Used Car Warranty

In this article, we discuss common situational and lifestyle factors that play a role in deciding if an extended warranty is right for your used car. You can start researching costs right away by reaching out for free, personalized quotes from some of our top recommended providers, listed above.

As vehicles age, the chances that particular parts will wear down and stop working increases. An extended warranty, also called a vehicle service contract, is one way to protect your used vehicle from potentially costly repairs once your factory warranty ends.

What is a Used Car Warranty?

A used car warranty is a contract that promises to pay for the cost of certain car repairs after the manufacturer’s warranty expires. These warranties work similarly to the manufacturer’s warranty. When you experience a mechanical breakdown, you take your vehicle to a licensed repair shop for diagnosis. If your repair is covered by your warranty, the administrator will pay the repair shop, minus your deductible.

When you buy a used car, it may still be under a manufacturer warranty, as many of these warranties are transferable to new owners.The dealership is required to post a buyer’s guide on each vehicle it sells. This guide will clearly state whether the vehicle comes with any type of warranty. Beware of verbal warranty promises not included in the buyer’s guide. Even diligent consumers who check recall history on government sites, ask about dealerships’ used car sales policies, or get pre-sale inspections can experience hidden defects.

Used Car Lemon Law

While some states have enacted laws like the New York State Lemon Law (which requires dealers to give consumers written warranties) to protect consumers from bad used car purchases, other areas of the country leave consumers with little protection in the used car market.

Is There A 30-Day Warranty On Used Cars?

Some dealers provide short 30-day warranties, but these usually only cover basic components and require you to visit the selling dealer for repairs. In some states, 30-day warranties are required by law. In states with no warranty requirement, including a warranty with used vehicle sales are up to the dealer. 

Used Car “As Is” Warranty

In states where 30-day used car warranties aren’t required, most used cars are sold “as is”.If the buyer’s guide says the car is sold “as is,” the dealership has no responsibility to cover any type of repair after you buy the car.

Exactly what car parts are covered differs from contract to contract, so make sure to read the fine print. Some extended warranties only cover major components of a vehicle, like the engine and transmission. Other contracts may be described as bumper-to-bumper warranties and cover practically every vehicle part with some exclusions.

There are several types of used car warranties. Some used cars come with a factory warranty, and some dealerships and manufacturers offer extended warranties. There are also extended warranty companies that offer aftermarket warranties.

Used Car Warranty Plans

You have many options to choose from when getting a used car warranty. Each provider offers different types of services, Used car warranty coverage can be grouped into a few major categories known as coverage levels. The different coverage levels offered by warranty providers are sold as specific used car warranty plans. We go into more detail about the most common used car warranty plans below:

Types of Used Car Warranties

While there are many used vehicle warranty plans, there are only a few basic coverage levels, which we describe below:

• Bumper-to-bumper used car warranty: Many drivers value a warranty covering any repairs their vehicle needs. A bumper-to-bumper warranty covers even minor repairs, such as oil changes and tire replacements. Of course, bumper-to-bumper warranties are more expensive than less comprehensive warranties. Still, they are ideal for drivers who want all repairs taken care of in exchange for a consistent monthly payment.
• Stated component warranty: Stated component warranties have a long list of items covered. Of course, stated component warranties vary widely in terms of what repairs they cover. Many stated component warranties have very long contracts, and drivers must read these contracts thoroughly to ensure they get the coverage they seek.
• Used Car powertrain warranty: Some drivers only need their warranty to cover powertrain repairs that can cost thousands of dollars. Powertrain warranties generally cover damage to any component that delivers power to a vehicle’s wheels.

Used Car Warranty Exclusions

Like the manufacturer’s warranty issued through the dealership when you bought your new car, an extended warranty covers the cost of parts and labor to repair specific components of a new vehicle if they break down through normal use. This means that repair costs that results from misuse, neglect, or an accident are not covered.

How Long Does A Used Car Warranty Last?

Used car warranties protect your vehicle for a predetermined time or distance in miles. Most used car warranties provide coverage for up to 3 years/36,000 miles. This means the warranty covers repairs for the first three years after signing or after you’ve driven 36,000 miles, whichever comes first.

A used car warranty costs between $70 and $108 per month on average, depending on how long you’d like to make payments. While used car warranties can be paid for entirely upfront, most are typically paid for on a monthly basis, with payments ranging from about $100 to $120 on average. It’s essential to remember that terms also come with a mileage limit. In instances where the maximum mileage is met first, costs per year can vary. 

Used Car Warranty Prices

In order to give consumers a better idea of used car warranty prices, we reached out for quotes from different providers for coverage for a 2012 Subaru Outback with 88,000 miles.

*Because the CARCHEX plan offers a longer coverage term, it’s helpful to look at plans in terms of extended car warranty cost per year of coverage. When you take the total price divided by years, you get a price per year of about $534 for Endurance and $432 for CARCHEX.

Used Car Warranty Quote

Getting free quotes from reputable providers to compare pricing and coverage is the best way to know how much one will pay for a used car warranty. While the price list above can help give us a better idea of used car warranty costs, the actual prices a specific person will pay varies based on a multitude of factors related to his or her unique situation. Factors that affect the cost of a used car warranty include:

• The provider
• The make and model of your vehicle
• The type of warranty and level of coverage you select
• The deductible amount

Before considering a used car warranty, it’s important to determine whether or not you need one in the first place. If you own a newer vehicle, it may still have bumper-to-bumper coverage.  After the bumper-to-bumper warranty expires, a powertrain warranty could continue for a couple of years. You’ll want to know the limits of the factory warranty period to maintain coverage for repairs once it expires.

Is A Used Car Still Under Warranty?

Before buying a used car extended warranty, you should check to see if your car is already covered by a manufacturer warranty. You can check if a used car is still under warranty by entering its VIN into the manufacturer’s website. You can also make an educated guess by taking note of the car’s year and mileage and then comparing it to the manufacturer’s warranty terms. 

Are Used Car Warranties Worth It?

For drivers with vehicles that didn’t come with a warranty or own a vehicle that is nearing the end of its factory coverage, a used car warranty can be worth the cost. Many drivers feel more comfortable with making small monthly payments over time for a used car warranty versus paying for repairs unexpectedly. The appeal of used car warranties are evident by their popularity, as obvious by the almost 18 billion dollars spent on extended car warranties in the United States in 2019, according to IBIS World.

If your vehicle isn’t covered and you feel more comfortable with paying small, regular, and predictable installments versus paying for large, unexpected repair bills, a used car warranty may be worth considering. In order to determine whether or not you should purchase a used car warranty, the best place to start is by determining your repair costs. 

Repair costs depend on your vehicle’s make, model, and mileage, along with how well you maintain it. You can use sites such as RepairPal.com and Edmunds.com to estimate how much you will pay for repairs and maintenance annually. 

After estimating your repair costs, next calculate your monthly budget to determine if you will be able to cover your estimated repair costs reliably. If this doesn’t sound manageable and you’d prefer a monthly warranty payment that spreads the cost out over time, a used car warranty may be worth considering.

If you have determined that a used car warranty is likely worth it for you, the sections below serve as a guide to aid you throughout the purchasing process in determining the best warranty for your needs. 

How To Get A Warranty On A Used Car

If you have decided a used car warranty is right for you,  you’ll want the best coverage that fits your price and needs. Follow the steps below to achieve this:

1. Decide if you need an extended warranty
2. Figure out whether or not a used car warranty is worth it and how much you are willing to pay
3. Determine which type of used car warranty provider fits your needs
4. Speak directly with at least three providers about their prices and coverage options
5. Don’t be afraid to negotiate and look for discounts
6. Figure out which offerings your car is eligible for and what plan best fits your needs.

Where Can I Buy A Used Car Warranty?

Drivers can purchase extended warranty coverage from a variety of places. In the sections below, we provide an overview of the strengths and weaknesses of each. 

Extended Factory Warranty

Many auto manufacturers sell their own extended factory warranty plans. These plans compare well with third-party warranty providers in terms of price and coverage. However, they come with severe limitations. While an aftermarket service plan can be used at any ASE-certified repair facility, most manufacturer warranties will only cover repairs done at brand dealerships.

In addition, most service plans from manufacturers only have one or very few coverage options. By comparison, third-party warranty companies typically offer several levels of coverage that give you more choice over what components you do or do not want to protect.

Many manufacturers also place stricter limits on the age, mileage, and model of the car you want to protect or limit coverage to “certified” vehicles only.

Certified Pre-Owned Warranty

There is one type of car virtually guaranteed to have a warranty: a certified pre-owned vehicle. A certified pre-owned vehicle is a used vehicle that has been inspected by the manufacturer and approved for a longer warranty term. CPO inspection checklists can include hundreds of items. Since factory-trained technicians inspect the vehicles, you can have confidence that the cars are in good condition. Of course, you’ll pay slightly more for a CPO vehicle.

A CPO warranty comes with the vehicle. You don’t have to purchase anything extra (though many manufacturers will give you the option to add more years of coverage).

Typically, a CPO warranty includes powertrain coverage for several years plus bumper-to-bumper coverage for a shorter period. Manufacturer warranties such as Kia’s 100,000-mile powertrain warranty that get cut short for secondary buyers are often reinstated for the full term for CPO buyers.

Used Car Dealer Warranty

While the warranties offered by dealerships are usually manufacturer-extended or CPO, some even provide aftermarket extended warranties for used cars. If a dealer is offering to finance a warranty package with a used car they are selling you, and this extended warranty will likely cost much more because the loan accrues interest, just like your car loan. In addition to paying additional interest, a car warranty purchased from a dealer is likely to cost more because dealerships usually earn extra commissions for warranties they sell.

Mechanical Breakdown Insurance For Used Cars

Your car insurance company may offer mechanical breakdown insurance as an option. Mechanical breakdown insurance (MBI) is another auto protection product that covers the cost of vehicle repairs.

The significant difference between MBI and an extended warranty is that your car insurance company sells MBI as a policy add-on. Also, since many programs don’t cover vehicles past 100,000 miles, MBI policies generally have limited coverage options compared to third-party warranty providers.

Aftermarket Used Car Warranty

Last but not least, drivers interested in coverage for their used vehicles can purchase an extended warranty from an aftermarket provider. Getting a used car warranty from a third-party provider gives you more freedom than shopping at a dealer.

While there’s only one manufacturer for your car, there’s an abundance of used car warranty companies that offer flexibility in price, auto repair shop, terms and conditions, and coverage. Instead of covering a limited amount of “certified” vehicles from one brand like manufacturer-backed used car warranties, aftermarket warranties tend to have options for a much wider range of vehicles.

Here is a breakdown of the most popular aftermarket extended warranty companies, based on Motor 1 survey results.

Pros And Cons Of Extended Warranties On Used Cars

The next two sections highlight the benefits and disadvantages of purchasing an aftermarket extended warranty for used cars. 

Benefits of Third-Party Used Car Warranties

For those who are considering purchasing a used car warranty from a third party provider, the list below provides an overview of what to expect:

• Repair facility options: Most used car warranty companies allow car owners to choose from a list of approved repair shops where they want their vehicles serviced.
• Added perks: Third-party warranty customers may receive additional benefits, such as roadside assistance, towing, and gas delivery.
• Coverage choices: A greater variety of plans is available from third-party companies, which typically offer tiered contracts that vary in length and coverage.
• Transferability: Almost all third-party car warranty plans are transferable, which could increase the appeal and value of your car for future buyers.

Disadvantages of Third-Party Used Car Warranties

There are some drawbacks to extended warranty coverage. Choosing an independent warranty provider means you won’t get access to genuine manufacturer parts. Additionally, there’s no guarantee all your warranty claims will be covered, regardless of the provider. There’s also the chance you’ll buy coverage and never need to use it.

How To Buy A Warranty On A Used Car

The only way to find the best extended warranty for your own used car is to shop around and compare costs. There is no single best extended warranty for everyone. Different drivers have different coverage needs and may receive different quotes based on where they live, the car they drive, and a number of other factors. Below are a few things to look for in used car warranty companies.

• Coverage limits: Considering your vehicle’s mileage, you’ll definitely want to find a provider that covers plenty. If your car is past the 200,000-mile mark, CARCHEX would be the best option at that point.
• Customizable coverage: When you get a quote, the company will probably give you multiple options for length and mileage for a single plan. You can customize coverage according to your driving habits and whether you drive more or less than the average person.
• Plan choice: You’ll also want to shop with used car warranty companies with many plans. Different levels of coverage will cover other systems on the car, and they’ll have different price points, too.
• Transferable: If you plan on selling your vehicle in the next couple of years, make sure the company offers transferable car warranty plans All of the providers we’ve covered allow you to transfer the warranty to a secondary buyer.

In this article, we provided a complete overview of used car warranties. In addition to touching on the basic rules and regulations surrounding used car warranties, we explained the basics of used car warranty coverage and cost. Finally, we discussed when it may be a good idea to consider a used car warranty, used car warranty options, and highlighted some of the top providers of extended warranties for used vehicles.

Used Car Warranty Companies

Based on reviews our team has conducted on the best used car warranty companies on the market, we recommend reaching out for free quotes from these providers:

Endurance: Best Coverage

Endurance offers direct-to-consumer extended warranties, which means that warranty services and claims are all handled by Endurance. There is no middleman or underwriting provider. Here are a few things our review team likes about Endurance:

1. Excellent customer service: We found many positive customer service reviews for Endurance including a high score from the Better Business Bureau (BBB), which are highlighted in our Endurance warranty review.
2. Treats employees well: Endurance was named a Great Employer at the 2019 Stevie Awards. The company was selected due to its “impressive set of employee benefits and activities, particularly given the size of the enterprise.”
3. Direct model: Endurance’s direct-to-consumer model avoids the complexity and inconsistency of third-party warranty administrators.

Comprehensive benefits: In our industry-wide review, Endurance had the most comprehensive benefits with its Endurance Elite Benefits program. The program includes roadside assistance, rental car reimbursement, tire repairs and replacements, key fob replacements, and more.

CARCHEX: Best For Used Cars

CARCHEX offers a total of five extended warranty plans, each of which can be customized. All plans include 24/7 emergency roadside assistance, gas delivery, trip interruption services, and lockout services.

Here are a few reasons our team gave CARCHEX top marks in our CARCHEX review:

1. Sample contracts available for review: CARCHEX provides sample contracts online so you know exactly what you’re getting before you purchase a plan.
2. Industry partnerships: CARCHEX has partnered with leading experts such as CARFAX, Kelley Blue Book, and Edmunds.com. This is a strong indication that it is a top provider for automobile owners.
3. Exceptional service: Both experts and customers think CARCHEX provides great service. If you’re looking for an extended warranty on a used car, CARCHEX could be worth it.

Struggling to decide between CARCHEX and Endurance? Read our CARCHEX vs. Endurance review.