Are Used Car Warranties Worth It – When you buy a used vehicle, you may have an option to purchase a used car warranty. But what exactly does a used car warranty cover? To find out what your warranty might cover, first check if the manufacturer’s warranty still exists and is transferable, or if an extended warranty is available. And be sure to count the potential costs before you sign a contract.
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Are Used Car Warranties Worth It
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If you’re in the market for a used car, you’ll probably want to know what, if anything, might be covered by a warranty in case you need repairs in the future.
New cars usually come with manufacturer warranties. But if you’re buying a used vehicle, it’s crucial to check if there’s any kind of warranty and what it might cover. You’ll want to look closely at any warranty to see if it’s worth the extra cost, if you have to buy it separately.
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When we refer to “used car warranties,” we’re simply referring to any kind of warranty you can get for a used car, whether it’s backed by a manufacturer or a dealer.
Information about any used car warranty should be available in what is called a “Buyer’s Guide”. The Federal Trade Commission, or FTC, requires dealers to display this on the used cars they sell. You can usually find the Buyer’s Guide displayed in the car window.
The Buyer’s Guide tells whether a vehicle comes with a warranty or is sold “as is”. Buying a car as-is means that if you have any problems or if your vehicle needs repairs after you drive it off the lot, you’re probably out of luck. If the car comes with a warranty, the Buyer’s Guide should include the percentage of repair costs that the dealer must pay as part of the warranty, if any repairs are required.
Different states restrict which vehicles can be sold as-is or have different rules about such sales. For example, if a used car sells for more than a certain price, an as-is sale may not be allowed, and some states require different disclosures in the Buyer’s Guide for an as-is sale.
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You can check with your state’s attorney general’s office and contact them to find out what sales rules apply to your state.
If the dealer’s Buyer’s Guide says your car is covered by a warranty, but your contract says the sale is as-is, the dealer must follow the terms of the Buyer’s Guide. What is stated in the Buyer’s Guide supersedes anything that may be conflicting in your contract regarding warranty coverage.
If you are buying a used car directly from a private person, they are usually not required to publish a Buyer’s Guide or provide a warranty; there may be implied warranties, but you may not want to hang your hat on them. You should sign a written contract that states what you agree to be covered.
There is a possibility that the manufacturer’s warranty still applies when you buy a used vehicle. You may find this in the “systems covered/duration” section of the Buyer’s Guide.
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To get the benefits of any included warranty, you must know what is included and confirm that it is transferable. Ask the dealer for the vehicle’s warranty documents. Once you review what is covered, along with other details such as expiration date/mileage, you can contact the manufacturer to verify that it is accurate.
An automaker’s warranty often covers a vehicle’s first three years or 36,000 miles, although powertrain warranties can last longer.
The warranty must detail the vehicle’s service contract and explain who is legally responsible for repairs. Check the fine print for all the details and make sure all your questions are answered before you buy your vehicle.
You’ll also want to check who you’re buying the warranty from, as in some cases the dealer may be selling a contract from a third-party warranty company. You can research the company’s auto warranty policies and BBBrating from the Better Business Bureau.
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Quick Facts Can I void my car’s warranty if I don’t go to the manufacturer or dealer for repairs?
A manufacturer or dealer cannot claim that your warranty is void because another repair shop has done work or maintenance on your vehicle. But the dealer or manufacturer may require you to use certain repair facilities if the repairs will be free under warranty.
When you buy a used vehicle, you may have the option of purchasing a service contract, also known as an extended warranty. With a service contract, the dealer agrees to perform or pay for certain repairs or services to the car. You can purchase coverage for an additional cost.
Not sure about getting a used car that doesn’t come with a warranty? Think the cost of a warranty might not be worth it?
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Set money aside for repairs. If you can stash away some cash, it can help cover anything that needs to be fixed in the future. And if there is nothing to repair, you can keep saving the money for your next car or use it for some other need.
To rent a car. If you go this route, your rental car may come with a warranty that covers repairs. In turn, you may not have to worry about incurring a major unexpected expense. There are pros and cons to renting a car, but it can be a cost-effective alternative to buying.
When buying a used car, check carefully whether a warranty is available and what type of warranty or service contract it is, and what it may cover. If there isn’t one, you’ll want to look closely at the details to see if an extended warranty is the best option for your financial situation, or if you can handle paying for any repairs without any warranty.
About the Author: Jackie Lam is a Los Angeles-based money writer who is passionate about helping creatives with their finances and cultivating community among entrepreneurs. Its customers include Fortune 500 companies and FinTech startups, and… Read more.is compensated by the companies on this site and this compensation may affect how and where offers appear on this site (such as ordering). it does not include all lenders, savings products or loan options available in the market.
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