What's Covered Under a Used Car Warranty

by Jaime Grimes
Source: AutoTrader.com

August 18, 2008

While shopping for your next used car, you might notice a Buyer's Guide posted on the windows of all used vehicles on the lot.

The Federal Trade Commission requires dealers to post a Buyer's Guide on each used car, and that document must inform you, among other things, whether the vehicle is being sold "as is" or with a warranty.

But what's covered by the warranty of a used car? Well, it depends on the car and what the dealership offers under its warranties.

A full warranty, whether the car is new or used, includes the following terms and conditions:

Anyone who owns the vehicle during the warranty period is entitled to warranty service.
Warranty service will be provided for free, including the removal and reinstallation of major components and systems.
You have the choice of replacement or a full refund if, after a reasonable number of tries, the dealer can't repair the vehicle or a covered system.
You only have to tell the dealer that warranty service is needed in order to get it, unless the dealer can prove that it's reasonable to require you to do more.
Consumers aren't required to perform any duty as a precondition for receiving service, except notice that service is needed.
Coverage generally excludes wipers, fluids, belts, tires, battery, accessories, windows, emissions system and oil filter.
Implied warranties have no time limits.

If any of the above statements don't apply, the car has a limited warranty, which means it has certain conditions and limitations on the parts covered, types of damage covered and/or time period for which the agreement is enforceable.

Most used car warranties are limited, and their coverage varies. Some parts or systems may be covered by a full warranty, while others are covered by a limited warranty. No matter what, the following information must be included in the warranty section of the Buyer's Guide:

What percentage of the repair cost the dealer will pay;
The specific parts and systems — such as the frame, body, or brake system — that are covered by the warranty. The back of the Buyer's Guide lists the major
systems where problems may occur;
The warranty term for each covered system, measured in periods of time or mileage; and
Whether there's a deductible and, if so, how much.

Most dealers offer the option to purchase extended or additional warranties, but be cautious of these offers. If you do purchase an extended warranty, make sure the comprehensive warranty you buy includes these features:

1. Covers both breakdown and wear and tear

2. Is effective the day you purchase it

3. Comes from a well-funded and insured car warranty administrator

4. Offers a $0 deductible or one deductible per visit

It's a good idea to review the dealer's warranty before you buy to figure out what is covered. If it's a third-party warranty, or it's not offered by the car manufacturer or the dealership, check with the Better Business Bureau to make sure the company offering the warranty is legitimate. Also, make sure the warranty company is insured.

If you are shopping for a used car, you'll want to read our used car buying guide.