Used Car Warranties: Agreements, Policies, Rules, and Myths

For first time buyers, purchasing a used car can be both exciting and nerve wracking. One of the most confusing aspects is understanding warranties. Unlike new cars, used vehicles often come with a mix of agreements, policies, and rules that can be hard to decipher. Here’s a clear guide to help you understand what to expect and address some common myths.

What Is a Used Car Warranty?

A used car warranty is a promise from the seller or dealer that covers certain repairs and services after you buy the car. Unlike new car warranties, which are usually more comprehensive, used car warranties can vary greatly in terms of what they cover and how long they last. Understanding these terms is essential to avoid surprises later.

Types of Used Car Warranties

There are different types of warranties available for used cars. Here are a few you might come across:

1. Manufacturer’s Warranty:
Some used cars may still be under the original manufacturer’s warranty. If the car is relatively new, you might benefit from the remaining coverage, which can include repairs to major parts. Make sure to check the car’s paperwork or ask the seller to confirm if any of this warranty is still in effect.

2. Extended Warranty:
An extended warranty is an optional service contract that you can purchase, often through the dealer or a third party. It can cover repairs for a longer period or provide coverage that wasn’t included in the original warranty. However, extended warranties can be pricey, so it’s important to weigh the cost against the benefits.

3. Dealer Warranty:
Some dealerships offer their own warranties on used cars, usually for a shorter period, such as 30, 60, or 90 days. This can cover basic repairs, but the extent of coverage depends on the dealership’s policy. Always read the details carefully to know exactly what is and isn’t covered.

What Do Used Car Warranties Cover?

Coverage under a used car warranty can range from basic to comprehensive. Here are some typical components that might be included:

• Powertrain: Covers essential parts like the engine, transmission, and drivetrain.
• Bumper-to-Bumper: More comprehensive, covering a wide range of components but often excluding items like tires and brakes.
• Corrosion or Rust: Addresses issues related to the car’s body, though this is less common in used car warranties.

Always review the warranty details and ask questions if something isn’t clear. This way, you’ll know what parts are protected and under what conditions.

Common Myths About Used Car Warranties

When it comes to used car warranties, there are many misconceptions that can lead to confusion. Here are a few myths to watch out for:

1. All Used Cars Come with a Warranty.
Not true. Many used cars are sold as is, which means you are responsible for any repairs from the moment you drive away. It’s important to ask the dealer if a warranty is included and, if not, explore whether you can purchase an extended one.

2. Extended Warranties Cover Everything.
Extended warranties might offer more coverage, but they are not all-inclusive. Each policy has limitations, and certain repairs or parts might not be covered. Always read the fine print to understand what is actually included.

3. If the Car Is Certified Pre-Owned, It’s Fully Protected.
Certified pre-owned (CPO) cars do come with warranties, but the coverage can vary significantly between manufacturers. Some CPO programs offer better warranties than others, so it’s important to compare these when shopping for a used car.

Policies and Rules You Should Know

1. Transferability:
Some warranties can be transferred to a new owner if the car is sold before the warranty expires. This can add value to your car if you decide to sell it later. Make sure to ask about this feature when considering a used car warranty.

2. Deductibles:
Some warranties require you to pay a deductible when you need repairs. Check how much this is, as it can vary. If the deductible is high, it might make small repairs more expensive even if they are covered.

3. Regular Maintenance Requirements:
For the warranty to remain valid, you might be required to keep up with regular maintenance, such as oil changes and inspections. Missing these could void the warranty, leaving you responsible for repairs that might have been covered.

Final Thoughts: Make an Informed Choice

Understanding used car warranties can seem complex, but taking the time to learn about them will help you make a more informed decision. Always ask questions, read agreements carefully, and don’t be afraid to seek clarification. By knowing what’s covered and what isn’t, you can better protect yourself from unexpected costs and drive away with confidence.