There are many benefits to buying a used car. Since they have a lower price tag, you may be able to purchase an amenity-rich used vehicle instead of a base-level new one. Also, some used cars have a warranty with time remaining, which makes them like new in many ways. Here’s what you should consider when buying a used car.
Get One With a Remaining Factory Warranty
It’s always a good idea to buy a used car that includes a factory warranty. When you purchase a new car, it will likely include one. Some used cars come with them, too. Warranties with used cars vary significantly. A used car may come with a factory warranty if the original one still has time remaining.
For instance, if the vehicle had a powertrain warranty of five years or 100,000 miles when it was first purchased and the original owner sold the car within three years of buying it after driving it for 40,000 miles, then time would be remaining on the warranty. That time would be transferred to the new owner.
Other times, different kinds of warranties are offered with used cars to give used car buyers advantages that are similar to buying new cars. While these warranties are not the same as the original manufacturer’s warranty and are operated by a third-party company, they will cover the things that might make you nervous about buying a used car. For instance, they may cover repair costs as well as general maintenance like oil changes and tire rotations. Some even provide roadside assistance.
What’s Covered Under a Manufacturer’s Warranty?
When you purchase a new vehicle, the car’s manufacturer will likely include a warranty. They do it to guarantee the quality of their products. A manufacturer’s warranty ensures that the company will correct issues with the car by repairing, replacing or refunding it. A warranty may provide extra coverage for parts such as the vehicle’s air conditioning system, the seat belts or the battery. If you’ve decided to lease a vehicle, the warranty may cover parts, too.
Most of the time, a powertrain limited warranty covers a vehicle for five years or 60,000 miles. This type of warranty will replace a vehicle’s engine, its transmission and its major driving components, and when this kind of warranty is still active for a used car, you’ll have the same benefits as you would with a new vehicle.
Before buying that used car, read through the auto manual thoroughly so that you’ll know what is and what isn’t covered. For instance, powertrain warranties don’t cover anything that doesn’t impact a vehicle’s power. This includes air conditioners, stereo systems, and sunroofs. They also don’t cover typical wear-and-tear parts that you can expect to replace periodically, such as the brake pads or the CV joints. While these parts are powertrain items, they wear down with use.
A powertrain warranty won’t cover things that happen to a car during a collision or for incidents like vandalism, a fire or flooding. These are things that your auto insurance should cover.
How Does a Drivetrain Warranty Work?
Drivetrain warranties provide coverage like powertrain warranties do, but they won’t cover things that are connected to the engine. Instead, drivetrain warranties cover elements that shift power from the vehicle’s engine to its wheels. Just like powertrain warranties, it’s a bad idea to take for granted that a particular part will be covered under the drivetrain warranty. Be sure to read through what’s covered and what isn’t with this type of warranty.
About Bumper-to-Bumper Warranties
If you can get a bumper-to-bumper warranty with your used vehicle, you’ll really have the benefits of a new car since these are only offered with new vehicles. This type of warranty is one of the best ones that you can get because it’s comprehensive, and it covers almost anything that could break down on your vehicle. Bumper-to-bumper warranties are usually only available for a short time while powertrain warranties last the longest.
Should You Get an Auto Service Contract?
Auto service contracts, which are also referred to as extended warranties, are something that you can purchase that will give you the kind of vehicle protection on your used car that you would enjoy with a new car purchase. You can buy one of these at any time, but you will pay more. While you are not required to add a service contract to your vehicle purchase, investing in one can give you added confidence in your car, SUV or truck.
You shouldn’t have to buy an extended warranty to qualify for financing, either. If your dealer advises you that this is the case, be sure to check with the lender. According to the Federal Trade Commission, or FTC, some consumers have been unable to cancel their extended warranties upon discovering that their financial backers didn’t require them to have one. Also, make sure that your loan doesn’t include a service contract when you agree to the terms. If you notice something in your financial contract that you didn’t agree to, then be sure to have the dealer remove it before signing your loan papers.
If you are considering a service contract to enjoy new car benefits with your used car purchase, then make sure that the extended warranty doesn’t include the same coverage that you may already have with a powertrain, drivetrain or bumper-to-bumper warranty. When you buy a new car, it’s likely to include a manufacturer’s warranty that will be valid for three years or 36,000 miles. A service contract won’t be in effect until the manufacturer’s warranty has expired. Before signing up for a contract, make sure that you know when it will be active.
Look into the length of your extended warranty. Ask if you can transfer the service contract to your vehicle’s next owner if you sell the car before the contract expires. This could give you a great negotiating tactic whether you’re selling your car to a private buyer or a dealership. If you’re purchasing a new car that the dealership has been using for its staff, then make sure that you know when the warranty coverage started because it could have been in effect when staff members started driving it.
Who Provides the Service Under an Extended Warranty?
Check on who is backing the extended warranty so that you know who you should be taking your vehicle to if it needs repairs. The backer of the warranty could be the manufacturer, the dealership or a third-party company. Many of these warranties are managed by administrative companies, and they approve claims. If there is a dispute, you’ll want to reach out to the administrative company.
If this company goes under while you have a warranty, then the dealer may still be required to repair your vehicle. The same is true if the dealer should go under. The administrator would be required to make sure that your vehicle is repaired according to the contract terms. You may be able to take legal action depending on your state’s laws if you have trouble receiving service under a warranty.
It’s a good idea to ask if an insurance company is backing your extended warranty. Some states require companies to do this. If an insurance company is underwriting your warranty, reach out to the insurance commission that’s set up in your state to make sure that the insurance company is not in financial trouble. You can also ask about complaints made by other consumers.
How Much Do Service Warranties Cost?
In most cases, the cost of an extended warranty is based on the type of vehicle that you’re buying. The make, model and condition of the vehicle will be considered as will the level of coverage that you’re getting and how long the contract is. Your initial cost is likely to vary from $1,000 to a few thousand dollars.
This type of warranty may come with a deductible. Read through the contract to see how the deductible is charged. For instance, some charge a deductible based on a visit or a repair piece.
How the deductible is charged makes a difference when it comes to how much value your warranty offers you. For instance, if the company charges you $100 per visit, then you’ll pay just $100, but if the business charges you based on each repair piece and you need two parts, then you’ll pay $200.
A Good Warranty Can Make Your Used Car Like New
When your used car comes with a warranty or even if you buy one with the car, you’ll enjoy greater confidence in the durability and longevity of your vehicle. With warranty options that range from all-inclusive to basic wear-and-tear, you’ll have the peace of mind of knowing that you have backup should anything happen with your used car, SUV or truck.