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Tips on Used Car Extended Car Warranties

by Autobytel Staff
May 20, 2011

Choosing a used car extended warranty can be a bewildering decision for someone who has never had any experience in doing so. Most consumers believe that all extended used car warranties are alike. The majority of buyers believe that as long as you have that piece of document stating that the extended used car warranty is going to be honored, then it shall be so. Unfortunately, that is far from the truth.

One of the first things that you as consumer must pay attention to is the price of the warranty itself. But by price, we don’t mean the cheapest. Do not be fooled into thinking that as long as you get the best deal that you have nothing more to worry about. Most warranties that are sold at abnormally cheap prices are unreliable when you go to collect on it down the road. If a dealer is notorious for selling cheap extended used car warranties then they are most likely not meeting the long term capital needs required to service the warranty when it is called upon. So when it comes to your next used car’s extended warranty be sure to do your homework with regards to acceptable rates for your particular warranty and make sure that the company selling you the extended used car warranty is not some fly-by-night, short-term company that will issue a warranty to you that is not going to be worth the paper it’s printed on.

Used Car Extended Warranty Track Record

When buying a used car extended warranty you should try and buy from a company that has a reputable and long-standing business history. Extended used car warranty can be bought from a dealer and companies who only specialize in extended used car warranties. In most cases it is better to purchase a used car extended warranty from companies whose main business focus is concerned with used car warranty. The reason is that independent car dealerships are more susceptible to the cyclical changes of the economic environment. If the dealer goes out of business due to a recession it will no longer be able to honor the extended used car warranty it had agreed to service. Conversely, companies who’s main focus is the sale of used car warranty are generally more liquid when it comes to market downturn as their day to day operation rely less on the sale of cars than a dealership. Used cars will still be sold through private parties for which people will still purchase an extended used car warranty, keeping independent warranty providers in business. 

Additionally, check with the Better Business Bureau (BBB.com) to see if there have been past complaints, especially with regards to car warranties.

Consumers who do decide to purchase an extended used car warranty should be aware that it is their best interest to do so soon after the manufacturer’s warranty has expired.

The better shape your car is in or the lower the miles on the odometer, the cheaper the warranty payments will be. Of course the amount you pay is also dependent on the various types of used car extended warranty you are going to be purchasing.

Popular types of Used Car Extended Warranties:

  • This is the most popular type of used car extended warranty. A bumper to bumper car warranty covers the entire vehicle except what is on the "exclusions list". These "exclusionary" items usually refer to the parts of your vehicle that require normal “maintenance” such as tires and oil changes.
  • This is considered bumper-to-bumper coverage.  It covers the entire car with regards to mechanical failure and wear and tear. Additionally it covers luxury amenities on vehicles such as navigation systems, entertainment or dvd setups, and phone and internet access systems.
  • This used car auto warranty is good if you power windows/seats, anti-lock brakes, or turbos. It is important to note that these are not bumper-to-bumper warranties. Nevertheless, many dealers try to pass them off as if they are, so be careful.
  • This used car warranty covers major items. These car warranties might not cover wear and tear, radiators, anti-lock brakes, turbos, or power windows/seats. They usually cover the engine, transmission, and drive train.

Regardless of the used car extended warranty you decide to buy make sure that you have thoroughly checked the various types of warranties and make sure you are comparing apples to apples and oranges to oranges.


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