Make sure you understand what a used car warranty covers before you buy one.
When you buy a used car, there’s always a chance it will experience mechanical failures soon after you purchase it. Many people view a used car warranty as protection against the possibility of unreported defects or other issues, but is the added peace of mind worth the cost of coverage?
In this article, we’ll go over the ins and outs of a used car warranty – also called an extended warranty, vehicle service contract, or vehicle protection plan – to help you decide whether the added protection is right for you. Then, we’ll introduce you to the best extended car warranty companies that offer used car coverage.
To see how much a used car warranty may cost for your vehicle, get free, personalized quotes from our top recommended providers.
In this article:
- What Is A Used Car Warranty?
- Do You Need A Used Car Warranty?
- How Much Does A Used Car Warranty Cost?
- Best Used Car Warranty Providers
What Is A Used Car Warranty?
A used car warranty is a contract that offers warranty protection for older vehicles. Unlike liability insurance, which covers repairs after an accident, a car warranty covers the cost of needed repairs after a vehicle breaks down due to normal use.
All new cars and most certified pre-owned vehicles come with a factory warranty that promises to pay for mechanical breakdowns for the first few years of your vehicle’s life, but if you purchase a used car from a private seller, it may not have warranty coverage. This is when you should consider purchasing a used car warranty.
Even the most well-maintained vehicles won’t run forever. Mechanical breakdowns will generally occur over the course of every vehicle’s lifetime. Failures can require anything from a cheap, small fix like replacing a busted hose to a major, thousand-dollar service like replacing a faulty transmission. A used car warranty helps to pay for unexpected repairs should an unforeseen breakdown occur.
If a component stops working properly, used car warranty holders can bring their vehicles to an authorized repair facility for a diagnosis. If the repair is covered under warranty, the warranty administrator will pay for the cost of parts and labor (minus a deductible) to fix or replace the broken component.
Vehicle service contracts do not cover routine maintenance services like oil changes, but they sometimes come with extra perks like emergency roadside assistance and rental car reimbursement while your vehicle is at the repair shop.
Do Used Cars Still Have A Factory Warranty?
When you buy a used car, there is a chance that it is still covered by its factory warranty, as many of these warranties are transferable to new owners.
Virtually every automobile manufacturer that sells cars in the United States includes a factory warranty with the purchase of a new vehicle. This is provided at no additional cost and promises to replace any car parts that fail because of defects in materials or workmanship.
The typical new vehicle limited warranty lasts for 3 years or 36,000 miles, whichever comes first. A used car newer than three years old is likely still covered by its factory warranty. You can find out if your car is still covered by contacting a dealership. Give the dealership your vehicle identification number (VIN) and mileage, and a representative should be able to tell you the status of your car’s factory warranty.
Certified Pre-Owned (CPO) Warranty
Most manufacturers sell certified pre-owned (CPO) vehicles as well as new cars. A CPO vehicle is inspected by the dealership and guaranteed to be in excellent condition at the time of purchase. As part of this guarantee, CPO vehicles include a warranty similar to a new vehicle warranty. If you buy a CPO car, it will likely have some warranty protection, though it probably won’t last as long as a new vehicle warranty.
Third-Party Used Car Warranty
If you purchase a used car that is more than three years old, there’s a good chance it is no longer under warranty. In this case, you may consider purchasing a used car warranty from a third-party provider.
Do You Need A Used Car Warranty?
As with any financial product, it makes sense to ask yourself: are extended warranties on used cars worth it? The answer depends on your car and your budget. Unlike car insurance, a used car warranty is not required by state law, though some vehicle lessors may require you to purchase a warranty to be eligible for financing.
Many drivers appreciate the peace of mind offered by an extended auto warranty, but there’s a chance that you won’t use the coverage you purchase. One way to estimate whether a used car warranty would be a worthwhile investment for you is to look up your vehicle’s reliability on a site like RepairPal. RepairPal uses driver-reported data to estimate average annual repair costs for 32 car brands. Calculate how much you may pay in repairs over your warranty period and compare this with quotes to see if extended coverage would help you save money in the long run.
Additionally, a used car warranty can help you finance repair costs over time. Not all vehicles will experience a severe breakdown, but it’s always a possibility. Major repairs often cost over $1,000, and if you wouldn’t be able to unexpectedly pay a large sum out of pocket, you may be left without reliable transportation. Used car warranties can be financed in monthly installments, taking away the financial stress of a lump-sum payment.
A used car warranty may also be worth purchasing if you have doubts about the quality of the car you’re buying. If you are concerned about the dependability of a used car, purchasing a warranty can protect your budget if costly mechanical issues arise.
How Much Does A Used Car Warranty Cost?
The cost of a used car warranty depends on the particular vehicle you are trying to cover. Prices vary depending on your vehicle’s age, mileage, make, and model. Your coverage level and deductible will also impact the final price.
Listed below are real quotes we’ve gotten from several of our top recommended providers. While your own quotes will vary, this chart should provide an idea of extended car warranty costs. Prices quoted below are for a 2013 Toyota Camry with 92,000 miles on it. The coverage plan offered is a powertrain warranty, meaning that only powertrain components such as the engine and transmission are covered.
|Endurance||CARCHEX||CarShield||Protect My Car|
|Contract Length||6 years/75,000 miles||5 years/60,000 miles||Unlimited||4 years/75,000 miles|
|Monthly Cost||$110.85 per month
for 30 months
|$190.00 per month
for 18 months
|$129.00 monthly||$65.82 per month
for 48 months
|Down Payment||$389.05||First month’s payment||First month’s payment||$90.00|
|Total Cost||$3,520.50||$3,420.00||Determined by how long you keep your coverage||$3,249.36|
Best Used Car Warranty Providers
With so many used car warranty providers out there, it can be difficult to determine where to start getting quotes. That’s why we’ve done the homework for you. Our review team evaluated every major extended warranty company on the market, looking at customer reviews, industry reputation, costs, and coverage details of each provider.
Based on this research, we’ve found the following providers to be the best extended warranty companies for used cars.
|Used Car Warranty||Endurance||CARCHEX||CarShield||Protect My Car|
|Best For||High-quality coverage and the industry’s best benefits||Outstanding customer service||Long-term coverage and month-to-month contracts||Added maintenance coverage|
|Motor1 Rating||5.0 / 5.0||4.5 / 5.0||4.5 / 5.0||4.5 / 5.0|
|Years in Business||14||21||15||15|
|Customer Service Rating||4.5 / 5.0||4.5 / 5.0||4.0 / 5.0||4.0 / 5.0|
|Learn More||Endurance review||CARCHEX review||CarShield review||Protect My Car review|
|Quotes||Get Quote||Get Quote||Get Quote||Get Quote|