Can You Get a Warranty for a Used Car Purchase?

Buying a used car can be a great way to save money while still getting the vehicle you need. However, unlike buying a brand-new car that comes with the manufacturer's warranty, purchasing a used vehicle can feel a little less secure. After all, you want to ensure you are covered in case something goes wrong with the car.

While a newer used car might still have a manufacturer's warranty at work, what options do you have if your vehicle's warranty has expired (your current car is more than three years old)? Read on to learn the different types of warranties available for used cars and whether getting a used car warranty is worth it.

Can you get a warranty on a used car?

Yes, you can. Major brand dealerships usually offer approved used car warranties, which last up to 1 year (12 months). You can also buy coverage directly from a dealer or a third-party warranty provider in your area. Different warranties will provide varying levels of coverage, so it's essential to ensure you understand exactly what will and won't be included in your extended car warranty before committing to it.

A warranty might outline a specific list of around 200 elements in its terms and conditions, but the average car has over 5,000 individual parts. In effect, such a warranty could represent poor value for money. Be sure to read through exactly what is covered and pick a warranty that includes all the electrical and mechanical parts of your vehicle.

What is an extended or used car warranty?

Many new vehicle warranties only last a few years, three years being the most common. Therefore, if you have bought a car older than this, you will need to cover the cost of repairs yourself. That's where a used car warranty comes in. Whether you have reached the end of the new vehicle warranty provided by your manufacturer or just bought a used car, there are a host of third-party warranties available.

Types of used car warranties

There are four major types of warranties that can apply to a used car. These include.

Dealer-provided warranty

Vehicle dealers are not legally obligated to offer warranties. However, you can purchase a dealer warranty when you buy a used car from an independent dealership.

The length of these warranties varies depending on the dealership and the age of the vehicle, with newer vehicles often having longer warranties. You might be given a used car warranty for free or have the option to purchase one. In addition, you can extend the length of your warranty, which applies to both free and paid-for policies.

Third-party warranty

You can also buy a used car warranty directly from a third party, independent of the dealer. This includes vehicles purchased privately.

Several companies offer such policies, and these firms provide different levels of coverage depending on how much the warranty costs. However, most companies won't sell warranties for cars over ten years old or those that have covered over 100,000 miles.

Approved-used warranty

An approved-used warranty is available for up to 2 years after buying the car. It's a comprehensive agreement provided through the manufacturer's own scheme of selling used cars. However, be sure to clarify with the dealer what the warranty covers and what it doesn't cover.

Remainder of manufacturer warranty

These listed warranties are available with used cars. However, it's possible to find a used vehicle that is still covered by the original manufacturer's warranty, which could spare you the cost of buying additional coverage. Most automakers offer a 3-year or 60,000-mile warranty with their new vehicles, while some offer more worthwhile warranties.

What does a used car warranty cover?

The coverage for your used car will depend on the manufacturer and the type of policy you choose. However, most warranties will cover the following:

Car repairs

One of the main reasons most people choose to buy a used car warranty is to get coverage for certain vehicle repairs. These include unforeseen car failures that are unrelated to everyday wear and tear, such as engine or transmission failures. An extended warranty covers both parts replacement and labor costs. However, the extent of the coverage depends on the plan you get.

Rent vehicle coverage

While your vehicle is in the garage getting fixed, you will still need to get to work, go for a holiday, or move around in everyday errands. An extended warranty usually offers rental vehicle coverage to reduce the inconvenience of a car breakdown in your daily life.

Roadside assistance

Another crucial benefit of a used car warranty is roadside assistance. If your car breaks down, you can use the coverage to tow it to the garage. An extended warranty also covers minor issues such as fuel delivery if you run out of gas, flat tire changes, battery jump-starts, lockout assistance, and more.

How much does a used car warranty cost?

Cost is one of the factors to consider when deciding whether you should buy a warranty for your used car. The most basic warranty costs around $350, but you might pay up to $700 for comprehensive policies and those covering high-end vehicles.

However, extended car warranty prices vary based on many factors. These include:

• Car model year: Older cars usually cost more to protect than new vehicles
• Car make and model: Sport and luxury cars usually need expensive repairs and maintenance, which increases the cost of warranty coverage.
• Vehicle mileage: Warranties for high-mileage cars tend to be more expensive than for models with low mileage.
• Coverage level: Your chosen level of coverage will also affect the amount you pay. For instance, powertrain coverage is likely to be cheaper than an exclusionary plan.
• Deductible: The higher your deductible, the lower the cost of an extended warranty and vice versa.

Like any major purchase, it's important to get quotes from multiple warranty providers before you decide. Be sure to look for the coverage you are being offered and make like-for-like comparisons.

In most cases, you can bargain the price of a used car warranty, especially if it is provided as part of a new car purchase. Used car warranty products and services usually come with lots of markups that you can negotiate to get lower rates.

How long does a used car warranty last?

The length of an extended vehicle warranty will vary based on the provider and the type of coverage you choose. The minimum warranty period you should expect on a used car is three months, but some warranties can last up to a few years. The length of the warranty is usually outlined in the terms and conditions.

How do you pay for an extended car warranty?

Some extended warranties and service contracts can be paid in one lump sum. However, most require a down payment and monthly payments for the period the contract is in place.

While some dealers might encourage you to finance a used car warranty as part of your car purchase, it's rarely a good idea. Anything you add to your auto loan balance that doesn't directly increase the vehicle's market value puts you at a higher risk of being upside down on your car loan. An extended warranty might make you feel your car is more valuable, but lenders and insurance companies don't place higher values on cars with warranty coverage.

How to keep your used car warranty valid

Warranty terms and conditions usually require the vehicle to be serviced at given intervals (set out in the contract) and might not pay out if you ignore a warning light. Modifying your car, including fitting substandard or non-manufacturer-approved parts, could invalidate the warranty. Reckless driving, fueling the wrong fuel, or deliberate damage might also invalidate your policy.

Comply with the maintenance plan according to the manufacturer's recommendations and have a completed, stamped service book and respective invoices to keep your extended warranty valid. When making a claim, follow the stated warranty claim procedure, having gathered the correct paperwork and evidence.

Is getting a warranty on a used car worth it?

Modern cars are regarded as more reliable than their forerunners, but they can be more expensive to fix if some parts of them fail. Labor costs alone can be extremely expensive, with major dealers sometimes charging up to $250 per hour.

For most people, a car is typically the second biggest investment after a home. Therefore, ensuring that your vehicle is protected against mechanical and electrical failure with a warranty can be a feasible choice.

A used car warranty is well worth the money you pay if having peace of mind to handle unexpected expenses appeals to you. An extended warranty for a used vehicle will protect you against unpredictable repair costs.

However, extended warranties are a bit of a gamble. Therefore, ensure you carefully read the terms and conditions of any warranties you are considering to understand what is covered and what is not. It's also good to go through online reviews for the company you are thinking of purchasing a warranty from and factor in the cost of any add-on the policy might have.