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.