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Best Car Warranties For Used Cars – Extended warranties — called vehicle service contracts — are designed to act as a type of HMO for your vehicle. You pay a monthly premium as a form of insurance against catastrophic failure in your vehicle. If this failure occurs, depending on what type of plan you have, you will be refunded the cost of repairing it, less whatever you agreed to when you signed the contract.
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Best Car Warranties For Used Cars
An extended warranty can seem like a waste of money when you’re buying a new car. After all, most people don’t keep cars for more than five years, and these new cars are usually protected by a solid warranty anywhere from three to 10 years and mileage between 36,000 and 60,000 miles. mile.
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But what about a used car, especially a used car that has passed the time or mileage specified by the original vehicle warranty? What about a used car bought not from a dealer, but a private party? Is it possible and / or a consultant to take a service contract on these vehicles?
CARCHEX is one of the largest, most comprehensive providers of extended vehicle warranties on the market. They have been a trusted name in the business for 20 years.
Autopom! is known in the industry for customer service and responsiveness. The company works directly with 2600 professional repair centers and has a customer advocacy program.
Toco Warranty Corporation is a relative newcomer to the industry, but they are making a splash. They maintain an excellent reputation with an A+ rating from the Better Business Bureau. Toco is known for offering affordable plans with no down payment and the ability to pay monthly.
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Auto Talk has spent the past year taking a deep dive into the warranty industry for the benefit of our long-term readers and listeners. Our process for deciding on the best warranty companies of the year was very unique, involving in-depth research and a unique personal shopping effort. We collected over 50 databases across all companies surveyed to filter and inform our selection process. Car Talk reviews the key principles for each company:
The short answer is that most American consumers don’t have the money to pay for great service. Here’s why:
Used car prices remained flat in 2020, thanks to the pandemic and the impact of consumer spending. Prices peaked in April, but then returned to an all-time high in October, according to the Manheim Used Vehicle Index, a model of auction values at Manheim locations across the country. In 2021, there is no reason to expect that the average price of a used car will be less than $20,000.
This is an investment that is becoming more challenging in 2021, as buyers struggle with rent, unemployment and all the other expenses needed to live. . This means they are taking out a larger loan to pay for the car. American consumers pay – on average – more than $19,000 for used cars, and they do so for 48 or even 60 months.
What Should You Know About Used Car Warranty?
$20,000 for five years on a car that’s 18 months out of warranty at all — even with the extended warranty provided by CarMax and the manufacturer’s Pre-Owned Certificates — it’s a big gamble. A $19,000 car loan with 3.11% APR for 60 months is $342 per month. Extend that loan to 48 months, which most banks will be willing to do with higher mileage or older cars, and that payment jumps to $421 a month.
The last thing you want to do when you’re paying $421/mo on a car loan is to worry about paying a $4,000 total rebuild out of pocket. This is the benefit of buying an extended warranty on a used car.
One of the most important things to consider when purchasing a vehicle warranty is coverage. Every company that offers such plans will provide detailed information about what is included in your contract. Read it carefully and make sure that you enjoy taking pictures. It must be awful to buy a warranty only to need it later and find out that the expensive repair you need is not covered by your particular plan. Here is a list of some common repairs and their costs for your consideration:
Finding the exact age of your vehicle to qualify for a service contract can be difficult on most warranty websites. Mopar-backed vehicle protection plans offered by Chrysler Warranty Direct are detailed in our FAQs: To qualify for a traditional preventive maintenance contract, your vehicle must be a model year less than 10 years old, and the vehicle must have less than 125,000 miles.
Best Warranty Types For Used Cars
Mopar also offers a different type of warranty for vehicles that go through its expert pre-owned program. You can purchase a service contract that extends the benefits of the pre-owned program as long as you register before the vehicle reaches 80,000 miles, and as long as the Limited Warranty remains in effect.
Most other vehicle warranty providers will offer a used car warranty for vehicles that are 10 years old or have 125,000 miles or less. The difference between Mopar or GM warranties and those offered by other third parties is that they do not have a Pre-Owned Warranty.
No one wants to spend money on what amounts to an insurance policy if it is not needed. Used cars wear out eventually. If you have a comprehensive “Top-Tier” car warranty plan, it can undoubtedly be useful to you during the time you own the car. However, a Consumer Reports study that examined extended warranty plans found that most policyholders do not reimburse for repairs what they pay for the plan’s value.
But is it really about dollars and cents? If you are someone on a tight budget who is more than happy to pay for an additional warranty plan each month to avoid one big repair bill you won’t have the resources to cover, a used car warranty plan can be right for you.
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A third way a used car warranty can be worth it if you own a vehicle that has proven to have a costly defect or two. Maybe you love a vehicle, and you want to keep it. A used car warranty plan can allow you to sleep better at night knowing if your car ends up with a problem that you won’t have to pay out of pocket to fix.
Make sure you meet all program requirements. If you don’t do everything the manufacturer recommends these plans won’t work for you. They also won’t work for you if you buy a used car and don’t have full maintenance records. Most of the negative reviews we found in our research all attributed to the warranty buyer not having complete vehicle service records, therefore, their claim was denied.
If your car is not covered by one of the special service contract companies, check CARCHEX. They offer service plans for all products, new and used. They also have an A+ rating from the Better Business Bureau, meaning they respond to any complaints they receive, and probably won’t call you late at night.
Carchex is a service contract vendor, so in every level of coverage, they have many offers from third-party vendors that can meet your needs. For example, at the highest level, (Titanium Coverage) Carchex offers plans from six agencies that run from seven to 10 years of coverage. You also have the option of running with Carchex. They have 21 different plans from Titanium, Platinum, Gold, Silver and Bronze.
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For used car owners, you can pretty much avoid the Titanium and Platinum plans, unless you’re buying a Range Rover and you’re not worried about money. The Titanium plan includes almost everything, but because of that, it will be very expensive. The Platinum plan is a “clear coverage” plan, meaning it only includes a list of specific items. This list is long, though, and this protection will be expensive, too.
You probably don’t want to take a photo of bottom-of-the-barrel Bronze, either. It is not expensive, but it only covers the car for five years, as opposed to seven in all other plans.
The aptly named “Gold” plan is Carchex’s Goldilocks plan, offering affordable pricing and coverage with a seven-year term.
Select Auto Protection is relatively new to the Extended Warranty industry, but they’ve got a lot of benefits in it.
