Savvy shoppers should thoroughly read warranties and extended service contracts before signing the sales contract on a car or truck. You can negotiate the price of your extended warranty if the salesperson really wants to sell you the vehicle. Though new car warranties vary by automobile manufacturer and automotive dealership, Federal Law 15 U.S. Code § 2302 lists parts covered by the manufacturer’s warranty stipulating the manufacturer’s intent to repair or replace defective parts for a specified length of time. You may have financial obligations as the consumer for parts and repairs not covered by the warranty; the warranty, designed to protect the consumer, explains how to notify the dealership of malfunctioning parts or craftsmanship.

Transferring Your Car Warranty

Your used car warranty represents a dealership’s good faith in a manufacturer. While United States federal law dictates that the warranty is associated with the car and transfers to successive owners until the warranty’s expiration date, your car’s warranty is your individual contract negotiated with the dealer that sold you the car. Volkswagen offers a six-year 72,000-mile contract that transfers directly to the new owner when the original owner trades the car for a newer model. While Hyundai’s 10-year 100,000-mile warranty sounds great, it’s only on the powertrain; only Hyundai’s five-year or 60,000-mile warranty is transferred to the vehicle’s second owner.

Gap Protection Plans

Gap coverage pays the deficit balance that occurs if your vehicle is stolen, repossessed, or totaled. If the insurance company pays less than the balance of the loan for your totaled or stolen car, gap insurance pays the difference between the Kelley Blue Book value and your loan balance. If you expect no major repairs because yours is a new vehicle or a low mileage used car or truck, you can pay for an extended warranty, later, as the vehicle gets older. It’s your duty to keep your new car or truck well maintained.

Car brands with warranties that transfer to new ownersHyundai, Kia, and Volvo

Hyundai and Kia offer five-year or 60,000-mile new car warranties with a 10-year or 100,000-mile warranty on your powertrain. Volvo offers a five-year or 60,000-mile new car warranty. Hyundai, Kia, and Volvo all offer five years of free roadside assistance to protect their investment. Volvo also offers its customers free 10,000-, 20,000-, and 30,000-mile new vehicle serving. The consumer has a duty to read the warranty before signing the vehicle sales contract.

BMW, Mercedes-Benz, Dodge, and Chrysler

Seventy-one percent of BMW owners, 60% of Mercedes-Benz owners, 65% of Chrysler owners, and 63% of Dodge owners needed their extended warranties. Mercedes-Benz, BMW, Chrysler, and Dodge owners report satisfaction with used or new car warranties. Chrysler Dodge cars and pickups offer Mopar Vehicle Protection on 10-year-old vehicles with less than 125,000 miles on them. Mopar Vehicle Protection Plans offer different levels of service for its extended family of Dodge owners that you can purchase at any time, including Maximum Care, Added Care Plus, Added Care, Powertrain Care Plus, and Powertrain Care that covers 5,000, 850, 650, 400, and 300 Dodge components, respectively.

Honda Reliability

Honda designs its vehicles for longevity and offers incentives and tax credits of up to $7,500 on its hybrid, plug-in hybrids, electric, and hydrogen fuel-cell Honda Insights and Honda Accords. Honda offers an eight-year unlimited mileage transferable warranty on all of its high-voltage electric batteries.

Honda, Toyota, and Subaru

Honda, Toyota, and Subaru owners are unlikely to purchase extended warranties. Thirty-nine percent of registered Honda and Toyota owners needed their warranties, and only 36% of Subaru title holders needed their warranties. Subaru new or used car extended warranties include:

• New car limited: Three years or 36,000 miles
• Powertrain limited: Five years or 60,000 miles
• Parts: List includes brake pads, clutch linings, transmitter batteries for three years or 36,000 miles
• Rust: Five years, unlimited miles
• Roadside assistance: Three years or 36,000 miles

Car brands with warranties that transfer to new ownersChevrolet, GMC, Buick, and Cadillac

General Motors offers extended warranties for five years or 60,000 miles on Chevrolets, GMC cars, and GMC trucks. GM extends a six-year or 70,000-mile warranty on your Buick or Cadillac. New car warranties are typically for three or four years or 36,000 to 50,000 miles. GM’s extended warranties add $1,000 to $2,000 to your auto finance contract.

Cadillac, Buick, GMC, and Chevrolet Parts Warranties

Cadillac’s warranties transfer to their used car owners with the exception of their parts warranties that require the original purchaser to bring the vehicle into their dealership for a replacement part at no cost to the original owner. The labor and replaced part will then be covered for two years from the date of the replacement. Fluid replacement is excluded. Improperly installed parts, altered parts, improper fluids, and incidental and consequential losses are not covered under this parts warranty. Cadillac extended warranties cover your vehicle for six years or 70,000 miles.

Two-Year Warranty on Manufacturer’s Parts

General Motors will replace a limited list of parts under its lifetime parts warranty. GM, through GM dealers, will replace genuine GM/AC Delco parts with manufacturer defects. The company will guarantee its certified mechanic’s labor for 24 months. Parts covered include your car’s chassis, fuel pumps, ignition wires, radiators, shock absorbers, struts, wheel bearings, and wheel hubs. Powertrain warranties are for six years or 70,000 miles – no deductible – on parts, materials, and workmanship in your engine, transmission or drive system.

Ford Extended Service Plan

Ford Extended Service plans, financed by Ford Motor Credit, guarantee 24-hour roadside assistance, genuine Ford factory-certified technicians and mechanics, and original manufacturer equipment. Ford premium extended service plans increase the resale value of your vehicle. Ford automotive extended service contracts offer second owners new car warranties on Ford used cars. Ford service plans offer up to 10 days use of a free rental car while your vehicle is being repaired.

Car brands with warranties that transfer to new ownersFord Premium Maintenance

Ford premium maintenance extended warranty covers all repairs and servicing of your vehicle, even routine oil changes and tire rotations. Ford offers four levels of extended warranties: Premium, Base, Extra Care, and Powertrain. Ford premium maintenance contracts are automotive service contracts that add costs to your sales contract. Automotive service contracts protect Ford’s interest in their automobile or truck.

Dealership Warranties

Dealerships may offer you an extended warranty to close on the sale when you buy a used car. You may love the car you wish to buy, and you may want a warranty. Read the warranty thoroughly, however, as it may not cover all the parts you need it to. It’s important to read the list of what the dealership excludes from coverage. Dealership-extended warranties keep you returning to the dealership for even routine servicing of your vehicle.

Extended Warranties

You can purchase an extended warranty with the terms that you want. Extended warranties include free towing and roadside assistance. Warranties offer 200,000- or 250,000-mile protection and free use of a rental car while your car is being repaired. Warranties require you to get your car serviced or repaired by one of their affiliated dealers or allow you to choose any ASE-certified mechanic.

Federal Trade Commission

Title I of the Magnuson Moss Warranty Act empowers the Federal Trade Commission to regulate new car warranties, enforce implied warranties, and exact compensation for a manufacturer’s breach of a warranty contract. The types of used car warranties you can purchase include:

• Bumper-to-bumper: Warranty on parts and craftsmanship, which may exclude wear and tear
• Powertrain: Transmission, axles, and driveshaft
• Roadside assistance: Emergency repairs, flat tires
• Corrosion or rust: Rust or deterioration of metal chassis parts
• Emissions: Federally mandated control of emissions
• Design defects: Defective parts are replaced for eight years or for 80,000 miles
• Battery: Federal law requires battery coverage of hybrid cars for eight years

Costs of Repairs

The battery pack for a late-model Toyota Prius costs $1,600 plus the cost of the labor to install it. Your extended service plan and your warranty may offer duplicate coverage that you may be able to negotiate. Replacing the transmission assembly in your Honda Prius costs $5,668.55 with additional charges for the labor to install it. The extended warranty on your Prius may only cost $1,000 per year in the form of low monthly payments.

Better Than Insurance

Used car warranties can act as additional insurance on your vehicle, even guaranteeing your loan balance will be paid in case of accident, theft or sudden death or disability. Car manufacturer warranties offer premium plans that hold you harmless for even routine vehicle servicing and repairs. Savvy used car buyers should scrutinize warranties that are available for purchase at any time when their manufacturer’s warranty expires. You need an extended warranty if you believe the cost of maintenance on your vehicle will exceed the cost of the extended warranty or the extended service contract.

Purchasing a used car doesn’t mean you’ll lose out on a warranty. If you do thorough research, you’ll find you can get an almost new car with a used car warranty.