Used car warranties: what to know

What is a used car warranty?

“Used car warranty” is just an umbrella term for any kind of warranty coverage that can be applied to a pre-owned vehicle.

Generally speaking, you can split “used car warranties” into two groups: warranties that come with used cars and warranties that you have to purchase separately. We’ll explain each to give you a better idea of what we mean.

What kinds of warranties are included with used cars?

Not every used car comes with a warranty, but if yours does, it will likely have one (or more) of these:

• Factory warranties are still in effect on many used cars. All new cars sold in the United States come with a factory warranty that lasts for at least three years/36,000 miles, and these warranties follow the car, not the owner. That means if you purchase a 2-year-old Toyota with 30,000 miles on it, you’ll automatically inherit the remainder of the basic factory warranty (one year/6,000 miles).
• Certified pre-owned warranties are only included on CPO vehicles, but they’re backed by the car’s manufacturer, just like your factory warranty.
• Dealership warranties are often much shorter than factory or CPO warranties and are backed by the dealer selling you the vehicle. CarMax, for example, includes a 90-day/4,000-mile warranty with all of its used car sales.

If you’re not sure what kind of warranty coverage might come with a particular used car, the best thing you can do is to ask the seller. Dealers will typically be happy to tell you since free warranty coverage is often a big selling point.

For a faster answer, you can also do a free car warranty check using your vehicle identification number (VIN). Just be aware this will only show you the remainder of the factory warranty, and it may not show you any bonus warranty coverage the seller has attached, like a three-month/3,000-mile dealer warranty.

What kinds of used car warranties can be purchased separately?

Even if your pre-owned car comes with a warranty, it won’t last forever. That’s why many folks who plan to own their cars long-term look for more coverage:

• Extended auto warranties, more accurately called vehicle service contracts, are plans that you can purchase separately for your pre-owned vehicle. Like shopping for auto insurance, the process of buying an extended warranty involves collecting multiple quotes, comparing coverage and choosing the plan and payment options that work best for you.

A reviewer from South Carolina who had a service contract from Fidelity Warranty Services used it for repairs to a leak in an oil filter. “Checked with my Jeep dealer for repairs and they were able to contact Fidelity after evaluating the problem with my Jeep.” he said. “Repairs cost about $715 and I only had to pay $114 when I picked up the Jeep from the dealer. … Although the warranty cost was more than the repair, the warranty gives me an avenue if major repairs are needed.”

We have plenty of extended auto warranty advice to help you find the right plan — but that’s assuming you even want one in the first place. To find out if an extended warranty makes sense for your budget and vehicle, keep reading, or check out our guide to whether you should buy an extended auto warranty on a used car.

What does a used car warranty cover?

An auto warranty guarantees certain parts on your vehicle against factory defects. “Factory defects” are issues that stem from either bad design or workmanship. So, if your car doesn’t start, your transmission acts jerky or your infotainment system suddenly goes black, these issues would likely be covered under warranty.

Auto warranties almost never cover issues related to:

• Damage from weather, collisions or other outside sources
• Neglect, like going without an oil change
• Misuse, like off-roading, racing or towing beyond the vehicle’s rated towing capacity
• Aftermarket parts that cause other parts to fail, like a lift kit that damages your suspension

When it comes to which parts are covered by your warranty, there are generally two types of coverage to be aware of:

• Bumper-to-bumper warranties, also called “Limited” or “Platinum” warranties, typically cover 95% or more of the parts on your car. That’s virtually everything except wear-and-tear parts, like wiper blades or brake pads, and a few other exclusions.
• Powertrain warranties typically only cover around 50 parts, including your vehicle’s engine, transmission and drive axle. Even though that’s only a small fraction of the coverage of a bumper-to-bumper warranty, powertrain warranties are still helpful because they can cover engine and transmission repairs that would otherwise cost you thousands.

CPO, dealership and factory warranties typically include a short period of bumper-to-bumper coverage and a longer period of powertrain coverage. CPO Chevrolets, for example, include both a one-year/12,000-mile bumper-to-bumper warranty and a six-year/100,000-mile powertrain warranty.

When you purchase an extended warranty, though, you typically have more options. That means you can get something in between a bumper-to-bumper plan and a powertrain plan. olive’s “Powertrain Plus” plan, for example, covers your engine, transmission, drive axles, front suspension, steering, brakes, air conditioning and more. (You might see similar midtier plans from other companies labeled as “Gold,” “Silver” or “Superior.”)

» MORE: What does a car warranty cover?

Recap

• A “used car warranty” is any warranty that applies to a pre-owned car.
• Used cars can come with a variety of warranties from different sources.
• You can also buy an extended warranty if you want more coverage.
• Most used car warranties offer either bumper-to-bumper coverage or powertrain coverage, but extended warranties give you more options.

What do used car warranties cost?

Here’s a quick breakdown of how much each type of used car warranty should cost you:

• Factory warranties are included in the cost of a used car since they automatically transfer to you when you take ownership of the vehicle.
• CPO warranties are included in the cost of a certified pre-owned vehicle purchase. According to a study by iSeeCars, the average CPO vehicle costs around 3.6% more than its pre-owned equivalent without a CPO warranty. That’s $1,260 extra on an otherwise $35,000 car.
• Dealership warranties are typically included in the cost of a used car, but sometimes dealers will sneak them in as a hidden upcharge. You can find out by asking the dealer for an itemized invoice showing the “out-the-door price,” and if there’s a dealership warranty on there for $1,000 or so that you didn’t ask for, you can often have it removed.
• Extended warranties cost around $1,000 per year for bumper-to-bumper coverage, but rates vary significantly, so you generally need to get quotes for your vehicle if you want an accurate idea of what you’ll spend.

» MORE: How much does an extended car warranty cost?

Factors that affect used car warranty prices

The main factors that influence the cost of a used car warranty (specifically, an extended warranty) include but aren’t limited to:

• Your vehicle’s make, model, age and mileage
• Your vehicle’s reputation for reliability
• The current cost of mechanic labor
• Your choice of warranty provider
• Your chosen coverage level, deductible and warranty length

In other words, a two-year powertrain warranty on a 2021 Toyota Corolla — a car with a legendary reputation for reliability — may only cost a few hundred dollars. In contrast, a seven-year/100,000-mile bumper-to-bumper warranty on a 2010 Maserati GranTurismo may cost $10,000 or more.

» MORE: How to get a cheap extended car warranty

Is a used car warranty worth it?

Since dealership warranties and factory warranties don’t add to your costs, the real question is: Is it worth paying extra for a CPO/extended auto warranty?

Here’s a step-by-step guide to help you decide for yourself:

1. Determine if the vehicle already has a warranty.

You can find out what kind of coverage it might already have by calling the seller or contacting the manufacturer. In either case, you’ll want to have your VIN handy. And if you’re relying on a dealer warranty, be sure to ask for details and get a complete list of the covered parts in writing.

2. Think about how long you want to keep the vehicle.

Some used cars come with extremely lengthy factory warranties. A certified pre-owned Genesis, for example, comes with a six-year/75,000-mile bumper-to-bumper warranty and a 10-year/100,000-mile powertrain warranty. That might be all you need, even if you plan to keep the car for a long time.

In other cases, you may only have one more year until your used car warranty expires. If you plan to keep it for three years after that, it might make sense to consider an extended warranty so you’re covered the entire time.

3. Determine what type of extended warranty you might need.

If you drive a vehicle with a reputation for engine problems — but everything else tends to work fine — you might only need powertrain coverage. If you drive a vehicle with so-so reliability across the board, you might want to plan on getting more comprehensive bumper-to-bumper protection.

We’ve done breakdowns of different extended car warranty options for each major automaker to give you a better idea of what’s right for you and your vehicle:

• Acura
• Alfa Romeo
• Audi
• BMW
• Buick
• Cadillac
• Chevrolet
• Chrysler
• Dodge
• Ford
• Genesis
• GMC
• Honda
• Hyundai
• Infiniti
• Jaguar
• Jeep
• Kia
• Land Rover
• Lexus
• Lincoln
• Maserati
• Mazda
• Mercedes-Benz
• Mini
• Mitsubishi
• Nissan
• Porsche
• Ram
• Subaru
• Tesla
• Toyota
• Volkswagen
• Volvo

4. Research providers and start collecting quotes.

Now that you have an idea of the length and type of coverage you might want, you can start shopping around and collecting price quotes. (Check out our picks for the best extended car warranty companies to get a head start.)

Once you have all the relevant information in front of you, you can make the final call on whether an extended warranty is worth it for you.

If you’re still stumped, consider this question to help you make a choice: Even if you never ended up using your extended auto warranty, would you be glad you paid for it? If you answered “yes,” then it seems like the added peace of mind alone is well worth it to you.

» MORE: Is an extended car warranty worth it?