Before you get talked into buying an extended warranty when you don’t even know what it is or if it will benefit you – just stop, and take a deep breath.
Used car warranties can be tricky to figure out, but here’s what you really need to know.
What is A Used Car Warranty?
A used car warranty can be an extended warranty, which is a warranty that the car owner takes out after the original or manufacturer warranty has expired or in some cases like with a CPO, certified a pre-owned vehicle, it can still be the original warranty. (When in doubt, phone your car dealer and find out.)
A car warranty, in case you didn’t know, is more or less a type of insurance that covers you as a car owner in the case where your car needs certain types of repairs done.
A car warranty is usually valid for x years or x miles, there’s most likely a ‘whichever comes first’ clause in there somewhere.
This is how it works; once you choose a car warranty you then pay a monthly fee in order to get the cover that your warranty is meant to provide.
Often, you can work that amount into your car financing but either way, you will end up paying it yourself.
Insurance vs. Extended Warranty
If you are asking yourself what the difference is between a car warranty and general car insurance, you’re not alone.
Although an extended warranty would probably count as insurance to some extent it doesn’t offer the same type of coverage that regular car insurance does.
Car Insurance covers you more in terms of accidents, hail, theft, that sort of thing – in other words, external damage due to you know, driving.
Let’s say, for example, you pull out of the used car dealer’s lot and get rear-ended by some crazy old lady who forgot to put on her glasses this morning – that would be covered by car insurance and not by an extended warranty.
An extended warranty is more for cover in terms of faults of the car’s moving parts which can sometimes include damage to functional parts, such as airbags or engine parts, in an accident but that’s very rare and will probably not be cheap.
Is It The Right Option For You?
That really depends on a lot of things, bear with me here.
See the point of a car warranty is to cover the car’s moving parts with regards to wearing and damage, but the older your car is the more wear the parts have and the more likely those parts are to cause damage.
This means that any company that offers an extended warranty to a car that’s older than (let’s say) 5 years, is basically signing up to do all of your car repairs for less than nothing compared to the cost.
Especially if you have the unfortunate luck to buy a Lemon Car, which I sincerely hope never happens to you, although the lemon law (PA) is still on your side if that does happen.
So when you’re looking at extended warranties, one of two things will happen, you will either end up paying way more than you should and can afford, or they will try and weasel out of every claim by means of general sliminess.
With that said, however, it doesn’t hurt to try.
Is The Original Warranty Still Valid?
When you’re looking at buying a warranty with a car, and the car is relatively low in mileage or is a CPO (certified pre-owned) there’s a good chance that the original warranty is still valid.
The reason that’s likely is that a CPO is inspected from top to tires by the manufacturer and is then deemed worthy of being resold as low-mileage, quality (yet slightly more expensive) vehicle.
And if you buy from a brand dealer such as a BMW or Mercedez Benz dealership they will, no doubt, include that in their sales pitch.
But if you buy from a used car dealership, the opposite is unfortunately true.
Therefore if you notice that the car’s mileage is especially low, or that the car is practically new, it’s worth it to phone the manufacturer and find out whether the original warranty is still valid.
Telesales people Are Your Enemy
Salespeople are trained to say the right things at the right time, and they’re trained to combat your hesitation in any way possible in order to get you to buy whatever the hell it is they’re selling.
So when you start filling in those little me forms on the pages of the car warranty websites, and the calls starting come in, daily, sometimes several times a day – you need to remind yourself of this simple, sobering fact; telesales people do not have your best interest at heart.
No matter how tempted you are and how good that offer may sound, you should never give in unless you have a detailed contract in front of you.
Even when they start pushing their ‘for one day only’ bullshit, then you know they’re really trying to back you into a corner.
What should you do if the offer sounds feasible then?
You ask them for the documentation and inspect it accordingly.
Compare, Compare, Compare and Compare Again.
When it comes to finding a used car warranty, keep in mind that you are essentially making provision for nasty, unexpected surprises and in doing that, one can never be too careful.
Take as much time as you need to while actively seeking a provider for your used car warranty and keep comparing the companies, their product and their offer with each other until you eventually (possibly) have a winner.
You can easily draw up an excel spreadsheet and list the different coverage that is important, or the most common ones that occur in the contract or offer.
This is an easy way to compare price vs quality vs reliability and will help you to come to a decision quicker.
A Practical Alternative
If you are on the opposite side of the spectrum where you realize that an extended warranty is just not for you and your car, then you should definitely make sure you have a backup plan as quickly as humanly possible.
Because let’s face it, this is life and as it goes shit does tend to hit the fan, often at an alarming rate, so it’s best to always be prepared.