What is a used car warranty?
“Used car warranty” is an umbrella term for any kind of coverage that can be applied to a pre-owned vehicle.
More specifically, a used car warranty can refer to either a manufacturer-backed warranty or a vehicle service contract that helps cover the cost of certain repairs after purchase. It may be provided by the original manufacturer, a dealership or a third-party company.
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.
Types of used car warranties
Not every used car comes with a warranty, but if yours does, it will likely have one (or more) of these:
- Manufacturer (CPO) warranties are only included on certified pre-owned vehicles. They are backed by the car’s manufacturer, just like the original factory warranty.
- Dealer 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.
- Third-party warranties, more accurately called vehicle service contracts, are extended warranty plans that you can purchase separately for your pre-owned vehicle.
Compare CPO vs. dealer vs. third-party warranties
| CPO warranty | Dealer warranty | Third-party warranty | |
|---|---|---|---|
| Who provides it | Vehicle manufacturer | Individual dealership | Independent warranty company |
| Coverage quality | Usually the most comprehensive | Often limited or short-term | Varies by plan and provider |
| Where repairs are done | Authorized manufacturer dealerships | That specific dealership | Approved repair shops |
| Transferable | Usually | Rarely | Usually |
| Cost | Included in higher CPO price | Sometimes included or added | Separate upfront or monthly cost |
Explore extended warranties by manufacturer
We’ve done breakdowns of different manufacturers’ extended warranties for major automakers to give you a better idea of what’s right for you and your vehicle:
What does a used car warranty cover?
An auto warranty covers certain parts of your vehicle against factory defects or mechanical failures, depending on the level of coverage. “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.
What used car warranties don’t cover
Auto warranties almost never cover issues related to damage from weather, collisions or other outside sources (that’s what insurance is for). Plans also exclude problems caused by neglect, misuse or aftermarket parts.
» LEARN: Car insurance vs. car warranties
Types of used car warranty coverage
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 most vehicle systems, with exclusions for normal wear-and-tear items, 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.
Compare powertrain vs. bumper-to-bumper warranties
| Powertrain | Bumper-to-bumper | |
|---|---|---|
| Coverage scope | Major mechanical parts only | Most vehicle systems |
| What it covers | Engine, transmission, drivetrain | Engine, electronics, AC, suspension, tech |
| What it doesn’t cover | Electrical, comfort, tech features | Regular maintenance and wear items |
| Relative cost | Lower | Higher |
| Best for | Older or high-mileage vehicles | Newer used cars or drivers wanting maximum coverage |
How much do used car warranties cost?
Used car warranties can cost anywhere from $1,000 to $5,000. The price comes down to your car’s age, mileage on the odometer and the protection plan you choose. Here’s a quick breakdown of how much each type of used car warranty should cost you:
- 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.
- Dealer 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.
- Third-party warranties cost around $1,000 per year for bumper-to-bumper coverage. Rates vary significantly, so you generally need to get quotes for your vehicle if you want an accurate idea of what you’ll spend.
Is a used car warranty worth the cost?
One way to evaluate a warranty is to compare its price to the cost of a major repair. Many extended warranties run about $1,000 per year, or a few thousand dollars over the life of the plan.
By comparison, a transmission repair or replacement can cost roughly $3,000 to $7,000, depending on the vehicle. If your car is at higher risk for major mechanical issues, a warranty could pay for itself with a single covered repair.
On the other hand, if your vehicle is reliable and repair costs are expected to be low, you may end up paying more for coverage than you receive in benefits. The decision comes down to your risk tolerance, budget and how long you plan to keep the car.
Pros and cons of used car warranties
Before deciding whether to purchase additional coverage, it helps to weigh the potential benefits against the drawbacks. A used car warranty can offer peace of mind and financial protection, but it’s not always the best fit for every driver or vehicle.
Pros
- Covers costly repairs
- Adds peace of mind
- May include extra perks
- Can boost resale value
- Flexible coverage options
Cons
- Can be expensive
- Limited coverage
- Claims may be denied
- Requires comparison shopping
How to file a claim and what to expect
When your car has a mechanical breakdown, stop driving it and contact your warranty provider before repairs start.
- Take the car to an approved car repair shop, where the provider reviews the issue and authorizes covered repairs.
- If approved, the warranty pays the shop directly (you usually pay a deductible), and repairs begin. You might be reimbursed for a rental car.
- If denied, you’ll be responsible for the cost. You can appeal the decision. To give yourself the best chance at winning your appeal, take note of the reason for the denial and provide evidence like routine maintenance records and contract language that support your argument for reversing the decision.
Consumer protection laws and regulations
Several U.S. consumer protection laws affect used car warranties and extended warranties:
- Magnuson-Moss Warranty Act: Requires warranty terms to be clearly written and disclosed, and gives consumers legal rights if a warranty provider fails to honor coverage.
- Federal Trade Commission (FTC) Used Car Rule: Requires dealers to post a Buyer’s Guide stating whether a used car is sold “as is” or with a warranty and what that warranty covers.
- State warranty and service contract laws: Regulate how extended warranties (vehicle service contracts) are sold, including licensing, cancellation rights and refund rules.
- State lemon laws: In some states, limited lemon law protections may apply to used cars, especially if they’re still under a manufacturer’s warranty.
Pro tip
Protections vary by state, so check your state attorney general’s office or consumer protection agency for specific rules. In some states, limited lemon law protections may apply to used cars, especially if they’re still under a manufacturer’s warranty.
Warranty cancellation and transfer policies
Many warranty providers offer a 30-day cancellation period with a full refund, though requirements vary by state.
If a warranty is “transferable,” it means you can transfer the remaining warranty coverage to the next owner of the car if you sell or donate it.
Usually, factory and certified pre-owned (CPO) warranties automatically transfer to the next owner. To transfer a third-party extended warranty, you’ll often need to complete some paperwork and pay a roughly $50 transfer fee. See your extended warranty contract for details and instructions in the fine print.
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 an extended auto warranty?
Overall, consumer experiences with extended auto warranties are mixed. Some drivers report helpful coverage for unexpected repairs. For instance, Darryl in Kentucky said he had an issue with their Nissan, “and all I paid was a $100 deductible. I got my car back the same day, which was fantastic.”
Others experience denied claims or communication issues, highlighting the importance of understanding coverage details before purchasing. Another reviewer, Linda in Illinois, was disappointed that her claim for a cracked axle was denied. “Despite being a loyal customer for years and paying $5,000 for a comprehensive warranty, I have been met with nothing but frustration and unhelpful responses,” Linda wrote in a review.
How to decide for yourself
Here’s a step-by-step guide to help you decide for yourself.
1. Check if the car already has warranty coverage
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.
Car dealers will typically be happy to tell you since free warranty coverage is often a big selling point. You can also do a free car warranty check using your vehicle identification number (VIN).
Just be aware that this will only show you the remainder of the factory warranty. It may not show you any bonus warranty coverage the seller has attached, like a three-month/3,000-mile dealer warranty.
2. Think about how long you want to keep the vehicle
CPO warranties typically offer shorter bumper-to-bumper coverage and longer powertrain coverage. For example, CPO Chevrolets include a one-year/12,000-mile bumper-to-bumper warranty and a six-year/100,000-mile powertrain warranty.
If you’re buying a vehicle known for engine or transmission issues, powertrain coverage alone may be enough. If the model has mixed reliability across multiple systems, broader bumper-to-bumper coverage may make more sense.
Still not sure?
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 the added peace of mind alone is worth it for you.
Another way to think about it is to compare a warranty to setting money aside for repairs. Instead of paying for coverage, you could put that money into a savings account. If you don’t end up needing major repairs, you keep the money. But if a costly issue comes up, a warranty could reduce your out-of-pocket costs significantly.
3. Weigh the cost against your budget
Used car warranties typically cost between $600 and $1,000 per year, though many providers offer monthly payment options. Whether a warranty is worth the cost depends on how likely you are to use it.
While you can’t predict repairs with certainty, reliability ratings and owner-reported data can help you estimate the risk of future repair costs and decide if the added protection fits your budget.
Key takeaway
The more reliable your used vehicle is, the less often you can expect to need repairs covered by a warranty. And the less expensive repairs are for your used car, the less you’re likely to get back in covered claims compared to what you spend on a plan.
How to choose a used car warranty
Like shopping for auto insurance, the process of buying an extended warranty involves collecting multiple quotes, comparing coverage options and choosing the plan that works best for you.
Questions to ask before buying a used car warranty
If you lean toward third-party warranty companies for a used car warranty, the provider you choose can make a big difference in terms of cost, claims experience and more. These are the questions to ask before you make a decision.
- What exactly is covered and excluded? Ask for a list of covered parts, not just broad terms like “bumper-to-bumper.” Some add-on protections include trip interruption insurance and roadside assistance.
- Is there a waiting period before coverage starts? Some plans don’t cover repairs right away.
- Can I choose my repair shop? Find out where repairs must be done and if approval is required first.
- What are the deductible and out-of-pocket costs? Ask how much you’ll pay per visit or repair.
- Are there mileage or age limits? Coverage may end sooner than expected.
- How does the claims process work? Ask how claims are approved and how long it usually takes.
- Can I cancel the warranty? Confirm cancellation rules, fees and refund terms.
- Is the warranty transferable if I sell the car? This can affect resale value.
FAQ
Do used cars come with a warranty?
Used cars sometimes come with warranties, but not always. Certified pre-owned (CPO) cars always come with additional warranties, and standard used cars may come with a dealer-backed warranty and/or the remainder of the original factory warranty. You can find out how much warranty a used car has left (if any) by asking the seller or contacting the manufacturer.
What are the warning signs of a used car warranty scam?
Some of the most common signs of a used car warranty scam include high-pressure sales tactics, constant outreach from representatives and failure to provide sample contracts. Companies with limited information available online and only a small number of customer reviews are also a red flag.
Here are a few common examples of how these scams show up in real life:
- Robocalls or spam texts claiming your car’s warranty is about to expire, even if you never had one
- Sales reps pushing you to “act now” to avoid losing coverage, without giving you time to review details
- Vague coverage terms like “bumper-to-bumper” without a clear list of included parts
- Requests for upfront payment before sending a contract or full policy details
- Companies using names that sound similar to well-known brands to appear legitimate
- Refusal to answer questions about claims, deductibles or where repairs can be done
To protect yourself, always ask for a written contract, verify the company’s reputation through independent reviews and avoid making payments until you fully understand the terms.
Should I buy a used car warranty from the dealership?
Generally speaking, it’s best not to buy a used car warranty from the dealership without shopping around. Instead, you can take the offer, leave the dealership and call other dealers to see if they can beat it. You can also collect quotes online from third-party car warranty companies like Endurance and olive to try to find the best deal.
Can I get a warranty on a used car?
You can often get a warranty on a used car. Some used cars actually come with warranty coverage included in the price. You can also purchase a separate extended auto warranty for most used vehicles with under 75,000 miles.
How do factory warranties work?
Factory warranties are still in effect on many used cars. All new vehicles sold in the United States come with a factory warranty that lasts for at least three years/36,000 miles. 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).
» RELATED: How does an extended car warranty work?
Can I buy a warranty after purchase?
Yes, you can usually buy an extended warranty after purchasing a used car. Many third-party providers offer plans for vehicles that are a few years old or have moderate mileage. However, eligibility often depends on the car’s age and mileage, and some plans may require an inspection or have a waiting period before coverage begins.
How long do used car warranties last?
The length of a used car warranty depends on the type of coverage. Factory warranties typically last three years or 36,000 miles from the original purchase date, while powertrain coverage may extend to five years or 60,000 miles or more. Certified pre-owned (CPO) warranties often add extra coverage on top of the factory warranty. Extended warranties can range from one to 10 years, depending on the provider and plan.
Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
- Federal Trade Commission, “Extended Warranties and Service Contracts.” Accessed Jan. 21, 2026.
- California Department of Insurance, “Guide to Automobile Service Contracts, Extended Warranties and Other Repair Agreements.” Accessed Jan. 21, 2026.
- Consumer Advocates, “Auto Issues.” Accessed Jan. 21, 2026.
- Federal Trade Commission, “Used Car Rule.” Accessed Jan. 21, 2026.
