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 Used car warranties can be quite different than new car warranties. If you're thinking about buying a used car, then this article should be of interest to you. That's because not every used car comes with the same kind of warranty - even if you're buying it at a car dealership.
In this article we're going to first talk about buying used cars and what you can expect when buying a car from a dealership or an individual. Then we'll get into the details of car warranties including a discussion on manufacturer's warranties and those of particular interest to people buying used cars such as implied warranties and extended warranties.
Buying a Used Car
In our previous article on Buying Used Cars, we talked abut how to go about researching your used car purchase. For example, where you can find some information on quality ratings; or how you can find car safety ratings and how to figure out the value of a used car. But once you've narrowed your decision to several makes and models of cars that you would consider purchasing, you also need to figure out where you should shop for that car.
Used Car Values
In our used car buying article we also talked about the Kelley Blue Book values and how they changed depending on where the car was bought or sold. This is because there is an assumed safety factor when you buy from a car dealership. In other words, dealerships should be able to demand a slightly higher price, or premium, from a buyer because there is an assumed level of recourse with a dealership.
If you purchase a used car from an individual, then you're assuming virtually all of the risk if the car does not perform as expected. It is much more difficult to try to get any kind of warranties or guarantees from an individual, regardless what they promised you when they sold you the car.
But if you buy a used car from a reputable dealership and you have a subsequent problem with the car, then you'd hope the dealership would cover the cost of the repair under some kind of warranty. At least that is the hope.
Used Cars Return Policies
The Federal Trade Commission agrees that most customers think they are getting a warranty when they buy a used car from a dealership. And just so that everyone is on the same page, there are certain requirements, or consumer protections, that the FTC has put forth concerning the sales of used cars and the warranties they need to carry.
There is also misconception that dealers are required to give used car buyers the right to cancel the purchase and return the car. There is no law that requires a dealer to take a car back once it is sold. Reputable dealerships, the ones that will stand behind the cars that they sell, often grant buyers the right to return a car within a few days and for specific reasons. Before buying a used car from a dealership ask them about their return policy and make sure you get the policy in writing.
Used Car Buying Guides
Any dealership that sells more than six used cars annually is required by law to post their Buyers Guide in every car offered for sale. The buyers guide is required to provide guidance on the following items:
- If the car is being sold "as is" or the car is covered by a warranty.
- The amount the dealership will pay for repairs covered by warranties.
- The guide will tell the buyer that spoken promises are difficult to enforce and that all negotiated items should be in writing.
- The guide will remind the buyer that they have the right to have the automobile inspected by an independent mechanic before the vehicle is purchased.
- The buyer of the car is entitled to, and should, take the buyers guide as a reference document after the car is purchased.
- Warn the buyer about major mechanical failures that can happen when purchasing a used car.
If you buy a used car and negotiate different terms than those posted in the car's original buying guide, then make sure you get a copy of the buying guide that reflects the changes that were made during negotiations.
Used Car Warranty
We're now going to discuss the types of used car warranties you might encounter in the marketplace - including some special types of warranties such as "as is," implied and extended warranties. The important point to remember here is that even if a used car does not carry a warranty - you might still be protected.
"As Is" Used Car Warranties
The first used car warranty we're going to discuss is an "as is" warranty - which is essentially no warranty on the car at all. If a dealer is offering a used car with this type of arrangement, then the check box on the buyers guide will indicate this understanding. If you negotiate a different arrangement or a promise is made beyond "as is," then make sure you get it in writing.
But even if you buy a car "as is" from a dealer, you've got some protections under the law - including what are called implied warranties.
Implied Warranties
All dealerships that are selling used cars are expected to sell cars that have met reasonable quality standards. This is sometimes referred to as an implied warranty. However, in certain states, the "as is" language can be used to eliminate most implied warranties. Some states, including Kansas, Maine, Maryland, Massachusetts, Mississippi, Vermont, West Virginia, and the District of Columbia, do not even permit "as is" sales.
Warranties of Merchantability
The most common form of an implied warranty is that of merchantability. Essentially, this means that if you bought a car to drive, then the car should be able to provide this function. In this case, if you bought a used car, then you should be able to drive it home and to work the next day.
The difficult part with implied warranties is that the buyer might have to prove that the defect existed in the automobile before they purchased it. Certainly if the car experiences a serious mechanical failure at a later date, an implied warranty will not apply. Basically, this kind of warranty states - you are buying a used car and this car is in good running condition today.
Manufacturer's Warranties
If the car is still covered under the original manufacturer's warranty, then this should be indicated on the buyers guide along with the expected date of expiration. If you are buying a used car with a manufacture's warranty, then make sure you get a copy of the warranty documents and understand what is covered.
Extended Warranties
If the dealership offers a service contract on the vehicle, then you are really purchasing an extended warranty. The service contract, or extended warranty, should detail exactly what is covered and for how long the coverage will be in effect. Once again, the buyers guide will indicate if a service contract is being offered on the car and the terms and conditions of the contract.
Extended warranties are frequently found on used luxury cars - which are often sold as certified pre-owned vehicles. These certified pre-owned programs gained in popularity as "gently-used" leased cars became available as used cars. Since these vehicles are returned to the dealership and sold as pre-owned, the automobile manufacturers will often extend the car's warranty past the original expiration date. This is done to build confidence in buyers.
Some of the better pre-owned warranties include those of Acura, Honda, Nissan, Dodge and Jeep. These manufacturers extend the original warranties for up to 7 years and 100,000 miles. Less generous are the extended warranties from Buick, Chevrolet, GMC, Land Rover, Mazda, Oldsmobile, Pontiac, and Saturn.
In the case of the cars made by General Motors, the extended warranty is for 3 months or 3,000 miles while the others in this last group are for 12 month or 12,000 miles. All of the car manufacturers mentioned above will provide roadside assistance on their certified pre-owned vehicles while the extended warranty is in-effect.
About the Author - Used Car Warranties
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