A Guide to Understanding the Warranty on a Used Car

Posted Monday, Jul 15, 2024

Purchasing a used car can be a fantastic way to save money while still getting a reliable vehicle. However, one important aspect that often gets overlooked in the excitement of buying a car is the warranty.

When buying a used automobile from a company like Hyatt Cars of Lexington, it’s important to comprehend the several warranty options and their coverage. Over time, a used car warranty can save you money by offering insurance against unforeseen repairs and peace of mind.

In 2020, the cost of new cars rose by 21.1% in the United States, as per the most consumer price index (CPI) data released by the Bureau of Labor Statistics. In contrast, used automobile prices increased 31% during that time. Though the prices have fallen steadily since 2021, they are still four times higher than what they used to be in 2019.

Let’s take a look at the types of used car warranties available and the coverage they offer:

Choosing Your Used Car Warranty

Manufacturer’s Warranty

A manufacturer's warranty covers specific repairs and defects for a predetermined amount of time or mileage. It is normally included in a deal when an automobile is originally sold. Although it might change, this guarantee typically consists of a powertrain warranty as well as a bumper-to-bumper warranty. Let’s take a look at them:

· Bumper-to-Bumper Warranty

This type of warranty covers almost everything in the car except for wear-and-tear items like brakes, tires, and wiper blades. It’s the most comprehensive type of warranty and usually lasts around 3 years or 36,000 miles.

· Powertrain Warranty

This covers the engine, transmission, and other key parts that make the car move. Powertrain warranties generally last longer than bumper-to-bumper warranties, often around 5 years or 60,000 miles.

Certified Pre-Owned (CPO) Warranty

Many manufacturers offer a CPO warranty, which is a popular choice for used car buyers looking for extra peace of mind. A CPO car typically comes with a thorough inspection, which is done by a certified dealer.

· Extended Coverage

Vehicle service contracts, sometimes referred to as extended warranties, are provided by independent companies or dealerships. They go beyond the original warranty in terms of coverage. These warranties offer different coverage levels for various components and may be customized to meet your demands and budget. When buying an extended warranty, make sure to read the print carefully and understand what it does and doesn’t cover.

Dealer Warranty

Some dealerships offer their own warranties on used cars, which can vary widely in terms of coverage and duration. These warranties are often referred to as “limited warranties.”

· Limited Warranty

A limited warranty typically covers a used car for 30 days or 1,000 miles. It is provided by certain used car dealerships. Compared to extended and CPO warranties, this warranty usually covers particular parts, including the engine and transmission, for a limited time. However, a limited warranty does not offer complete coverage and contains more exclusions.

Third-Party Warranty

In addition to manufacturer and dealer warranties, third-party companies offer extended warranties for used cars. These warranties can provide a range of coverage options and are often customizable.

Third-party warranties can be tailored to fit your needs, covering everything from basic powertrain components to comprehensive bumper-to-bumper coverage.

One of the best things about third-party warranties is that they are accepted at repair shops nationwide, giving you flexibility no matter where you are.

Corrosion Warranty

Rust protection, also known as corrosion coverage, is a warranty that guards against rust damage to your car. This coverage can be obtained through third-party warranties, aftermarket rustproofing procedures, and manufacturer warranties.

Depending on the type and model, many new cars have a corrosion warranty provided by the manufacturer. This warranty lasts anywhere from five to twelve years and covers the cost of replacing or repairing rust-damaged vehicle parts.

Coverage Details

It's important that you understand all of the coverage options provided by a used car warranty. Examine the warranty paperwork thoroughly and enquire about any ambiguous terms or restrictions. Here are a few points to keep in mind:

· Covered Parts: Ensure you know which parts are covered and which are not. Pay particular attention to high-cost components like the engine, transmission, and electronic systems.

· Exclusions: Understand what is excluded from the warranty. Common exclusions include routine maintenance items (oil changes, brake pads), cosmetic issues (paint, upholstery), and pre-existing conditions.

· Repair Costs: Check if there are any deductibles or co-pays required for repairs. Some warranties cover the full cost of repairs, while others may require you to pay a portion.

Pros and Cons of Used Car Warranties

Pros

· Peace of Mind: Warranties ease the financial strain by guaranteeing that unforeseen repair costs will be met.

· Higher Resale Value: Having a transferable warranty can increase the appeal of your vehicle to prospective purchasers.

· Cost Savings: Especially for major parts like the engine or gearbox, warranties might help you avoid paying for pricey repairs.

Cons

· Limited Coverage: Certain warranties may have a large number of exclusions, and not all parts are covered.

· Costs: Service contracts and extended warranties can be pricey, and there might be co-pays or deductibles.

· Complexity: It can be difficult to comprehend a warranty's terms and conditions, and filing a claim can occasionally be a difficult procedure.

Buying a used car is a big decision that needs to be carefully thought out, especially when it comes to knowing what warranty comes with your car. It is imperative to thoroughly examine the terms, coverage specifics, and potential expenses associated with each warranty type, as they vary. To improve your ownership experience even more, make sure you understand the limitations of the warranty, negotiate conditions, and check the vehicle’s maintenance history. To search for a high-quality used car, visit the Hyatt Cars of Lexington website. They have a huge inventory of used cars in various models. You can even apply for car finance if you cannot pay for the used car outright. For more information, call (803) 356-0760.