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.
True story: I purchased a used Honda Accord several years ago (usually a VERY reliable car) and decided to buy a warranty for it. Boy, am I glad I did. That car was nothing but trouble. The dealer wasn’t at fault because they could not have known the problem unless they took the car on a really long test drive in heavy traffic on a hot day.
Pretty unlikely, huh? The transmission would stop working when it got really hot – on hot days in heavy traffic. Thankfully, the warranty company paid for the transmission to be replaced. Huge expense avoided.
What is Covered by a Used Car Warranty?
A used car warranty typically covers major components such as:
- Engine
- Transmission
- Drive axles
- Transfer case (on AWD and 4WD vehicles)
More comprehensive warranties can also include:
- Electrical systems
- Air conditioning
- Fuel system
- Suspension
What is NOT Covered by a Used Car Warranty?
Most warranties will not cover the following:
- Routine maintenance (oil changes, brake pads, filters, etc.)
- Damage from accidents or weather
- Cosmetic issues (paint, upholstery)
- Wear-and-tear items (wiper blades, tires, etc.)
Do You Need a Used Car Warranty?
It depends on your risk tolerance and how much you rely on your car. A used car warranty can give peace of mind and help you avoid big, surprise repair bills. If you're buying a car that’s known to be reliable and has a clean history, you might not need it. But if you're buying a vehicle with high miles or limited service records, it might be worth the investment.
Also, if your budget doesn’t leave room for a $1,500 transmission repair, a warranty might be the safer bet.
Types of Used Car Warranties
- Powertrain Warranty: Covers the engine, transmission, and drivetrain. Usually the cheapest and most limited coverage.
- Bumper-to-Bumper Warranty: Offers the most comprehensive protection, covering nearly every mechanical and electrical system.
- Named Component Warranty: Only covers specific parts listed in the warranty contract.
- Wrap Warranty: Extends coverage beyond the original powertrain warranty, often used in certified pre-owned programs.
Where to Get a Used Car Warranty
- From the Dealer: Many dealerships (like us!) offer service contracts with used vehicles. Ask about cost, deductible, and what’s covered.
- From the Manufacturer: If you buy a Certified Pre-Owned (CPO) car, you’ll often get a factory-backed extended warranty included.
- Third-Party Companies: Companies like Endurance, CarShield, and Protect My Car offer extended warranties that can be added after purchase.
Used Car Warranty Red Flags to Watch Out For
- High deductibles
- Limited repair shop choices
- A long list of exclusions
- Bad online reviews or lack of transparency
Final Thoughts
Used car warranties aren’t for everyone, but they can be a smart way to protect your wallet from major repairs. Read the fine print, ask questions, and make sure you know exactly what’s covered before signing anything.
If you're buying from a reputable dealership, they’ll usually walk you through your options and help you choose the right warranty for your situation.
Have questions about used car warranties or need help finding a car? Reach out to us—we’re here to help!