Choosing the Right Warranty Program

Posted Thursday, Nov 16, 2023

The sharp rise in the cost of raw materials and transportation has done a number on just about every industry, including the automobile market. With the prices of new vehicles continuing their upward trajectory, many consumers are left with no choice but to opt for pre-owned vehicles.

Despite the growing popularity of the used car market, there are still some consumers who are hesitant to invest in a used vehicle.

This is where implied warranties come in. A warranty that’s offered by a used car dealership comes with just about every vehicle in their inventory, except, of course, if the used car has been disclaimed in writing or falls under an “as is” agreement.

It should be noted that a verbal promise does not qualify as a warranty program, which is why consumers need to make sure they read the buyer’s guide and call the used car dealership before buying the pre-owned vehicle.

Before we dive into the specifics, it's essential to understand why warranty programs are crucial when buying a used car. When you buy a used vehicle, it has a history, and you may not be aware of its full maintenance and repair record. A warranty program protects against unexpected repair costs, helping you avoid financial surprises down the road.

Certified Pre-Owned (CPO) Programs

Certified Pre-Owned (CPO) programs are offered by many car dealerships. These programs are known for providing a level of assurance when buying a used car. Here's how they work:

Thorough Inspection

The good news is that CPO vehicles undergo a comprehensive inspection to ensure they meet certain quality standards. This inspection covers everything from the engine to the brakes, providing buyers with peace of mind regarding the car's condition.

Limited Warranties

CPO programs come with a limited warranty, usually covering a specific duration (e.g., 12 months or 24 months) or mileage (e.g., 12,000 miles or 24,000 miles). During this period, the dealership will cover certain repair costs.

Roadside Assistance

Many CPO programs also include roadside assistance, providing help with flat tires, dead batteries, or other roadside emergencies.

Higher Price

CPO cars tend to be priced higher than non-certified used cars because of the added benefits and assurance they offer.

Limited Selection

You should also remember that the selection of CPO vehicles may be more limited compared to non-certified used cars, so keep that in mind when buying used vehicles.

Extended Warranty Programs

Extended warranty programs are a popular choice for used car buyers. They can be purchased separately from the car purchase, providing additional coverage.

Customizable Coverage

Extended warranties are often highly customizable. Buyers can select the level of coverage that suits their needs, from basic powertrain coverage to comprehensive bumper-to-bumper coverage.

Transferable

In many cases, extended warranties can be transferred to a new owner if you decide to sell your car. This can be an attractive selling point when you decide to part with the vehicle.

Added Peace of Mind

Extended warranties can offer peace of mind, especially for buyers who plan to keep their used car for an extended period.

Additional Cost

Extended warranties come at an extra cost, which can increase the overall price of the used car.

Coverage Limitations

It's essential to read the fine print. Some extended warranties may come with specific terms and conditions, and not all repairs may be covered.

Third-Party Warranty Programs

Third-party warranty companies specialize in offering warranty programs for used cars. These programs can provide more flexibility in terms of coverage and cost. Now, let’s take a quick look at this popular option.

Customized Coverage

Third-party warranty programs often allow for a high degree of customization. Buyers can choose from various coverage options to fit their needs.

Wider Selection

Since these warranties aren't tied to a specific manufacturer or dealership, there's a more extensive selection of vehicles that can be covered.

Transferable

Many third-party warranties are transferable, potentially increasing the car's resale value.

Varied Quality

The quality and reliability of third-party warranty companies can vary. It's essential to research and select a reputable provider.

Price Variation

It is important to note that the prices for third-party warranties can vary widely, so it's crucial to compare quotes and coverage carefully.

Researching Specific Warranty Programs

Now that we've explored the types of warranty programs available, it’s time to look at what to expect in a warranty program. The following is a quick breakdown of what you can expect to find in a typical warranty agreement for a used vehicle.

Duration and Mileage

Different warranties come with various durations and mileage limits. You'll want to consider how long you plan to keep the vehicle and how many miles you anticipate driving. Select a warranty that aligns with your ownership goals.

Transferability

If there's a chance you might sell the car before the warranty expires, check if the warranty is transferable to the new owner. This can be a valuable selling point.

Coverage Details

Carefully read the coverage details in the warranty agreement. Understand what is and isn't covered. Be aware of any deductibles and limits on coverage.

Maintenance Requirements

Some warranties come with strict maintenance requirements. Make sure you're willing and able to meet these requirements to keep the warranty valid.

Fine Print

Always read the fine print. Understand the terms and conditions of the warranty. Be aware of any restrictions or limitations.

Avoiding Common Mistakes

When it comes to warranty programs for used cars, several common mistakes can be avoided with careful consideration. Here are a few of them to avoid.

Relying Solely on the Warranty

Warranty programs are excellent for protection, but they shouldn't replace a thorough inspection. Even with a warranty in place, it's crucial to have a trusted mechanic inspect the used car before purchase. A warranty won't help if you're buying a vehicle with hidden issues.

Neglecting Maintenance Responsibilities

Some warranties require strict adherence to maintenance schedules. Failing to do so could void the warranty. Before committing to a warranty, make sure you're prepared for the maintenance responsibilities it entails.

Not Checking Manufacturer Warranties

Some used cars might still have part of the original manufacturer's warranty remaining. It's vital to check if this coverage transfers to you, understand the remaining duration, and be aware of the terms. This can provide an added layer of protection without the need for an additional warranty.

Building a Solid Financial Foundation

Purchasing a used car with a warranty program is a wise financial decision, but there are other steps you can take to solidify your financial foundation. Create a budget that includes car expenses, including monthly payments, insurance, fuel, and maintenance costs. Regularly save money for unexpected repairs or emergencies. Consider investing in your financial education. Understanding the intricacies of loans, interest rates, and credit scores will empower you to make informed decisions about your finances. To find out more in-depth information on warranty programs for used cars visit Pro Care Auto Sales LLC.