Used car warranties, often referred to as extended warranties, are designed to provide vehicle owners with peace of mind by covering the costs of unexpected mechanical repairs after the original manufacturer’s warranty has expired. For those purchasing a used vehicle, understanding and selecting from the Best Used Car Warranty Programs can be crucial in mitigating potential financial risks associated with vehicle breakdowns. With numerous providers and varying levels of coverage available, navigating the landscape of used car warranties can be overwhelming. This guide aims to simplify the process, offering insights into what constitutes a top-tier used car warranty program and highlighting some of the leading companies in the industry.
Top Providers in Used Car Warranty Programs
When it comes to safeguarding your used vehicle against unforeseen repair expenses, choosing the right warranty provider is paramount. Based on thorough evaluations of numerous providers, several companies stand out for their comprehensive coverage options, customer satisfaction, and overall value in the used car warranty market. Here are some of the best used car warranty programs currently available:
CARCHEX
CARCHEX has consistently been recognized as a leader in the extended warranty industry, particularly for used vehicles. They offer a wide spectrum of coverage plans, catering to vehicles up to 10 years old and with as many as 250,000 miles. This broad eligibility makes CARCHEX a viable option for a significant range of used car owners. Their Gold plan is particularly noteworthy, frequently recommended for vehicles with higher mileage, as it incorporates coverage for vital components like brakes and steering, and even addresses wear and tear issues. This comprehensive approach makes CARCHEX a strong contender for those seeking robust protection for their used vehicles.
Toco Warranty
Toco Warranty presents a unique approach to used car warranties with their plan structure based on vehicle age and mileage. Their offerings are divided into the Blue, Yellow, and Orange plans, each designed to suit different vehicle profiles. The Blue plan is the most basic, providing powertrain coverage for older models—specifically, vehicles dating back to 2000 with up to 175,000 miles. For newer vehicles, the Yellow plan covers models from 2011 and newer with up to 100,000 miles, offering a step up in protection. At the top end, the Orange plan is Toco Warranty’s most comprehensive option, aimed at vehicles less than 5 years old with under 60,000 miles. This tiered system allows consumers to select a plan that closely matches their vehicle’s age and usage, potentially optimizing cost and coverage.
autopom!
Autopom! has cultivated a strong reputation within the used car warranty sector, underscored by their “A+” rating from the Better Business Bureau. This high rating reflects their commitment to customer service and reliable coverage. Autopom! provides coverage for used cars with up to 150,000 miles, and distinguishes itself by offering a diverse array of plans. This variety ensures that customers can find a warranty solution that aligns with their specific needs and budget. The positive reputation and plan flexibility make autopom! a trustworthy option in the used car warranty market.
Omega Autocare
Omega Autocare specializes in providing warranty solutions tailored for used vehicles, with two primary plans designed for this market segment. Their Used Stated Coverage plan is intended for vehicles up to 10 years old with fewer than 150,000 miles, offering broad protection across most of the vehicle’s critical systems. For older, higher-mileage vehicles, the Powertrain Protection plan offers essential coverage for the powertrain—engine and transmission—for cars up to 15 years old and with up to 250,000 miles. Omega’s focused approach on used car needs makes them a relevant choice for owners of older vehicles seeking targeted coverage.
CarShield
CarShield is recognized for accommodating high-mileage vehicles, offering extended warranties for cars with up to 200,000 miles. Among their plan options, the Platinum plan is highlighted as their premier coverage for high-mileage vehicles. Beyond the typical mechanical component coverage, the Platinum plan extends protection to components such as the fuel injector, fuel pump, and suspension system. CarShield also provides the added flexibility of month-to-month contracts, appealing to customers who prefer not to commit to long-term agreements. This flexibility and high-mileage focus position CarShield as a practical option for a wide range of used car owners.
Endurance
Endurance sets itself apart with the Select Premier plan, specifically designed for used vehicles with up to 150,000 miles. This plan delivers comprehensive coverage, extending beyond just the major mechanical parts to include electrical, cooling, air conditioning, heating, and fuel systems. Endurance distinguishes itself further by directly administering their warranties, rather than acting as a broker. This direct approach can streamline the claims process and enhance customer experience. Coupled with their broad system coverage, Endurance offers a compelling warranty option for used car owners seeking extensive protection and direct service.
Understanding Used Car Warranty Coverage
A used car warranty is essentially a service contract that agrees to pay for specific repairs or replacements of mechanical components in your vehicle. The extent of coverage can vary widely based on the plan you choose. Basic warranties typically concentrate on the powertrain, which includes the engine and transmission—the core systems that make the vehicle move. More comprehensive plans, however, can extend to cover virtually all mechanical and electrical systems in the car.
Types of Used Car Warranties Explained
Navigating the types of used car warranties can be simplified by understanding the common categories:
- Bumper-to-Bumper Warranty: Despite the name, this warranty doesn’t literally cover everything from bumper to bumper, but it is the most comprehensive type. It aims to cover nearly all mechanical and electrical components of the vehicle, excluding wear-and-tear items and maintenance.
- Powertrain Warranty: This is the most basic level of coverage, focusing on the essential components that make the car run—the engine, transmission, and drivetrain. It’s designed to protect against major mechanical failures of these critical systems.
- Drivetrain Warranty: Often confused with powertrain, drivetrain warranties typically cover the same components but may exclude the engine itself in some definitions, focusing more on the transmission, axles, and related parts that transfer power to the wheels.
- Wrap Warranty: This type is designed to “wrap” around an existing powertrain warranty to provide broader coverage. It essentially adds components and systems to the protection that are not included in a basic powertrain warranty.
- Corrosion Warranty: Specifically targets rust and corrosion damage to the vehicle’s body panels. It usually covers perforation from rust, meaning rust that eats through the metal.
It’s important to note the exclusions. Used car warranties generally do not cover routine maintenance services like oil changes or tire rotations, parts that wear out through normal use (like brake pads or windshield wipers), or damage resulting from neglect or misuse. Always review the specifics of what is covered and, importantly, what is not covered in any used car warranty program you are considering.
Steps to Secure a Used Car Warranty
Obtaining a warranty for a used car is a straightforward process, whether you are purchasing from a dealership or considering adding coverage to a vehicle you already own. Here are three key steps to guide you through securing a used car warranty:
Step 1: Verify Original Warranty Status
Before investing in a used car warranty, first confirm whether the vehicle’s original manufacturer warranty is still in effect. New car warranties often last for a significant period, such as three years or 36,000 miles, and sometimes longer depending on the manufacturer. If the original warranty is still active, purchasing an extended warranty might be redundant. When buying from a dealership, the Buyer’s Guide, which dealers are legally required to display on used vehicles, should indicate the warranty status. If it states “As Is,” it typically means the original warranty no longer applies, making it a point where considering a used car warranty becomes relevant.
Step 2: Understand Mileage and Cost Implications
Be prepared for used car warranties to potentially cost more than warranties for new cars. This isn’t solely because the car is used, but more related to mileage and age. Warranty providers assess risk based on these factors; older, higher-mileage vehicles are statistically more likely to require repairs. Consequently, warranties for such vehicles can be priced higher, sometimes reaching up to $3,000 or more depending on the coverage level and vehicle specifics. It’s crucial to factor this potential cost into your budget when considering a used car warranty.
Step 3: Compare and Shop Around
Just as you would compare rates for car insurance, it’s essential to shop around and get quotes from multiple used car warranty companies. Don’t settle for the first offer you receive. Exploring options from various providers will help you find a policy that not only offers the coverage you need but also fits your budget. While your choices might be somewhat limited for very high-mileage vehicles, the market for used car warranties is competitive, with numerous reputable companies vying for your business. This competition works to your advantage, increasing your chances of finding a favorable deal.
Where to Purchase a Used Car Warranty
Used car warranties are available through various channels, offering consumers flexibility in where they purchase their coverage:
- Used Car Dealerships: Dealerships often offer warranties at the point of sale. These can be from the manufacturer or third-party providers.
- Vehicle Manufacturers: Some manufacturers offer certified pre-owned (CPO) programs that include extended warranty coverage.
- Third-Party Providers: Independent warranty companies specialize in used car warranties and often offer a wider range of plans than dealerships.
- Insurance Companies: Some major insurance providers offer mechanical breakdown insurance, which is similar to a used car warranty.
- Lenders: In some cases, financing institutions may offer or include warranty options when you finance a used vehicle.
Is a Used Car Warranty a Worthwhile Investment?
The question of whether a used car warranty is a sound investment is contingent on individual circumstances and risk tolerance. For many car owners, particularly those who have researched their vehicle’s reliability and are confident in its condition, a used car warranty may not be necessary. If you have sufficient financial reserves to comfortably handle potential major repairs out-of-pocket, the added cost of a warranty might not be justified.
However, for others, the peace of mind provided by a used car warranty can be invaluable. Older vehicles, or those with a history of reliability issues, are inherently more prone to mechanical failures. A significant breakdown could lead to substantial repair bills, potentially running into thousands of dollars. If you’ve purchased a used car with known potential issues or if you prefer to have financial protection against large, unexpected auto repair costs, then a used car warranty is definitely worth considering. It’s about balancing the cost of the warranty against the potential cost of repairs and your personal comfort with financial risk.
Methodology for Evaluating Used Car Warranty Programs
Our evaluation of used car warranty companies is based on a comprehensive comparison of 11 major providers, focusing on key factors that are critical to consumers. The methodology includes:
- Cost Competitiveness: Assessing how the pricing of warranties compares relative to competitors in the market.
- Breadth of Coverage Options: Evaluating the number and variety of coverage plans offered, catering to different needs and vehicle types.
- Mileage Coverage Limits: Analyzing the maximum mileage allowed for vehicle eligibility under their warranty programs.
- Better Business Bureau (BBB) Rating: Incorporating BBB ratings as an indicator of customer satisfaction and business reliability.
- AM Best Rating: Considering AM Best ratings as a measure of the financial strength and stability of the warranty provider.
Each company was scored based on these categories, with a maximum of 5 points attainable per category. The companies were then ranked according to their total scores to determine the top recommendations for used car warranty programs. This methodology ensures a balanced and objective assessment, focusing on factors that are most relevant to consumers seeking to protect their used vehicle investments.
Used Car Warranty Basics: Video Explanation
[Video: Used Car Warranty Basics]
Frequently Asked Questions About Used Car Warranties
How much does a warranty cost for a used car?
The price of a used car warranty can vary significantly, generally ranging from $1,000 to $5,000. Factors influencing the cost include the vehicle’s age, mileage, condition, and the type of coverage selected. Used car warranties typically are more expensive than new car extended warranties because used vehicles are statistically more likely to require repairs due to age and accumulated wear.
What is typically covered under a used car warranty?
Coverage under a used car warranty depends on the specific plan but generally includes the costs to repair or replace major mechanical parts and systems of the vehicle. Basic plans often cover the powertrain—engine and transmission—while more comprehensive plans extend to include components like electrical systems, air conditioning, and advanced technological features.
Is it possible to get a used car warranty after purchasing the vehicle?
Yes, it is absolutely possible. While dealerships may primarily offer warranties at the point of sale, numerous third-party extended warranty companies, such as CARCHEX, Toco Warranty, and autopom!, provide warranties for used cars even after they have been purchased, provided the vehicle meets their eligibility criteria regarding age and mileage.
Is purchasing a warranty on a used car a worthwhile investment?
The value of a used car warranty is subjective and depends on individual circumstances. Generally, it is more beneficial for owners of vehicles that are older, have higher mileage, or are known to be less reliable. If you cannot easily afford unexpected major repairs, a warranty can offer financial protection and peace of mind. However, for reliable vehicles and owners who can absorb repair costs, the warranty might not provide significant financial benefit.
Do I need to have car insurance before buying a used car?
In almost every state, yes, you are required to have car insurance before you can legally drive a used car off a dealership lot. Proof of insurance is typically needed to finalize the purchase. While private sales might not always require immediate proof of insurance, driving any vehicle without insurance is illegal and carries significant risks.
Is full coverage insurance necessary for a used car?
Full coverage insurance is not legally mandated for any vehicle, used or new, in most states unless it is financed or leased. However, if you would be unable to afford to replace or repair your used car if it were damaged in an accident or other incident, carrying full coverage (which typically includes collision and comprehensive) is highly advisable, regardless of the car’s age or value.
What is the average cost of an extended car warranty?
The average cost of an extended car warranty is approximately $1,500, with a typical range from $1,000 to $3,000. The exact price depends on factors such as the vehicle’s make, model, mileage, and the extent of coverage provided by the warranty.
Are extended car warranties generally considered a good value?
Whether an extended car warranty is a good value is debatable. For those who are risk-averse and want to protect against potentially high repair costs, or for those owning less reliable vehicles, it can be valuable. However, many vehicles may not experience major breakdowns during the warranty period, making the cost of the warranty potentially outweigh the benefits for some owners.
How soon after buying a used car do I need to obtain insurance?
If purchasing from a dealership, you need to have insurance in place before you drive the car away. If you already have an existing car insurance policy, it might offer a grace period for newly acquired vehicles, potentially up to 30 days, depending on your insurer. However, it’s always best to confirm with your insurance provider to ensure you are legally covered immediately.
What exactly is bumper-to-bumper insurance?
The term “bumper-to-bumper insurance” is a misnomer. It’s actually a type of car warranty, not insurance, and it’s offered by car manufacturers. A bumper-to-bumper warranty is the most comprehensive warranty coverage, designed to cover nearly all vehicle components against defects and failures, excluding routine wear and tear and maintenance items. Car insurance, on the other hand, covers damages and liabilities from accidents and other incidents like theft or natural disasters.
