Matthew Oliver
Buying a used car can save you a lot of money compared to a new one. New cars are currently sitting around $48,644, according to Kelley Blue Book. But used cars? The average used car may only cost you about $25,571. That’s a pretty big difference.
Of course, we understand that there may be greater risk associated with the purchase of a used car. That’s why understanding used car warranties is so important. These warranties can protect you if things go wrong and can help make sure your investment is financially sound.
Let’s get into the details of what to look for in a used car warranty.
What is a Used Car Warranty?
Just as it sounds, these warranties offer some protection for those who purchase new cars. While new cars often come with a bumper-to-bumper warranty and a powertrain warranty up to a certain mileage, used car warranties are a bit different. They usually cover key parts of the car, like the engine and transmission, for a set period or mileage.
Here are the types of warranties typically associated with used cars.
- Manufacturer Warranties: The carmaker offers these and they may still be valid for used cars if they haven't expired.
- Extended Warranties: Purchased separately, these extend the coverage beyond the manufacturer’s warranty.
- Third-Party Warranties: These are sold by companies not affiliated with the car maker and vary widely in coverage and cost.
Key Factors to Consider When Choosing a Used Car Warranty
Auto repairs will typically run you about $548.32. Here is a list of the most common things that tend to go wrong with used cars where a warranty can help.
- Engine issues
- Transmission problems
- Electrical system failures
- Cooling system repairs
- Air conditioning breakdowns
That said, here are the key factors to consider when choosing the right used car warranty for your vehicle and financial situation.
Coverage Details
- Components Covered: A good warranty should cover major components like the engine, transmission, and drivetrain. Some may also include the electrical system and air conditioning.
- Exclusions: Be aware that most warranties do not cover wear-and-tear items such as tires, brake pads, or batteries. Pre-existing conditions may also be excluded.
Duration and Mileage Limits
- Term Length: Warranties typically last between one to five years. Choose one that aligns with how long you plan to keep the car.
- Mileage Limits: Warranties often have mileage caps. Confirm the limit is high enough to cover your driving habits and avoid lapsing before the warranty expires.
Cost and Payment Plans
- Upfront Cost vs. Monthly Payments: Some warranties require a one-time payment, while others offer monthly plans. Compare these options based on your budget and financial preferences.
- Value for Money: Assess if the warranty’s cost justifies the coverage it offers. Consider potential repair costs versus the warranty price to determine if it's a worthwhile investment.
Repair and Service Locations
- Authorized Service Centers: Check that the warranty includes access to a network of authorized repair centers that are convenient for you.
- Flexibility: Some warranties require repairs to be done at specific locations, while others allow any certified mechanic. Flexible options can be more convenient but may cost more.
Claim Process
- Ease of Filing a Claim: Look for warranties with a straightforward and quick claims process to avoid delays and frustration.
- Customer Service: Responsive and helpful customer support can make a big difference, especially when you need assistance with a claim or have questions about coverage.
Transferability
- Resale Value: A transferable warranty can increase the resale value of your vehicle, making it more attractive to potential buyers.
- Conditions: Check any conditions or fees related to transferring the warranty to a new owner. This is the best way to avoid costly surprises later.
Tips to Prolong the Life of Your Used Car
Now that you know what to look for in a used car warranty, let’s cover off on some basics on how to prolong the life of your used car.
- Regular Car Maintenance: Stick to the recommended maintenance schedule to keep your vehicle in good condition and address issues before they become major problems.
- Address Common Used Car Issues Early: Pay attention to signs of common used car issues like strange noises or warning lights and have them checked out promptly.
- Use the Correct Fuel: Always use the type of fuel specified in your car’s manual to get optimal performance and avoid potential engine damage.
- Timely Car Repairs: Don’t ignore minor problems. Addressing car repairs as soon as they arise can prevent more costly issues. And, if you are in a fender bender, get your car fixed right away to prevent bigger issues from developing.
- Keep the Car Clean: Regularly wash and wax your car to protect the paint and undercarriage from rust and corrosion, which can extend its lifespan. We recommend washing your car at least once every two weeks.
Love Your Car but Want to Lower Your Payments?
If you love the car you have and want to make it last a bit longer but don’t love your payments, RateWorks can help. We offer competitive auto loan refinancing that can save you money when you need it most.
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