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Used Car Warranties

used car warrantiesIf there is one thing that can be said about used car warranties, it is that you will find very little standardization to them. When you buy a car from a dealer, whether a new car dealer or a used car dealer, the standard warranty can vary all across the universe--from "as is" (meaning, very simply, you don't have a warranty) to 12 month/12,000 miles, covering many major components. Probably the most common used car warranty, however, is a 3 month/3000 mile warranty that will cover only major drivetrain (the engine, transmission or transaxle, and rear end) components. If you buy a late model car, there is the chance that you will "inherit" the remainder of the new car factory warranty. Just remember that these warranties are all "either/or" meaning that the warranty ends when either the time or the mileage has been surpassed, whichever occurs first.

No matter what the warranty covers, make sure that you are clear on the limits of its coverage and have everything in writing. You will find that many warranties have more
exclusions (items not covered) than they do inclusions (what the warranty does cover). It is better to know up-front what you can expect rather than to have a nasty surprise when a component breaks and you find out that it was in the excluded section.

The following chart illustrates some of the terms, mileages, and coverages that are available on typical used car warranties.

Some Typical Used Car Warranty Terms and Coverages

Time Limit

Mileage Limit

Coverage Example

AS-IS No Warranty

AS-IS No Warranty


30 Days

1000 miles


90 Days

3000 miles


6 Months

6000 miles

Powertrain + Electrical

12 Months

12000 miles

Powertrain + Electrical + Braking System (Pads not covered)

If you are considering a Private Owner purchase, with the exception of the potential of some balance of factory warranty, the sale will be As-Is. For those who purchase As-Is vehicles, or with very limited warranties (either in time or coverage) an extended warranty may be a smart consideration.

Extended warranties

Car buyers always ask "should I buy an extended warranty?" When asked that question, a lot of automotive advisors will respond with "never buy an extended warranty." That's bad advice. The value of an extended warranty depends on two simple factors:
1) The price that you can buy it for, and
2) The limits of its coverage.
Blanket statements that advise never to buy an extended warranty should be kept there--under the blanket.
Example: If you were offered an extended warranty that covered every single item on the car for a full 5 years, and cost $50, would it be a good buy? How about a warranty that only covered the windshield wiper motor, lasted but 1 year, and cost $1000? Like the value of any purchase, its worth is relative to the price and the usage. In the example, the truth lies somewhere between those two fictional scenarios. An extended warranty that offers good coverage at a reasonable price is a good buy if you use it. One that offers limited coverage and costs and arm and a leg is a bad buy, whether you use it or not.

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