While used cars are cheaper alternatives to buying brand-new vehicles, they have a higher risk of suffering mechanical breakdowns. A used car warranty can provide you with peace of mind while potentially saving you from paying for costly car repairs out of pocket.
The Gist:
- Used car warranties include used car factory warranties, certified pre-owned warranties, and used car extended warranties from dealerships or third-party providers.
- Used car lemon laws, the Uniform Commercial Code, the Used Car Rule, and the Magnuson-Moss Warranty Act can protect you when buying a used car.
- Consider your vehicle’s reliability, mileage, and previous issues in addition to how long you plan to drive it when deciding whether to purchase a used car warranty.
This article will explain what a used car warranty is, what it covers, and how to get one. Our experts will also recommend several of the best extended car warranty companies worth considering.
What Is A Used Car Warranty?
All new cars come with a factory warranty that pays for unexpected auto repairs if your vehicle breaks down. That’s why it’s essential to check if a used car still falls under the original manufacturer’s warranty. If the car’s initial protection has expired, you’ll want to consider whether purchasing a used vehicle warranty plan from a dealership or third-party company is worth the extra cost.
A “used car warranty” is essentially a car warranty that covers a used vehicle. This can mean multiple things, including a factory warranty on a used car, a certified pre-owned (CPO) warranty, or a used car extended warranty. In most cases, the term “used car warranty” refers to an extended warranty that drivers can purchase to cover the repairs of major components on their used vehicle, such as the engine or transmission.
Don’t confuse used car warranties with mechanical breakdown insurance. This type of coverage is offered by car insurance companies, and while similar in nature, may not offer the extensive coverage and additional perks that come with a used car warranty.
How Does A Used Car Warranty Work?
If your car is covered by a used car extended warranty and breaks down, take it to a licensed repair shop for diagnosis. Your plan provider or administrator will often pay the repair shop directly minus your deductible, but only if repairs are covered under warranty.
Used Car Factory Warranties
A factory warranty is a guarantee that the dealership will help replace or cover repairs for any parts of your vehicle that are defective after purchase. However, a factory warranty does not cover things like oil changes and regular maintenance or wearable items like windshield wipers that can become worn over time.
A factory warranty still applies to a used car if it hasn’t expired, or if you purchase a CPO warranty from the manufacturer. In addition, some manufacturers offer extended warranties you can purchase for vehicles that meet certain requirements.
Certified Pre-Owned Used Car Warranties
A CPO car is a vehicle that’s guaranteed to be in good working order and will have a manufacturer’s warranty. CPOs are different from other used vehicles because the dealer will only sell CPO vehicles that are from their brand. For instance, Ford will only sell a Ford CPO and Toyota will only sell a Toyota CPO.
Keep in mind that every automaker sets its own terms and conditions for coverage through its CPO warranty program. Most come with coverage comparable to bumper-to-bumper and powertrain warranties along with perks like roadside assistance, trip interruption coverage, and towing services.
Extended Used Car Warranties
An extended used car warranty prolongs your factory warranty to protect your vehicle against covered mechanical breakdowns for a period that lasts longer than the new car limited warranty. True manufacturer-backed used car warranties can be purchased from the automaker that built your vehicle or are included with the purchase of a CPO used car.
Extended Warranty Options For Used Cars
You can purchase an extended used car warranty from a third-party provider or the dealership where you bought your used car. There are pros and cons to each, so weigh your options carefully before making a decision.
Aftermarket Extended Used Car Warranties
Purchasing coverage from a provider like Endurance, CARCHEX, or CarShield gives you more freedom and flexibility than buying from a dealership. Most third-party warranty providers allow you to purchase coverage for your vehicle at almost any time or mileage. You’re also not limited when it comes to repairs, since most providers allow you to take your vehicle to any licensed repair facility.
Used Car Manufacturer Extended Warranties
You can purchase extended warranty coverage from the manufacturer, usually through a brand dealership. Most dealerships will offer you a powertrain warranty at minimum, which covers your vehicle’s engine, transmission, and drive axle.
A manufacturer may also provide extended coverage through a separate administrator, which could give you more coverage choices and term lengths. Most extended warranties from dealerships can only be bought while your car is still covered under its original factory warranty.
How To Transfer A Warranty On A Used Car
The first thing that needs to be done when transferring a warranty on a used car is to contact either the dealership or warranty company. You need to let them know about the sale of the car or the transfer of the warranty within the first 30 days of owning the vehicle.
The buyer of the car will need to give contact information and documentation such as receipts to the dealership or warranty company. Lastly, try to get all the information about the type of warranty that you are transferring. You’ll want to know the coverage, price, and length of the warranty that is being transferred so that you’re well informed if you ever need to use it.
Do Used Cars Come With A Warranty?
The only used cars that automatically come with a warranty are certified pre-owned (CPO) vehicles. However, there are instances in which a manufacturer’s warranty is still on a used car that you buy. There are also some cases where a used car may be covered under an extended warranty purchased by a previous owner that can be transferred.
What Does “As Is” Mean When Buying A Used Car?
Buying a car “as is” means that the car you’re buying does not have a warranty. Until you purchase a warranty for your used car, all costs associated with the vehicle will come out of your pocket.
When buying a used car, be sure to find out whether or not the vehicle comes with a warranty. The best thing to do is to ask the dealer or seller questions and check the buyers guide.
How To Check If A Car Is Under Warranty
Along with asking questions and checking the buyer’s guide, you can find out if your used car is still under factory warranty by checking your vehicle identification number (VIN) and calling your dealership. From there, the dealership can give you all the details on any needed warranty information.
Used Car Lemon Law
California, Connecticut, Massachusetts, Minnesota, New Jersey, New Mexico, and New York are currently the only states with relatively robust used car lemon laws. These laws provide a required used car warranty that is based on the condition of the car. The dealer will have to repair any problems the vehicle presents for a certain amount of time. If the dealer keeps trying to fix problems and nothing is improving, the dealer is required to give you a new vehicle or refund you.
What To Do If Your State Doesn’t Have Used Car Lemon Laws
If you live in a state where there aren’t any used car lemon laws, there are still federal laws that will help you. The Uniform Commercial Code (UCC), the Federal Trade Commission’s (FTC) Used Car Rule, and the Magnuson-Moss Warranty Act are three nationwide laws that can help protect you when buying a used car.
Uniform Commercial Code
The UCC is a set of guidelines that regulate commercial dealings. This code ensures that transactions are uniform across state lines and don’t conflict with one another.
The UCC provides an implied warranty by stating that a vehicle should be fit for transportation. This can be effective in states that don’t allow dealers to use an “as is” designation for a vehicle as an excuse to disclaim implied warranties provided through the UCC.
Used Car Rule
Formally known as the Used Motor Vehicle Trade Regulation Rule, this requires car dealers to display a window sticker known as a “buyers guide” on all used vehicles that are for sale. This allows you to see if the dealer is offering a warranty and provides detailed information if so.
Magnuson-Moss Warranty Act
This act allows the FTC to put in place disclosure standards for written car warranties and sets resolutions for breach of warranty or service contract obligations. This holds warranty providers accountable to fully disclose and back their products, and it’s meant to protect consumers from deceptive warranty practices.
Used Car Warranty Coverage
Before you purchase an extended car warranty, it’s important to decide what type of coverage you want. Keep in mind that almost all used car warranty providers and dealerships exclude routine maintenance like oil changes, tire rotations, and windshield wipers.
Used Car Warranty Plans
Several levels of warranty coverage are available to drivers, with each covering different vehicle components and repairs. Below are some of the most common types of used car warranties:
| Used Car Warranty | What It Covers |
|---|---|
| Bumper-to-bumper warranty | Covers most vehicle components except for a short list of exclusions |
| Powertrain warranty | Covers a vehicle’s most essential parts like its engine, transmission, and drive axles |
| Drivetrain warranty | Covers all components included in a powertrain warranty minus the engine |
| Corrosion warranty | Pays for repair costs related to rust |
How Much Does An Extended Warranty Cost?
Used car warranty costs vary depending on the provider. While the prices listed below provide an estimate of how much the best coverage could cost, your used car warranty quotes will look different. Extended car warranty costs depend heavily on factors such as:
- Vehicle make, model, model year, and mileage
- Chosen coverage level
- Contract length
- Deductible
- Provider
Used Car Warranty Cost
Our 2022 extended car warranty survey of 1,000 respondents found that about half paid between $1,600 and $3,200 in total for an extended car warranty. Some providers require you to pay the costs upfront, while others allow you to pay monthly.
Here’s a closer look at what respondents reported paying for an extended car warranty in our survey:
Used Car Warranty Prices
To give you a better idea of used car warranty prices, we collected cost information from five of the best used car warranty companies. The following chart shows the quotes we received for powertrain plans on a 2012 Subaru Outback with 88,000 miles. All plans include a $100 deductible.
| Used Car Warranty Company | Term Length | Financing | Total Cost |
|---|---|---|---|
| 1. Endurance | 5 years/ 51,000 miles | $121 for 30 months | $3,615 |
| 2. CARCHEX | 6 years/ 60,000 miles | $193 for 18 months | $3,470 |
| 3. CarShield | Unlimited years
and miles | $140 monthly | Varies |
| 4. Protect My Car | 4 years/ unlimited miles | $116 for 36 months
with one month down payment | $4,176 |
| 5. autopom! | 4 years/ 48,000 miles | $180 for 36 months
with one month down payment | $6,480 |
Is A Used Car Warranty Worth It?
As vehicles age, the likelihood of mechanical issues increases. Used car warranty plans are popular for older vehicles since they may protect drivers from unexpected and expensive car repair costs.
Should You Buy An Extended Warranty On A Used Car?
Consider the following when determining whether to purchase a used car warranty:
- Vehicle reliability: With a reliable vehicle, it’s less likely you’ll have to actually use an extended warranty. Look up your model’s reliability rating and read customer reviews to see what other car owners have to say.
- Vehicle mileage: High-mileage cars have a greater chance of mechanical failure. Older vehicles may benefit greatly from an extended warranty for cars over 100k miles.
- Issues you’ve already faced: Many extended car warranty contracts have exclusions for preexisting conditions, which means that certain car repairs might not be covered. Additionally, most contracts have a waiting period before coverage kicks in to ensure that your vehicle is in proper working condition.
- How long you plan to keep your vehicle: An extended auto warranty might increase the resale value of your vehicle on the open market, but won’t increase your trade-in value at the dealership.
- Your need for roadside benefits: If you’re hoping for roadside assistance, towing, and rental car reimbursement, a used car warranty is an excellent way to find protection with added benefits.
Buying A Used Car Warranty
Some used cars may come with a limited warranty attached. However, you will more than likely need to purchase coverage from your dealership or a third-party company if you want continued coverage when that limited warranty eventually expires.
Do You Need A Warranty For A Used Car?
Here are a few important things to note about used car warranties:
1. Check When The Manufacturer’s Warranty Expires
You shouldn’t purchase an extended warranty if the original warranty is still active on your used car. Most factory warranties come with a 3-year/36,000-mile bumper-to-bumper warranty and a 5-year/60,000-mile powertrain warranty, but check with your manufacturer for details on what its factory warranties entail.
If you purchase your used car from a dealership, you can find out its warranty status by reading the buyers guide, which must be displayed. If the car is being sold “as is,” it means the car is no longer covered under warranty.
2. Read Through Vehicle Service Contracts
Whether your vehicle comes with a used car warranty or you decide to purchase coverage, it’s essential to read through the contract and any fine print. Each warranty should specifically outline who is legally responsible for repairs and what vehicle components are excluded if your car has a mechanical breakdown. Powertrain plans protect the basic components of your car like the engine and transmission, while bumper-to-bumper plans cover most of the vehicle minus a short list of exclusions.
You’ll also want to spend time researching the contract administrator or third-party warranty company before you purchase coverage. Our team recommends that you check the company’s Better Business Bureau (BBB) and Trustpilot profiles for a look at the overall customer experience. Trustpilot provides a rating based strictly on customer reviews, while the BBB will give its own score on top of a customer review score.
3. Expect To Pay More If Your Car Is Older Or Has Higher Mileage
Used car warranties can be pricier than vehicle protection plans for new cars. This is because third-party warranty companies weigh age and mileage as factors when providing extended car warranty quotes. If your vehicle is older or has higher mileage, the chances of it breaking down are higher, so there’s a greater chance you will use your extended warranty.
4. Compare Extended Warranty Coverage Options And Pricing
Before you sign with a company, reach out to several used car warranty companies for quotes. Comparing estimates and coverage plans will ensure that you find the best deal for your budget.
Used Car Warranty Providers
Many third-party extended warranty providers offer coverage if your factory warranty has already ended. Our comprehensive and industrywide review found that the best used car warranty companies are Endurance, ForeverCar, Olive, CarShield, and CARCHEX, based on an analysis of over 50 providers.
| Used Car Warranty Company | Our Score Out of 5.0 | Coverage Levels | Highest Contract Term |
|---|---|---|---|
| 1. Endurance | 4.6 | 6 | 200,000 miles |
| 2. ForeverCar | 4.5 | 4 | Unlimited miles |
| 3. Olive | 4.5 | 3 | 185,000 miles |
| 4. CarShield | 4.5 | 6 | 300,000 miles |
| 5. CARCHEX | 4.4 | 5 | 250,000 miles |
With each of the best used car warranty companies we reviewed, you can purchase a vehicle service contract almost any time at a reasonable rate. We’ve provided further information on the best used car warranties below.
#1 Endurance: Best Coverage
Endurance is a direct warranty provider, meaning it handles all claims itself without any middleman involved. The company offers a Select Premier plan specifically designed for drivers of higher-mileage vehicles, with mileage limits up to 150,000 miles. It provides protection for all vital vehicle components in addition to select air conditioning and electrical components. Endurance plans are available in all states except California.
Keep reading: Endurance warranty reviews
#2 ForeverCar: Best Value
We name ForeverCar as the company with the Best Value. With four coverage levels that can give you protection for unlimited miles, you can choose the plan that works best for your car even if it has high mileage. The ForeverCar Platinum Plus plan covers some wear and tear parts, which isn’t common with extended warranties.
#3 Olive: Best Online Process
Olive offers three levels of warranty coverage ranging from basic coverage to bumper-to-bumper coverage. These plans are available for vehicles up to 185,000 miles. Compared to most other extended warranty companies, Olive is different because it doesn’t have a waiting period before your coverage starts.
#4 CarShield: Best Monthly Payments
CarShield plans are some of the longest-lasting in the industry. We found that certain plans will provide coverage up to 300,000 miles. The Platinum plan is the best option for used cars with higher mileage, as 15 major systems are covered, including the air conditioning, steering, fuel pump, suspension, brakes, and engine.
Keep reading: CarShield reviews
#5 CARCHEX: Best For Used Cars
CARCHEX is one of the most reputable extended car warranty providers in the industry. The company is one of the best options for older vehicles since it can cover cars up to 250,000 miles. The Silver plan is good for used vehicles with over 60,000 miles and covers powertrain parts like the engine and transmission and items like the brakes, suspension, and steering.
Keep reading: CARCHEX reviews
Used Car Warranty Quotes
When you buy a used car, make sure to compare all of your warranty options to find the best deal for your situation. Read through each vehicle service contract carefully to understand what type of warranty coverage is offered and what vehicle repairs are excluded.
Used Car Warranty: Conclusion
A used car warranty can save you money by paying for unexpected auto repairs. Along with researching recommendations, it’s important to take into account cost and coverage information before purchasing a plan from a dealer or an aftermarket provider.
Used Auto Warranty: FAQ
Below are some frequently asked questions about used auto warranties:
How We Rate Warranty Providers
Our review process aims to deliver consistent and unbiased assessments of extended auto warranty providers. While there are multiple qualities that make a warranty company successful, our review team focuses on those we believe are the most important for consumers:
- Reputation: It’s important that an extended car warranty company is able to meet its claims obligations. Companies with a strong rating from the Better Business Bureau (BBB) score well in this category. Established providers with a long history of reliable service also receive positive marks.
- Coverage: Our team of experts looks at the number of extended warranty plans available, as well as term limits, exclusions, and added benefits like roadside assistance. Ratings also take into account the availability of maintenance coverage.
- Cost: Cost can be difficult to compare between providers because so many factors impact vehicle service contract pricing. To determine our cost score, we perform a secret shopper analysis for a variety of vehicles and plans and consider available deductibles.
- Transparency: Our team evaluates the availability and transparency of each company’s contracts, as well as whether each provider offers a money-back guarantee.
- Customer Experience: We listen to real customer sales calls and comb through reviews on sites like the BBB to learn about customer experiences. Warranty companies with a low volume of complaints score well in this area. We also consider the availability of mobile apps and chat features.