When purchasing a used car, you want to make sure it’s protected against any type of malfunction or breakdown. The following is our list of the six best used car warranty companies, along with the types of service plans and levels of coverage each offers for used vehicles.
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Top Picks for Used Car Warranties of 2021
Best Used Car Warranty Reviews
CarShield has been in business since 2005, providing extended used car warranties for previously owned vehicles, as well as motorcycles and ATVs. CarShield offers different levels of coverage, with five distinct warranties:
With an A+ rating from the Better Business Bureau (BBB), Omega Auto Care has been providing used car warranties for over two decades. The company offers three coverage options:
At the moment, CarShield has an alert on the Better Business Bureau website because of a pattern of complaints. The BBB “alerts consumers to use caution if considering doing business with CarShield” due to misleading sales and advertising practices, among other complaints.
One of the newest companies to enter the extended car warranty market, Olive focuses on delivering technology-forward service to car owners who choose its service plans. It offers three coverage options:
A national provider of extended and used car warranties, Endurance offers six different service plans, each one designed for specific auto needs and price ranges. The six types of used car warranties are:
Protect My Car is an extended car warranty company that services car owners across the U.S. through its three different vehicle service contracts. These are:
Although CARCHEX is not a direct used car warranty provider, it does connect car owners to independent vehicle service contract companies that offer extended warranties.
Used car warranties offered by CARCHEX are divided into the following five coverage levels:
Used Car Warranty Guide
What is a used car warranty?
A used car warranty is an extended vehicle service contract that provides coverage for repairs on previously owned automobiles in the United States (except in California, which offers mechanical breakdown insurance, or MBI).
Every new car sold at a dealership comes equipped with a manufacturer’s warranty for a specified amount of time. If you buy a used car, it might still be covered by the original warranty for the remaining period you own it. Nonetheless, some manufacturer’s warranties might not be transferable, and most used cars are past the point of having an active factory warranty.
Since used cars do not necessarily include any protection plans when purchased, an extended car warranty can come to the rescue and help pay for repair costs.
Extended car warranties should not be confused with car insurance, which covers damage to your car due to collisions, accidents, theft, or environmental factors. Even the best car insurance does not consider the types of breakdowns or system failures that an extended car warranty covers.
What is the difference between the manufacturer extended warranty and third party warranty?
The manufacturer’s warranty, or factory warranty, provides protection for new cars or certified pre-owned (CPO) cars sold by a dealership. The length of the factory warranty lasts a predetermined number of years or miles, whichever comes first, and will depend on the car’s manufacturer and on the type of warranty coverage.
For example, Honda offers a bumper-to-bumper warranty that covers your vehicle for three years or 36,000 miles and a powertrain warranty that covers it for five years or 60,000 miles, which are fairly common numbers for the major car manufacturers.
On the other hand, a third-party extended car warranty (such as a used car warranty) is not provided by the manufacturer but by an independent company. It provides coverage for your car after the original warranty runs out and works much the same way, offering protection against major breakdowns or malfunctions, with listed exclusions. When choosing the best extended car warranty, car owners would normally compare the coverage options to those of a manufacturer’s warranty.
How does a used car warranty work?
Car owners choose a type of warranty, from basic powertrain to more comprehensive bumper-to-bumper coverage, and pay a monthly, quarterly, or yearly premium. After an initial waiting period, usually 30 days, customers can file claims if needed.
Whenever your car requires servicing, the procedure to go about repairing it will depend on the extended warranty provider. Some companies might allow the customer to take their vehicle to any licensed repair shop, while others require the vehicle to be serviced only in select garages.
Many warranty providers must provide authorization before any work starts on your vehicle, while others allow you to pay for the repairs and then fill out a claim for reimbursement.
Once the claim is submitted, the used car warranty company will evaluate it and determine how much of the repair is covered under the established warranty contract. Companies take into consideration the parts used, exclusions, and deductibles before reimbursing any amount of money.
Many used car warranty companies offer membership benefits in addition to the coverage. Perks such as roadside assistance, towing, trip interruption, or rental car reimbursement are just some of the ways that a used-vehicle service contract provider can give your coverage extra value.
What does a used car warranty cover?
Used car warranties help you cover costs associated with mechanical breakdowns and failures of your vehicle’s parts and systems. Basic coverage generally includes engine, transmission, and drive axle parts, while more comprehensive warranties cover repair costs for pricier parts such as those for suspensions, air conditioning, high-tech components, and electrical systems.
Typically, used car warranties do not cover parts from regular wear-and-tear, such as brake pad replacements or routine maintenance services such as oil changes. It will not cover car alterations or modifications, nor will it provide for repair costs due to damage caused by neglect or recklessness.
Types of used car warranties
There are several types of used car warranties, from basic to comprehensive and even specialty coverage options. The best used car warranty companies offer service plans with several levels of coverage that cater to any car owner’s needs. Among the most common types of used car warranties are:
Bumper to Bumper Warranty
Sometimes known as a comprehensive coverage warranty or exclusionary warranty, it covers all the major systems of an automobile with listed exceptions. Although the name bumper-to-bumper would imply total coverage for your used car, it's important to check the exclusions listed in the contract.
The most common extended car warranty, the powertrain generally covers the main systems that generate movement for the car: the engine, drive axles, and transmission. Many used car warranty companies also offer expanded powertrain warranties that include other major car systems.
A more limited warranty compared to the powertrain, it provides coverage for movement-producing parts except the engine. When it comes to levels of coverage, the drivetrain warranty offers the least amount of protection but also the most affordable prices.
Just as the name implies, this type of warranty provides coverage for rust damage to your car, whether it be from exposure due to an accident or from natural elements such as water or salt.
The wrap warranty is exclusively for used cars whose factory bumper-to-bumper warranty has expired while the factory powertrain warranty is still active. The wrap warranty fills in the gap of the original bumper-to-bumper until the factory powertrain coverage expires as well.
How much do used car warranties cost?
Establishing a general range of how much a used car warranty costs is an exercise in futility. According to the Federal Trade Commission (FTC), extended warranties such as these can range anywhere from hundreds to several thousand dollars depending on the term length of the service contract, the type of coverage it offers, and a whole host of other factors.
Among the factors that will influence the premium costs for used car warranties are:
It’s important for consumers to understand how much they should pay to receive the best coverage for their situation. Overpaying for protection you already have is a waste of money. However, just like with cheap car insurance, underpaying for coverage can leave you exposed to expensive repairs.
Are used car warranties worth it?
As with any type of extended warranty plan, it will all come down to one simple question: Is the cost of the used car warranty more than what it would cost to repair the vehicle out of pocket? The answer, of course, is that it will depend on each individual car owner’s needs.
Generally speaking, the most common repairs for used cars are simple fixes such as battery replacement, which would be cheaper to take care of directly than by paying a deductible. For circumstances such as these, a used car warranty is not worth your money.
However, major breakdowns, such as a blown transmission, are expensive to repair. An extended car warranty could pick up a hefty amount of the repair costs, if the parts are covered, saving you a ton of money in the process.
Furthermore, the extended car warranty industry has developed a reputation of being aggressive in its sales tactics and of offering more (and charging more) than what the customer actually needs. Customers even report receiving “Final Warranty Notice” calls when they don’t even own an extended warranty with the company calling. The FTC warns against these car warranty calls and urges car owners to be “especially cautious” so as to not fall victim.
How to choose the best used car warranty company
If you’re searching for the best used car warranty you’ve probably already checked whether your used car’s original factory warranty has lapsed. Don’t automatically assume that since it’s not a new car it no longer has an active manufacturer’s warranty.
If that’s the case, the most important thing you can do when choosing the best used car warranty for your vehicle is to shop around. You should consider how to choose the best used car warranty company in much the same way you would learn how to buy car insurance. Just like with insurance companies, no two extended car warranty companies are the same, though they all tend to offer similar types of coverage levels.
Some might be geared towards high-mileage vehicles, offering service contracts to cars with more than 100,000 miles, while others might have a mile limit. Others might be more transparent about exclusions in coverage.
Another important part of shopping around is to ask for quotes from different warranty companies. Unfortunately, extended car warranty companies do not offer a resource, such as an insurance comparison tool, that helps you determine which provider is best for you.
Also remember that, since there is no set standard for pricing, car owners can negotiate the price of their used car warranty with the provider.
Used Car Warranty FAQs
How much is an extended warranty on a used car?
Many factors go into determining the premiums of an extended warranty on a used car. Total costs can run anywhere from several hundred to several thousand dollars depending on your used car's make and model, as well as its age and mileage. The type of warranty, its term length, and the deductible amount chosen will also factor in the ultimate warranty cost. Warranty providers might also offer the car owner the option to enter into payment plans where customers can decide whether they want a monthly payment, yearly payment, some other specified time frame, or even pay the whole term upfront.
How to get a warranty on a used car?
Once a car’s factory warranty has expired, customers can purchase an extended car warranty to help cover certain repair costs. Car owners can view a vehicle service contract provider’s car warranty plans and choose the type of warranty and level of coverage that best serves their purpose.
Customers should request quotes or estimates from the warranty providers to understand the total costs they might incur. Used car owners are also encouraged to read through the list of coverage inclusions and exclusions to make sure they are covered for the things they actually need.
What does a used car warranty cover?
Used car warranties cover repairs to the vehicle’s parts and systems, mainly engine and transmission. Other more comprehensive warranty types (such as bumper-to-bumper warranties) cover additional car systems. Many warranties include a list of exclusions, that is, repairs that are not covered under the contract. However, used car warranties do not cover repairs associated with normal wear-and-tear, nor do they cover regular maintenance.
What is a factory warranty on a used car?
Factory warranties are offered by the manufacturer for every new car. Unless voided, the warranties last for a fixed number of years or until a mileage limit is reached, whichever comes first. When purchasing a used car, the factory warranty might still be valid, making the need for an extended auto warranty unnecessary until the original expires.
How We Found the Best Used Car Warranty
We looked at several factors in our quest to determine the best used car warranty companies. Among them:
Product offerings: Most vehicle service contract providers offer the same types of used car warranties. We looked at the levels of coverage available to the consumer, with emphasis on companies that offered a more varied selection of plan options such as high-mileage vehicle coverage or high-tech systems coverage.
Repair shop options: When a used car needs a repair, it helps to be able to have the freedom of choice to take it to any licensed mechanic. While some used car warranty companies might restrict a car owner’s options to a specific provider network, we preferred companies that allowed customers to pick the repair facility of their choice.
Ease of claims process and speed of reimbursement: There is nothing more frustrating than having to go through a lengthy and complicated process of filing claims and then having to wait an eternity to have the company pay out your repair bills. We highlight companies that have more streamlined procedures and can get you the money quicker.
Key Takeaways for Best Used Car Warranty
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