Used Car Warranties: What You Should Know (2024) (2024)

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When it comes to used car warranties, certain things can be confusing. This is especially true in cases where a used car is still covered by a manufacturer or dealer warranty. The section below will provide information on deciding if buying a used car warranty is worth it.

How To Decide on Buying a Used Car Warranty

This section will explore some things worth knowing about extended car warranties.

1. Check the Buyers Guide for Warranty Details

Most warranty information about used cars can be in a “Buyers Guide.” Dealerships are required by the Federal Trade Commission (FTC) to display this information for all its cars — usually on the front window.

The Buyers Guide will say whether the vehicle comes with a warranty or if it’s being sold as-is. Purchasing a car in as-is condition means that if you run into any issues or the vehicle needs repairs, you’ll have to do so out of pocket.

On the other hand, if your vehicle comes with the original warranty or extended coverage, the Buyers Guide should have all the information you need. This includes the parts that are or are not covered in your contract.

Some states have restrictions or rules on what vehicles can be sold in as-is condition. Below are all of the states where lemon laws apply to used vehicles. Be aware that in some states the requirements are extremely limited for used vehicles so be sure to contact your attorney general’s office to find out what rules and regulations apply in your state.

*Missouri and Mississippi have other regulations outside of lemon laws that — in certain circ*mstances — protect drivers of used cars.

The following states’ lemon laws do not apply to used vehicles:

2. Look Into the Factory Warranty

When you purchase a used vehicle, there’s a chance that the initial factory warranty from the automaker still applies. You can likely find this information under the “systems covered/duration” section of the Buyers Guide.

To get full use of the initial manufacturer warranty, you’ll want to know what the plan covers and whether it’s transferable. Ask the dealership, where you purchased your used vehicle, for all warranty documents. Once you know what’s covered under the factory warranty and for how long, you can contact your vehicle’s manufacturer to ensure the information is accurate.

Most initial factory warranties last for three years or 36,000 miles, while some powertrain warranties last much longer. For example, Hyundai, Kia and Mitsubishi all feature 10-year/100,000-mile powertrain warranties.

3. Read Your Warranty Booklet

If your used vehicle comes with a warranty, coverage may be limited. Your warranty booklet can provide specifics on the used car warranty and explain who is responsible for repairs. Remember to review all fine print in your contract to find out which components may be excluded from coverage and ensure all your questions are answered.

You’ll also want to know who exactly is backing your used car warranty, since some dealerships sell contracts from third-party warranty companies. You can research policies and company reputations on consumer sites like the Better Business Bureau (BBB), Trustpilot and Google Reviews.

4. Explore Your Alternatives

If your vehicle does not have a used car warranty, there are alternatives to purchasing one. These include:

• Putting money aside for vehicle repairs: If you decide against a used car warranty, consider stowing some cash away for an emergency that may happen down the road. The good news is that, if there’s nothing to repair, you can save the money to purchase your next car.
• Lease a car: If you decide to lease a car, your vehicle will likely come with a warranty that covers repairs. This means you won’t have to worry about paying massive out-of-pocket expenses.

Most companies and manufacturers offer a variety of used car warranty plans that range from comprehensive to bumper-to-bumper coverage and down to basic powertrain plans. Before you opt for a used car warranty, it’s important to decide what level of coverage best fits your needs and budget.

Nearly every warranty excludes regular maintenance needs like tire rotations and oil changes as well as coverage for wear and tear components. You won’t receive protection for damages due to accidents or severe weather either, as that’s the responsibility of your car insurance provider.

Used Car Warranty Plan Types

Most used car warranty companies offer a few different types of extended warranty plans. These include:

• Used car bumper-to-bumper warranty: Covers almost all vehicle components save for a few exclusions
• Used car powertrain warranty: Covers the engine, transmission and drive axles, which are the most essential parts of your vehicle and the priciest to repair
• Used car drivetrain warranty: Covers the car’s transmission and drive axles but excludes its engine
• Anti-perforation warranty: Takes care of repairs to most body panels with holes, though it excludes surface corrosion
• Corrosion coverage: Covers repair costs related to rust and other corrosive damage

Cost is a significant factor in considering whether you should buy an extended warranty on a used car. Some companies offer lower monthly payments than others, and some offer lower total costs than others. Are you looking to keep a tight monthly budget or get the best value overall?

How Much Does a Used Car Warranty Cost?

To give you a better idea of how much a used car warranty costs, we got quotes from five of the top warranty companies. Each quote is for a 2016 Toyota Tacoma with 100,000 miles on it and a deductible of $100 to $250. According to Kelley Blue Book, The Toyota Tacoma is rated the Best Midsize Truck of 2024, occasionally coming in second for the past eight years. Coverage levels range from mid-tier powertrain coverage to bumper-to-bumper warranties.

Remember, the company that’s best for our 2016 Toyota Tacoma may not be an indication of the company that is best for your vehicle. We always recommend gathering your own quotes from at least three different providers.

*Costs reflect quotes received as of May 2024

If your used car is covered under warranty and breaks down, you’ll want to take it to a repair shop for diagnosis. In most cases, your plan or contract administrator will pay the repair shop directly, minus your deductible. However, only the components and parts that are covered under warranty will be paid for.

Do Used Cars Come With a Warranty?

At the dealership, the Buyers Guide will let you know whether or not a used vehicle has a warranty. If a used car currently has some of the factory warranty left, you don’t need to buy a warranty right away.

Some dealers offer their own free warranties that are usually short and last a few months or less. This is really just a small perk that shows the dealer will take responsibility for any problems that come up soon after your purchase.

Lemon Law for Used Cars

Many states have strict contingencies when it comes to lemon laws on used cars. For example, in Arizona, your used car is only covered if a major car part breaks before 15 days or 500 miles after purchase — whichever comes first. Some states have looser rules, like Massachusetts, where you can get completely refunded for your used car if it’s under 125,000 miles and there’s a significant defect that threatens your driving ability or your safety.

California, Connecticut, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico and New York have robust lemon laws for used cars. These laws essentially require used cars to come with a warranty depending on the condition of the car. The dealership must repair any problems the vehicle presents for a specified period of time. If the dealer keeps trying to fix recurring problems and nothing improves, the dealer is required to give you a new vehicle or refund you.

Is There a 30-Day Warranty on Used Cars?

Whether or not a used car will have a 30-day warranty depends on the state where you live and where you purchased your car. In the U.S., there are no protections at the federal level requiring a 30-day warranty on a used car.

There are various types of used car warranties that could be listed on the vehicle when you purchase it. These include “as-is,” “warranty of merchantability” (where the vehicle is running like it is supposed to), “warranty of fitness” (meaning it is safe to sell) and the factory warranty still being applied on the vehicle.

In addition, some states have a grace period where you can change your mind and return the vehicle, but this is not required under federal law. We recommend checking with your dealership for their particular policy on returns and service after the purchase.

Do Warranties Transfer on Used Cars?

In most cases, the vehicle protection provided by a warranty on used vehicles can be transferred. You will need to contact the dealership or warranty company that you received your warranty contract from and let them know that you sold your car or that you transferred the warranty within the first 30 days of owning the vehicle.

In addition, most used car warranty companies will allow you to cancel your warranty coverage within the first 30 days. If you paid the full amount for your plan up front, you should receive the entire amount back and if you only placed a down payment you should receive it back.

A used car warranty covers the cost of certain vehicle repairs and replacements after a mechanical breakdown. As with warranties for newer vehicles, there are many different types of coverage plans to choose from. Some used cars come with a factory warranty, but models that are sold as-is may benefit from an extended coverage plan.

Used Car Warranty Companies

When looking for the market’s best used car warranty companies, it’s smart to compare quotes and warranty options from a few coverage providers. We’ve thoroughly researched the industry’s top extended auto warranty companies, and we rate Endurance and Carchex as two of the leading options.

Endurance: Best Comprehensive Coverage

Endurance offers six levels of coverage that last an unlimited number of miles. Each plan comes with added benefits like roadside assistance, towing services and rental car coverage.

When you purchase an Endurance vehicle service contract, you’ll receive one free year of Endurance Elite Benefits. This package is designed to provide you with peace of mind by offering perks like key fob replacement and total loss replacement.

Endurance is also a direct provider of warranty coverage, which means there’s no intermediary to contact when you need to file a claim. That brings an extra level of convenience that isn’t common in the auto warranty industry.

Read more: Endurance Warranty Review

Carchex: Best Industry Reputation

Carchex offers flexibility to car owners, with five levels of protection for vehicles up to 20 years old with a maximum of 250,000 miles on their odometers. The company’s Titanium plan is similar to a factory warranty while its Powertrain Plus plan protects critical parts like your car’s transmission and engine along with the air conditioning and electrical systems.

Read more: Carchex Review

Compare: Carchex vs. Endurance