Making sense of used-car warranties
Mechanic Ed Wuerth of Wuerth Automotive in Brownstown Township, Mich., works on a Volvo at his shop. While new car owners may worry about making monthly payments in the event of a job loss, those that have had their cars for a few years may face concerns about paying for a hefty repair, especially as a vehicle nears the end of its original warranty period. (Nov. 30, 2007) Credit: AP Photo
Used cars tend to carry fewer warranties than their brand-new counterparts, but the policies can be just as daunting. For one, they rarely fit the mold of a new car's powertrain, bumper-to-bumper or accessory policy. Instead, they're often a mixed bag of coverage.
Many policies carry deductibles, partly because automakers don't technically classify them as warranties, said Mark Pierret, formerly the director of warranty management at automotive consultancy MSX International and current director of sales at Dealer Tire. Like most insurance policies, many of these so-called warranties are strictly contractual to minimize liability, Pierret said.
Still, most consumers see little difference between used-car policies and a new-car warranty: They cover anything from the powertrain to the electrical system to audio accessories, though some will only pay a portion of the repair costs. To find the basic types of warranties, we checked a number of used-car policies at dealerships and online. We also consulted a few experts -- among them Pierret; Lemuel Dowdy, a senior attorney at the Federal Trade Commission; Rob Gentile, director of auto information products at Consumer Reports; and Brett Smith, assistant research director at the Center for Automotive Research. Here's what we found.
Basic used: In most states, dealerships and private parties are allowed to sell a car as-is without a warranty. Often, dealers will furnish a minimal warranty to help sell the car. These policies are rudimentary, offering to pay some percentage -- for example, 50 percent -- of parts and labor for specific components that fail. They can expire anywhere from 30 days to a year after the sale.
Extended-length: Extended-length policies are sold by automakers or third parties. Often called service contracts, these programs are similar to extended-length warranties for new cars. They protect used-car purchasers from costly failures down the road, in some cases up to 100,000 original miles. Policies come in all shapes and sizes; some cover only the most serious engine failures, while others include everything short of regular maintenance. Basic policies usually carry higher deductibles than pricier ones.
Certified pre-owned: In addition to the balance of the original bumper-to-bumper and powertrain warranties, nearly all certified pre-owned vehicles carry extra coverage to lend some extra appeal. Programs generally include longer powertrain coverage -- in some cases going as long as 100,000 original miles. Some automakers also have bumper-to-bumper policies that cover most components for a short while after purchase. Many policies have a nominal deductible, and virtually all of them provide roadside assistance.
Implied: Implied warranties are required in a handful of states that don't allow a used car to be sold as-is. In such situations, sellers can only sell what could reasonably be called a motor vehicle, meaning it has to run. In such cases, if the buyer drove the car for a week and the wheels fell off, and a mechanic could prove that whatever caused the failure existed at the time of sale, the seller might be obligated to make repairs.
Aftermarket accessories: Aftermarket accessories range from hi-fi stereos to high-boost turbochargers. They're seldom covered in new-car warranties, and some of the most invasive add-ons can void the car's original policy. In response, aftermarket manufacturers frequently offer their own warranties; read them carefully, as they tend to cover just the aftermarket component, not any original parts that might be affected.
Replacement parts: Parts bought from a dealership to replace defective ones generally carry warranties of a year or longer, sometimes with corresponding mileage limits. Some automakers have separate policies for replacement batteries, and those policies can last considerably longer.
