time or mileage; and in states that don't allow "as is" sales, an "Implied Warranties Only" disclosure is printed on the Buyers Guide in place of the "As Is" disclosure.  Dealers who offer a written warranty on the used car must complete the warranty section of the Buyers Guide. The dealer must check the appropriate box on the Buyers Guide to indicate whether the warranty is full or limited.

Warranties make a used car purchase more valuable and often give the buyer confidence about buying the vehicle.  There are many types of warranties, so do not lose out on this valuable addition to the car by failing to understand exactly what is included.  Most used car warranties require you to have your used car serviced according to the manufacturer's schedule, but you should be able to take your car to any garage for servicing and repairs.  However, some warranties require the servicing be done at the dealership.