Home Car Shopping Is the Factory Warranty Transferable When Buying or Selling a Used Car?

Is the Factory Warranty Transferable When Buying or Selling a Used Car?

Quick Facts About Transferring a Car Factory Warranty

When buying or selling a car, several warranty questions come to mind, but none more often than, is a factory warranty transferable? Regardless of which side of the transaction you are on, it’s a legitimate question. As a buyer, you might wonder if that late-model used car you are shopping for has an active warranty that will transfer to you. On the other hand, as a seller, you might want to use that active warranty to help sell your car if it is transferable.

But does the factory new car warranty that comes with every new vehicle transfer to the next owner? There’s good news. Generally, the answer is yes. Read on to learn more.

What Is a Factory New Car Warranty?

A factory new car warranty is any contractual agreement between the carmaker and the car owner to financially protect the owner against a car’s defects within certain limitations. Those limitations can include the length of protection, specific components, etc.

New car warranties take more than one form. Some carmakers provide as many as four factory warranties. The two we hear about most are the “limited bumper-to-bumper” warranty and the “powertrain” warranty. Some carmakers also issue a corrosion warranty and a roadside assistance warranty.

Issued by the car manufacturer, the limited and powertrain warranties cover the cost of repairing a specified list of components and systems. However, the repairs must take place in a factory-approved service center. The warranty coverage is for a fixed period stated as a number of years or miles, whichever comes first. For example, Hyundai’s limited warranty is 5 years/60,000 miles. Its powertrain warranty is 10 years/100,000 miles.

RELATEDPowertrain Warranty vs. Bumper to Bumper: What Is the Difference?

How to Use a Vehicle Factory Warranty

Using a factory warranty to pay for a covered repair requires taking the vehicle to the service department of a franchised dealer of the model’s manufacturer. In other words, if it’s a Ford, take it to a Ford dealer; if it’s a Subaru, take it to a Subaru dealer, and so forth.

If the component is covered, and the car is within the age and mileage terms of the warranty, the franchised dealer’s service department will repair or replace the failed components. Depending on the exact warranty coverage, the work is completed free of charge to the car owner.

However, there are a few exceptions to warranty coverage. Not properly maintaining the car or adding aftermarket components will sometimes nullify portions of the factory warranty.

Do Warranties Transfer to New Owners?

Yes, factory new car warranties typically transfer to the new owner in nearly every case because they are tied to the vehicle identification number (VIN). Therefore, regardless of ownership, the new car warranty will be valid for the entire warranty term. In other words, the warranty is connected to that specific vehicle and not the owner. What if you buy a new car and later sell it to someone else? That warranty usually remains valid for the new owner until the end of the original warranty period.

Consequently, buying a used car with the remaining factory warranty means it’s covered for whatever portion of the warranty remains. For example, if you buy a used 2021 Hyundai with 20,000 miles on the odometer, the limited warranty will cover another three years or 40,000 miles, whichever comes first.

However, there’s one important catch: The warranty age limit begins on the in-service date and not the model year. If you buy a 2023 model-year car with a 3-year/36,000-mile warranty in November of 2022, the clock begins ticking the minute you take possession. No matter the mileage, that warranty expires in November of 2025. In other words, it expires three years from the date you bought the new car. Likewise, if the car dealership puts a new vehicle into service as a demo or a loaner, the warranty clock begins on the day it happens.

If having the coverage of the remaining factory warranty is essential to you, we suggest you call a dealership and provide the service department with the VIN. That way, you can determine exactly how much warranty remains.

NOTE: This warranty advice applies to factory new car warranties. Extended warranties purchased in addition to the factory warranty coverage are altogether different. Consequently, they often don’t follow the norms of a factory-issued new car warranty. Read on to learn more about extended warranties.

Warranty Transfer Exceptions

For years, we’ve praised Hyundai and Kia for offering the best powertrain warranties in the industry: 10 years or 100,000 miles. However, most consumers don’t understand that these legendary powertrain warranties are exceptions to the yes-you-can-transfer-warranties rule. Mitsubishi and Genesis provide the same powertrain coverage, which is also an exception. When a Kia, Hyundai, Genesis, or Mitsubishi model changes owners, the powertrain coverage drops to 5 years or 60,000 miles. Again, both years and miles begin with the date the vehicle was purchased new.

The change is significant for used car shoppers who would buy a Hyundai, Kia, Genesis, or Mitsubishi on the strength of that very long powertrain warranty. However, the bulk of that excellent coverage is only available to the initial owner. However, there are some exceptions for certified pre-owned buyers. Customers who buy a certified Hyundai will get the full coverage, and certified pre-owned Kia buyers get the full powertrain warranty but not the full bumper-to-bumper limited warranty.

Then there’s the case of car flippers. Car flippers purchased highly sought-after vehicles in 2022, then resold them for higher prices. As a result, at least one carmaker changed its policy.

GMC’s website says, “The 2023 Hummer EV Edition 1 Pickup and 2024 Hummer EV Edition 1 SUV limited warranty transferability is subject to a 6-month retention policy from the date on which you take delivery.” However, certain warranties will be void if the owners sell the vehicle before six months. Those warranties are the Bumper-to-Bumper, Electric Vehicle Propulsion, Sheet Metal, Tire, and Accessory.

Confirm the Factory Warranty

We have checked each manufacturer’s warranty terms. However, we strongly suggest you call a local dealership and provide them with the VIN to verify the warranty is valid before signing any papers. After all, automakers sometimes change policies. If you’re interested in buying a used car with warranty coverage, you won’t want to leave it to chance.

How to Transfer a Factory Warranty

The current owner does not need to do anything to transfer a valid factory warranty to the new owner. If a factory warranty is still in effect when a car changes owners, the warranty goes with the car to the new owner.

Can You Transfer a CPO Warranty?

When a carmaker includes a used car in its certified pre-owned (CPO) program, it adds a CPO warranty as a benefit. The certified pre-owned warranty is much like a new car warranty. That is, it’s split into a limited bumper-to-bumper warranty and a limited powertrain warranty. Each is factory-backed. In other words, when performed in an approved service center, the factory will cover the cost of repairs on its list of specified components and systems.

Usually, the certified pre-owned limited bumper-to-bumper warranty is for one to two years with a mileage cap of 12,000 to 24,000 miles. However, CPO warranties, like those from Audi, BMW, and Mercedes Benz, don’t have a mileage cap. If any of the original new-car factory warranty remains, the CPO warranty almost always kicks in when the new-car warranty expires. Otherwise, it’s effective from the date you purchase the CPO vehicle.

When selling a car you first purchased as a certified pre-owned vehicle, the CPO warranty rules are similar to the factory new car warranty. We’ve found that manufacturer-certified pre-owned warranties usually transfer to a second owner. If you buy a car with a CPO warranty and resell it, any balance remaining of that warranty still covers the car under new ownership.

How Much Does Transferring a CPO Warranty Cost?

A few carmakers charge a fee of up to $100 to transfer the certified pre-owned warranty. (A BMW CPO warranty transfer will set you back $200.) However, the process is not automatic. If you buy a used car with time or miles left on the certified pre-owned warranty, we recommend contacting the automaker to be sure it transfers to you.

However, some CPO warranties make one important exception: They only transfer from one private individual to another. In other words, if you trade in your CPO car to a dealership, the CPO warranty is no longer valid. For the warranty to stay valid, you must sell it privately to a new owner.

Can You Transfer an Extended Warranty?

Although we are covering factory-backed warranties here, it’s worth mentioning how extended warranties work when selling a car. In addition to any factory warranties that come with every new or certified pre-owned car, an extended warranty picks up when your factory warranty expires. It’s up to you to decide if the extra coverage is worth the additional cost.

Most dealerships sell extended warranties, but the warranty company is unrelated to the carmaker. It’s a third-party vendor. This distinction is true of the extended warranty coverage you will find online as well.

As for transferring an extended warranty when you sell your car, often, these warranties are transferable. However, there is almost always a transfer fee.

TIP: There are some solid, reputable extended warranty companies, but there are several scammers, too. It’s buyer, beware.

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Editor’s Note: This article has been updated for accuracy since it was originally published.

FAQ

  • Can you transfer a new car warranty?

    New car warranties issued by the carmaker can be transferred in most cases.

  • How much does transferring a new car warranty cost?

    New car warranties issued by the carmaker automatically transfer free of charge from one owner to the next.

  • Can you transfer a CPO warranty?

    In most cases, yes. You can transfer the certified pre-owned vehicle warranty. However, the transfer must be from a private individual to another private individual. Some car manufacturers charge a fee anywhere from $50 to $200 to file the paperwork for transferring a certified pre-owned vehicle warranty.

  • What is powertrain warranty coverage?

    Typically, a powertrain warranty covers all the components responsible for making torque and ushering it to the wheels. For example, the engine, transmission, driveshaft, axles, and so forth are all included in the powertrain.

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