Used Car Warranties: Everything You Need to Know

Used Car Warranties: Everything You Need to Know

What is a Used Car Warranty?

A used car warranty (or extended car warranty) is any protection plan or warranty that covers repairs after the manufacturer’s warranty expires. You can get extended car warranties directly from the manufacturer, or you can get protection plans from individual dealers and third-party providers alike.

  • A manufacturer’s warranty covers new automobiles, typically lasting four years or 50,000 miles (Hyundai tops the list with 5 years or 60,000 miles), whichever comes first. Deductibles are usually not included in the manufacturer’s warranties.
  • Extended warranties are car warranties purchased to extend the manufacturer’s warranty for a specified period after the manufacturer’s warranty has expired. Extended warranties have to be purchased separately and usually come with a deductible.

How long does the manufacturer’s warranty last?


Manufacturer warranties vary widely depending on the brand, make, model, and year of your vehicle. Expect vastly different warranty information from Honda and Dodge, for example. The manufacturer of your car determines the length of your factory warranty. Many well-known automakers provide bumper-to-bumper guarantees three years and 36,000 miles, as well as powertrain warranties of five years and 60,000 miles.

Luxury car manufacturers frequently combine powertrain and bumper-to-bumper coverage, resulting in 4-year/50,000-mile factory warranties. When your manufacturer warranty expires, you lose protection on your vehicle, and an extended warranty can save you a lot of money. Purchasing extended coverage from a third-party source is often substantially less expensive than buying an extended warranty through the manufacturer.

What is an extended car warranty?

An extended auto warranty is a vehicle service contract offered by dealerships, manufacturers, and independent providers for a fee above the purchase price that covers the cost of repairing or replacing specific parts for a period of time or a set number of miles beyond the manufacturer’s warranty period.

Although purchasing an extended auto warranty is typical when purchasing a new automobile, a service contract may usually be obtained at any time before your warranty expires.

Routine maintenance, such as oil changes, new tires, and new brakes, typically are not covered by extended warranties. Roadside assistance is usually available as a separate purchase.

What’s Covered Under An Extended Warranty?

An extended warranty is essentially a vehicle insurance policy that protects you from costly, unforeseen repairs. The differences between the various warranty plans may appear minor, but they’re significant. If you have significant concerns about a vehicle’s electrical system or the powertrain is your primary issue, make sure the warranty you’re purchasing covers the items you need.

Before you sign, read the inclusions and exclusions carefully. Extended warranties do not cover scheduled maintenance items, including oil changes, timing belt replacements, and tune-ups. Most extended warranties exclude items that wear out, like windshield wipers and brake pads.

Auto Warranty vs. Vehicle Service Contract: What’s the Difference?

Auto Warranty

An auto warranty is a warranty offered by the manufacturer of your vehicle when you purchased it, and it covers the car for a specific amount of miles or years. Manufacturers and dealers sell auto warranties, which a third party cannot offer. The manufacturer endorses the guarantee, covering specific repairs if your vehicle is under a particular age or mileage.

Vehicle Service Contract

You may be offered the option of acquiring a vehicle service contract when shopping for your next new or pre-owned vehicle. A car service contract, often known as prepaid maintenance, covers scheduled maintenance services as stipulated by the manufacturer for a set time period or mileage. Vehicle service contracts can often be customized to match your individual needs, whether given by a selling dealership, manufacturer, or a third party. A vehicle service contract is an excellent option for out-of-warranty used cars or those wanting more protection during long-term ownership.

When it boils down to comparison, an extended vehicle warranty and a vehicle service contract are practically the same things. Both of these features protect your car in the case of a mechanical failure. However, after the warranty expires, the vehicle service contract will ensure that your vehicle is protected coverage for an extended period of time.

Types Of Aftermarket Auto Warranties-Comprehensive Warranty

It is the highest degree of protection provided by automotive manufacturers. It starts on the first day the car is sold. Comprehensive warranties, sometimes known as “bumper to bumper warranties,” typically cover practically all systems and parts of your vehicle, except for wear and tear items such as the brake pads and tires. This warranty is always set up with exclusionary wording. If an item isn’t stated as an excluded item by the manufacturer, it’s covered if it breaks down. Wearable parts are the majority of the components that are excluded. Over time, these components are predicted to deteriorate (such as tires, brake pads, and spark plugs). Alternatively, they may only break or become damaged due to an accident or user error (such as glass or body panels).

-Powertrain Warranty

A powertrain warranty covers everything used, from the power to the wheels. If one of these vital vehicle components fails or becomes unusable, your powertrain warranty will repair or replace it at no charge. These are some of the vehicle’s most critical components and some of the most expensive to fix or repair. It is such a relief knowing that your car’s most expensive systems are fully insured. Powertrain warranties have become a must-have when buying a car, and most dealerships now provide them. If a mechanical problem occurs in a powertrain and the contract indicates that it will be covered, the dealership or the manufacturer will pay for the repairs.

-Corrosion Warranty

Natural corrosion is covered under the corrosion warranty for a particular time. Some manufacturers and possibly a local dealership provide this as an add-on warranty. Corrosion coverage typically covers corrosion or rust on your vehicle’s surface after the paint, and protective layers have been compromised due to natural exposure or accident. Natural disasters are more common in desert or coastal regions, containing more particulates. Corrosion and rust can become a significant issue, infiltrating the mechanical components of your car.

-Emissions Warranty

The manufacturer provides this warranty to repair and fix any damages that could make your car fail the government emissions tests. The range is exact to manufacturing flaws that fail. Chemical byproducts of a combustion engine are released into the environment as emissions. This warranty is described in two areas of automotive warranty information: performance and design warranty and fault warranty. It’s vital to take your time and carefully inspect the warranty’s coverage information. The efficiency of the whole engine is intimately linked to the emission control components.

-Hybrid Component Warranty and EV Component Warranty

These warranties cover repairs to the battery, electric motor, and other parts found in a hybrid or electric vehicle. Electric motors require far less maintenance than gasoline engines. However, the battery in an electric or hybrid automobile can be worth a lot of money, and changing it is one of the most pricey restorations in the industry. As a result, these elements are independently covered by this warranty.

-Extended Warranty

An extended warranty extends beyond the standard warranty on new equipment. Extended warranties are an additional expense calculated as a percentage of the item’s retail price. The terms and conditions of extended auto warranties may differ from the terms and conditions of the original warranty. These may not cover anything other than mechanical failure caused by everyday use. Commercial use, owner abuse, and deliberate destruction are all possible exclusions. They may also exclude aspects of a vehicle that wear out over time, such as tires and lubrication.

Car Warranty Inclusions and Exclusions


-What do used car warranties cover?

Most used automobile warranties cover at least all of the engine’s and transmission’s internally lubricated parts. Some used automobile warranties cover various issues, while others do not. Contracts tend to cover less as the automobile gets older and mileage increases to keep warranty costs and selling prices low. Bigger and better warranties are occasionally available for newer automobiles with lesser mileage, especially for secondhand cars with low mileage, and that is only a few years old.

-What do used car warranties NOT cover?

Some essential pieces of your car can wear out over time, and car warranties don’t cover normal wear and tear. If these parts are damaged earlier than expected, they are protected by car warranties. Car warranties do not cover routine maintenance. Failure to follow the manufacturer’s recommended maintenance schedule may result in the termination of your vehicle’s contract.

Sensors, electrical components, and items related to the engine, such as starters, fuel pumps, and alternators, are frequently excluded from higher mileage warranties and things that are not a piece of the engine, such as steering and air conditioning. Some automobile manufacturers provide a maintenance plan as part of the purchase price. Most automobiles come with complimentary maintenance for 3 yrs or 37,000 miles.

An extended used car warranty: Is it worth it?

Pros of an extended warranty

1. Peace of mind

Peace of mind is one of the most significant advantages of an extended warranty. If a car part covered by the warranty fails, you are not responsible for the repair price. With this, you can enjoy the ride rather than worry about your powertrain warranty expiring next month.

2. You can keep your car longer

Unexpected car repairs that spiral out of control are frequent reasons for buying a new vehicle. With the extended auto warranty, you can use your car without buying a new one for a long time.

3. Choose the coverage you need

Warranty providers offer a variety of customizable plans, including powertrain warranty coverage and bumper-to-bumper warranty coverage, that can be made to fit your specific needs. If you own an older vehicle with more than 100,000 miles on it, extended warranties for automobiles over 100,000 miles can give coverage that you wouldn’t get otherwise. Some companies offer roadside assistance and towing services, and some even provide trip interruption insurance to frequent travelers.

4. Dealers take care of the paperwork and payment

Extended warranties purchased through a dealership and sponsored by the auto manufacturer are often more pricey. Still, in exchange for the higher price, the dealer handles all paperwork, and the auto manufacturer pays the dealer directly for services done. Furthermore, these are provided with an OEM-backed warranty that usually allows the car owner to have the vehicle repaired anywhere in the country and any dealership selling the same brand, removing the limits that other third-party warranty providers may have.

Cons of an extended warranty

1. You may feel tied down to your current vehicle

Extended warranties are frequently affordable the sooner you acquire them. You may be hesitant to purchase a different vehicle if you have invested in an extended auto warranty for several years.

2. Extended warranties don’t cover all repairs

Even the most comprehensive warranty will not cover every single part of your vehicle. Your extended car warranty will not cover repairs if your automobile is damaged in an accident or by the weather. It is preferable to file a claim for those damages with your insurance company. After a breakdown, extended car warranties only cover repairs and replacements of selected parts.

3. It is expensive

An extended car warranty isn’t cheap, and it can add up quickly. The higher the price, the better the benefits, but you never know how often or whether you’ll utilize the warranty.

4. You need to wait for the coverage to kick in

Extended warranties do not cover pre-existing problems, and waiting periods are enforced to ensure that your vehicle is in good operating order before coverage begins. It means that extended warranties aren’t valid for the 1,000 miles or the first 30 days after purchase.

How much does an extended warranty cost on a used car?

Since the price of your warranty is determined by several factors, including the type and condition of your car, auto warranty providers do not utilize a standard pricing scheme. The cost of an extended warranty is around $2,500. However, it can range from $1,000 to $4,000 or more, depending on the plan. Instead of having predetermined rates, third-party providers and manufacturers determine the cost of an extended auto warranty based on factors such as the level of coverage you choose, your vehicle, and your deductible.

Can you buy the extended warranty later?

An extended car warranty provides repair coverage after the manufacturer’s standard warranty has expired. This extended auto warranty will cover the majority of severe breakdowns and will keep repair costs stable because parts and labor prices fluctuate over time. It’s worth noting that you can buy this vehicle warranty at any time before the retailer’s contract expires. You can purchase an extended warranty after the manufacturer’s warranty expires, although the cost will be significantly higher.

What voids a car warranty?

Misuse of the vehicle

* It refers to any form of racing or competition and overloading the vehicle or off-roading. Anything that isn’t part of the vehicle’s routine operation could be considered misuse. For these offenses, some manufacturers will nullify your entire warranty, and the decision is usually left to the discretion of the warranty administrator. Your warranty claim may be rejected even if there is no evidence but signs of abuse.

Damages from natural disasters

* Extended warranties do not cover any damage caused by natural disasters like earthquakes, floods, or fires. That said, it’s critical to insure your car with ‘Acts of God’ or ‘Acts of Nature’ insurance to cover the expense of repairs if mother nature strikes suddenly.

Neglect

* Some people are so careless about their vehicle’s condition that it would take years for them to get an oil change. The dealer is not liable for engine damage if you neglect to bring your vehicle in for service during regular maintenance.

Altered vehicle mileage

* Automobile manufacturers are strict about this. Changing the mileage on your vehicle could void your warranty. The dealer will not identify the precise mileage if the odometer has been tampered with, disconnected, or replaced. You can obtain a car history report to support your warranty claim as proof.

How to check if my car has an extended warranty?

Going through the official documents you received at the time of purchase is the easiest way to locate information about your warranty. It should include information about your factory and your extended warranty used vehicle service contracts. Contact your dealer if you have misplaced your paperwork. They should be able to take information from corporate records and tell you all the details of the factory warranty and your extended warranty plan after sharing a few details about your car.

Can you cancel a car warranty?

Yes, you can cancel your extended auto warranty at any time and receive a prorated refund for the amount of coverage that you haven’t used. Your car payment will not decrease if the warranty was included in your loan, but you may be able to pay off the car sooner if the refund is taken from your balance. Some warranty companies have a strict time limit, commonly between 30 and 60 days, during which you can cancel your extended warranty without paying any expenses. Even in this instance, you should be able to terminate your contract.