Used Car Warranties
Used car warranties cover specific repairs and situations after a factory warranty expires.
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Key Points:
- Used car warranties come in two categories–exclusionary coverage, which is similar to a factory warranty, and stated-component coverage, which covers fewer parts.
- Some manufacturers sell plans as long as the car is within its original warranty period, while others don’t.
- On average, a used car warranty plan costs about $109 per month or $977 per year.
Used car warranties can take some stress out of budgeting for unexpected car repairs. You can find them from manufacturers, used car dealers, and third-party companies. It’s important to understand the fine print when you’re shopping around, so that you can find the plan that best fits your needs.
In this article, we’ll cover everything you need to know about used car warranties. This includes common plans, average costs, where to shop, and more. We’ve also reviewed the best extended car warranty companies and will highlight two of our top picks for drivers looking for used car warranties.
An extended car warranty refers to mechanical breakdown coverage offered by a vehicle manufacturer. However, this term is often mistakenly used to describe coverage from third-party companies. Independent providers offer similar protection through vehicle service contracts, but we’ve used the terms interchangeably in this article for convenience.
What Is A Used Car Warranty?
A used car warranty is a service contract designed to cover specific repair costs for a used vehicle. You can find used car warranties from manufacturers, used car dealerships, and third-party companies. This kind of warranty comes into effect when the factory bumper-to-bumper warranty expires on a vehicle.
There are multiple ways to get a used car warranty. Say you purchased a used car that still has factory bumper-to-bumper coverage, you can often get an extended car warranty from the manufacturer by simply going to a dealership. But if the car is outside of the factory warranty, you likely can only get coverage from third-party providers.
What Does A Used Car Warranty Cover?
Used car warranties cover mechanical breakdowns. They don’t cover cosmetic issues or normal wear and tear. Used car warranties come in two broad varieties:
- Exclusionary coverage: This type of extended warranty is similar to a factory warranty because it covers any mechanical breakdown except for a list of exclusions.
- Stated-component coverage: This type of plan only covers the exact parts written down on the contract. There can be a huge variety within this category. One plan might just cover the engine, transmission, and drive axle, while another plan might cover those systems plus the steering, brakes, electrical, and air conditioning.
Common Plans
As you shop around for a used car extended warranty, you’ll see a few common plans from different companies.
Bumper-To-Bumper
A bumper-to-bumper extended warranty is an exclusionary contract. It’s the highest level of coverage and covers almost any mechanical breakdown. It also comes under a variety of names. Here are a few examples from auto manufacturers and third-party companies:
- Platinum Protection Plan (GMC, Cadillac, Chevrolet, Buick)
- Maximum Care (Dodge, Jeep, Ram, Chrysler)
- Toyota Platinum Protection Vehicle Service Agreement
- Carchex Titanium
- Endurance Supreme
- CarShield Diamond
- Olive® Complete Care
Powertrain Plus
This mid-level type of contract can cover most major systems of the vehicle–including the powertrain (engine, transmission, and drive axle). It’s often the Gold level of coverage below Platinum. Most manufacturers offer at least one plan like the powertrain plus, while third-party companies might offer two or three at this level.
A high-level powertrain plus plan would cover:
- Engine
- Transmission
- Drivetrain
- Cooling system
- A/C
- Steering
- Brakes
- Fuel system
- Electrical system
Powertrain
With a powertrain warranty, you’re getting basic coverage for the crucial systems that propel your car forward. An engine or transmission breakdown can lead to expensive repair bills. These plans may be called Bronze, Basic, or simply Powertrain Care. Here’s what they cover:
- Engine
- Transmission
- Drive axle
Some plans cover turbochargers and hybrid drive components, as well.
Maintenance Coverage
There are extended warranties that cover routine maintenance, as well. For example, Endurance’s Advantage plan covers oil changes, tire rotations, and one-time services like brake pad replacement and cooling system maintenance. However, maintenance coverage is not a standard part of an extended car warranty plan.
Added Benefits
Almost all extended warranty companies offer roadside assistance, rental car reimbursement, and trip interruption with each coverage option. But that’s not always the case. One of the cheapest used car warranty companies, Olive®, doesn’t include roadside assistance on its plans.
- Roadside assistance: May cover tows, battery jump-starts, spare tire installations, lockout assistance, and fuel and fluid deliveries.
- Rental car reimbursement: Covers the cost of a rental car (up to a specified limit) during a covered claim.
- Trip interruption: Covers the cost of food and lodging (up to a limit) in the case of a covered breakdown over 100 miles from home.
What A Used Car Warranty Doesn’t Cover
Just because a plan says it covers the transmission doesn’t mean all types of damage to the transmission are covered. This is one of the most important things to understand about a used car warranty. For example, if the transmission is damaged as a result of a non-covered part failing, that damage wouldn’t be covered.
Below are a few common exclusions from extended car warranties:
- Damage from lack of maintenance
- Accident and environmental damage
- Cosmetic damage or general deterioration
- Regular maintenance services
- Normal wear and tear
- Parts that are expected to wear out like brake pads
- Any repair without prior authorization
- Aftermarket modifications
How Used Car Warranties Work
In the case of a breakdown, follow these steps:
- Get your car safely off the road.
- Call your warranty company to find a mechanic in your network (your company might require you to go to a dealership or to any licensed repair facility).
- Take the car to the repair shop (have it towed if it’s unsafe to drive).
- Authorize the mechanic to diagnose the issue and perform a teardown, if necessary.
- Have the mechanic call the warranty company to see if the repair is covered.
- The shop will perform the repair.
- If the repair is covered, you’ll pay the deductible to the repair shop.
Since warranties exclude repairs done without authorization, it’s important to connect the repair shop with the warranty provider before any repairs are made. Also, be aware that the warranty company won’t cover the teardown cost if the breakdown isn’t covered.
Payments For Repairs
Some warranty companies will pay the repair shop directly, while others will expect you to pay upfront and they’ll reimburse you later. When shopping for a used car warranty, stay informed on how each warranty company you’re looking at expects payments for repairs to be made, and whether you’d be comfortable temporarily paying for repairs out of pocket and getting reimbursed later.
Do You Need A Used Car Warranty?
Your used car warranty options change whether you’re shopping for a car or have already purchased the vehicle and are just shopping for a warranty.
Do You Need To Get A Warranty When Buying A Used Car?
If you’re shopping for a used car, it’s important to know what warranty coverage comes on the vehicle. The Federal Trade Commission (FTC) requires all cars to display a buyer’s guide that details things like the price, mileage, vehicle identification number (VIN), and whether or not the vehicle comes with a warranty. Online dealerships and car selling websites should also supply the same type of information.
Find Out When The Factory Warranty Expires
If the car is a recent model year, the buyer’s guide will say when the factory warranty expires. For the most part, factory warranties apply to secondary buyers except in the cases of Hyundai, Genesis, Kia, and Mitsubishi. These brands offer a 10-year/100,000-mile powertrain warranty for original owners. This is reduced to 5 years/60,000 miles for secondary buyers.
The dealership should also let you know if the car comes with a certified pre-owned (CPO) warranty. Under manufacturer CPO programs, vehicles undergo an extensive inspection process and receive longer factory warranties.
It’s common for the used car you’re shopping for to not have a warranty at all. In this case, the buyer’s guide will say the car is being sold as is, without warranties.
If your car is within the factory warranty period, you can usually get an extended warranty from the manufacturer. If not, a third-party plan is your only option.
Do You Need To Add A Warranty To The Car You Own?
Let’s say you already have a car and just want to know if you need to have a warranty. Check the owner’s manual for information on the factory warranty. Even if you bought your car on the used market, you might still have factory coverage.
Don’t Overlap Coverage
It’s not a good idea to purchase a third-party plan until your factory bumper-to-bumper warranty runs out. This is because extended coverage will run concurrently with any factory coverage. Your coverage will overlap and you won’t get the full value of the third-party warranty until your factory warranty has expired.
What To Get After The Factory Warranty Expires
Now, if your car doesn’t have any warranty coverage left, you usually can’t get manufacturer extended coverage anymore. Only some automakers, like Volkswagen, allow car owners to buy extended plans after the new vehicle factory warranty has expired.
That said, you still have many options from third-party companies. Providers like Endurance, Carchex, and Olive offer vehicle service contracts with a wide range of options. It’s up to you to decide if the coverage is worth it.
How Much Does A Used Car Warranty Cost?
A used car warranty can cost anywhere from $1,000 to $4,000 or more depending on how you get it. Coverage from manufacturers is often more expensive per year than coverage from third-party providers. That’s not always the case, so it’s worth comparing options from your dealer with third-party companies.
Below are example quotes we received from third-party providers. On average, across all the following companies, monthly payments are about $109, and coverage costs are estimated to be about $977 per year.
| Company | Plan | Vehicle | Term | Cost |
|---|---|---|---|---|
| Endurance | Supreme | 2018 Ford Explorer | 4 years/
101,000 miles | $156
for 28 months |
| Carchex | Titanium | 2018 Ford Explorer | Unlimited | $140
month to month |
| CarShield | Diamond | 2018 Ford Explorer | Unlimited | $140
month to month |
| autopom! | Exclusionary | 2018 Ford Explorer | 5 years/
unlimited miles | $116
for 24 months |
| Concord
Auto Protect | Premium | 2018 Ford Explorer | 5 years/
75,000 miles | $85
for 24 months |
| Olive | Complete Care | 2017 Honda CR-V | 3 years/
185,000 miles | $29
for 36 months |
| Omega
Auto Care | New Exclusionary | 2017 Ford Explorer | 5 years/
75,000 miles | $127
for 24 months |
| Toco | Orange | 2018 Ford Explorer | Unlimited time/
100,000 miles | $85
month to month |
Be aware that some companies charge a down payment upfront to begin coverage. This might be one monthly payment or it could be more. Companies also offer multiple payment options including the option to pay for the plan in full. You may be able to save a bit of money on the total cost by doing this.
Is A Used Car Warranty Worth It?
A used car warranty can be worth it if you have a car model from an automaker brand that’s more likely to break down, or if you’re not comfortable paying for repairs or part replacements completely out of pocket. Used cars already have years and miles on them, which make them statistically more likely to suffer mechanical issues somewhere down the line.
Deciding if a used car warranty is worth it for you depends on a few factors related to you and your car, such as:
Budget And Repair Costs
If you don’t have much room in your budget to cover unexpected repairs, an extended warranty might be a good idea. You’ll have one monthly payment and peace of mind that expensive repairs will be covered.
Different brands have different average repair costs. On average, you can expect to pay much more in maintenance and repairs for an Audi than a Honda. Use resources like RepairPal or Edmunds to estimate your vehicle’s estimated repairs cost.
Car Reliability
Sources like RepairPal and J.D. Power can better inform you about your car’s reliability–or in other words, how likely it is that your car’s particular brand and model will suffer a mechanical breakdown. If your car brand is further down the list of rankings in vehicle reliability from one of these sources, a used car warranty may be a good option.
What To Look For In An Extended Warranty
As you shop around, look for the following things to see what value the used car warranty provides:
- Mileage limit: A higher mileage limit gives you more room to enjoy the car knowing vehicle repairs are covered.
- Money-back guarantee: Most third-party companies offer 30-day money-back guarantees so you have time to change your mind. Be sure to look at the cancellation procedure, though, as some require a notarized odometer statement.
- Added benefits: See if the plan offers roadside assistance, trip interruption coverage, rental car coverage, and other benefits.
- Repair network: Read the contract or ask a sales representative what repair shops can perform covered repairs.
- Deductible: A higher deductible can lower the plan costs but you’ll pay more out of pocket for a claim.
Used Car Warranty: Our Take
Getting a warranty on a used car can be a good idea depending on your situation and vehicle. Our recommendation is to compare multiple options to see where you can get the best coverage for your budget. Always read the fine print to understand each coverage plan.
Best Used Car Warranty Companies
We’ve reviewed the best extended warranty providers in the industry and ranked our top picks based on cost, coverage, reputation, transparency, and customer service. We recommend checking out extended auto warranties from Carchex and Endurance for used cars.
Carchex: Best For Used Cars
Carchex is our top choice for the best used car warranty because it can cover up to 250,000 miles and offers good rates for coverage. The company is a good option for high-mileage vehicles that no longer have factory coverage. Carchex offers five vehicle warranty plans that span basic powertrain coverage to factory-level comprehensive coverage. It also has a plan designed to enhance an existing powertrain warranty.
Carchex has an A+ rating with accreditation from the Better Business Bureau (BBB) and has been in business since 1999. Its strong reputation makes it one of the best car warranty companies out there.
Read more: Carchex review
Endurance: Best Coverage
Endurance is our first recommendation in terms of coverage. The company offers six plans, including its Supreme plan, which is like a new car manufacturer’s warranty. It also offers a maintenance plan, called Advantage™, that covers many routine services that warranties don’t normally cover. Endurance can cover up to 200,000 miles, which makes it a good extended warranty for cars over 100,000 miles.
Both Endurance and Carchex offer plans in California, which isn’t the case for other car insurance companies. In California, vehicle protection plans are called mechanical breakdown insurance.
Read more: Endurance Warranty review
Compare: Carchex vs. Endurance
Used Car Warranties: FAQ
Below are a few frequently asked questions about used car warranties.
Are used car warranties worth it?
A used car warranty can be worth it if you want peace of mind for car repairs and you don’t have a sizable savings account to cover unexpected breakdown costs. Consider your car’s expected repair costs to see if the price is worth it.
Who has the best warranty on used cars?
We recommend Carchex for the best warranty on used cars. It offers coverage up to 250,000 miles and has a wide range of plans. Carchex also includes rental car coverage, trip interruption, and roadside assistance on all plans.
Who has the cheapest and best used car warranty?
Olive has the cheapest used car warranty that can cover up to 185,000 miles. It offers three plans, but the Powertrain and Powertrain Plus are the best affordable options for used cars.
How much should an extended warranty cost?
Our quote data shows extended warranties cost about $977 per year of coverage. If you pay less than this, you’re getting a good deal on an extended warranty.
How We Rate Car Warranty Companies
Our review team extensively researches extended car warranty providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:
- Reliability: Warranty providers that earn strong ratings from the Better Business Bureau (BBB), work with reliable partners and administrators, and have a long history in the warranty industry score well in this category.
- Coverage Plans: We take a close look at the coverage plans available through each provider, including how many are offered, maximum term limits, plan exclusions, and more. We also evaluate the added benefits companies include with their warranty plans, such as roadside assistance and trip interruption benefits.
- Pricing: Our team performs a secret shopper analysis for a variety of vehicles and coverage plans to get a sense of a provider’s average costs. We see how each company’s pricing, deductible options, and discount opportunities compare to competitors when determining this score.
- Transparency: We evaluate the availability and transparency of each company’s contracts, as well as whether each provider offers a money-back guarantee.
- Customer Experience: We consider customer reviews and complaints from sites like the BBB and Trustpilot. Our team also reaches out to customer service reps during our secret shopper analysis to get a sense of the customer experience with each company.
*Data accurate at time of publication.
