Used Car Warranties: What You Should Know (2024)

Partner content: This content was created by a business partner of Dow Jones, independent of the MarketWatch newsroom. Links in this article may result in us earning a commission. Learn More

A used car warranty takes care of certain repair costs related to mechanical breakdowns caused by defective parts and workmanship on older vehicles Electric Vehicle

Used Car Warranties: What You Should Know (2024)

Find the best car warranty by comparing plans from Endurance.

Alex Carver is a writer and researcher based in Charlotte, N.C. A contributor to major news websites such as Automoblog and USA Today, she’s written content in sectors such as insurance, warranties, shipping, real estate and more.

Rashawn Mitchner is a MarketWatch Guides team editor with over 10 years of experience covering personal finance and insurance topics.

A used car warranty can cover the cost of repairs that keep your aging vehicle in running condition — avoiding having to buy a replacement at elevated prices. The cost of new vehicles in the U.S. has increased by 21.1% since the beginning of 2020, according to the latest consumer price index (CPI) data from the Bureau of Labor Statistics. The cost of used cars, meanwhile, has increased by 31% over the same period.

In this article, we at the MarketWatch Guides team will explain what a used car warranty is and how coverage plans work. We’ll also explain what a used vehicle warranty covers, when is and isn’t the best time to get an extended warranty and share quotes from some of the best extended car warranty companies.

View Plans For Our #1 Provider – Endurance

Why You Can Trust the MarketWatch Guides Team

Learn more about our methodology and editorial guidelines.

A used car warranty is exactly what you’d imagine: long-term coverage for used vehicles. Used car warranty plans come in various forms, from third-party factory warranty extensions to certified pre-owned (CPO) warranties offered by car dealerships. No matter where you purchase from, a used car warranty should cover a predetermined set of vehicle parts outlined in the contract. If your car breaks down, most warranties allow you to take it to a dealership or any repair shop certified by the National Institute for Automotive Service Excellence (ASE®). If your vehicle repairs are covered, your provider or administrator will pay the repair facility directly or send you a reimbursement check — minus the deductible.

When it comes to used car warranties, certain things can be confusing. This is especially true in cases where a used car is still covered by a manufacturer or dealer warranty. The section below will provide information on deciding if buying a used car warranty is worth it.

This section will explore some things worth knowing about extended car warranties.

Most warranty information about used cars can be in a “Buyers Guide.” Dealerships are required by the Federal Trade Commission (FTC) to display this information for all its cars — usually on the front window.

The Buyers Guide will say whether the vehicle comes with a warranty or if it’s being sold as-is. Purchasing a car in as-is condition means that if you run into any issues or the vehicle needs repairs, you’ll have to do so out of pocket.

On the other hand, if your vehicle comes with the original warranty or extended coverage, the Buyers Guide should have all the information you need. This includes the parts that are or are not covered in your contract.

Some states have restrictions or rules on what vehicles can be sold in as-is condition. Below are all of the states where lemon laws apply to used vehicles. Be aware that in some states the requirements are extremely limited for used vehicles so be sure to contact your attorney general’s office to find out what rules and regulations apply in your state.

*Missouri and Mississippi have other regulations outside of lemon laws that — in certain circumstances — protect drivers of used cars.

The following states’ lemon laws do not apply to used vehicles:

When you purchase a used vehicle, there’s a chance that the initial factory warranty from the automaker still applies. You can likely find this information under the “systems covered/duration” section of the Buyers Guide.

To get full use of the initial manufacturer warranty, you’ll want to know what the plan covers and whether it’s transferable. Ask the dealership, where you purchased your used vehicle, for all warranty documents. Once you know what’s covered under the factory warranty and for how long, you can contact your vehicle’s manufacturer to ensure the information is accurate.

Most initial factory warranties last for three years or 36,000 miles, while some powertrain warranties can last up to 10 years or 100,000 miles, depending on the manufacturer.

If your used vehicle comes with a warranty, coverage may be limited. Your warranty booklet can provide specifics on the used car warranty and explain who is responsible for repairs. Remember to review all fine print in your contract to find out which components may be excluded from coverage and ensure all your questions are answered.

You’ll also want to know who exactly is backing your used car warranty, since some dealerships sell contracts from third-party warranty companies. You can research policies and company reputations on consumer sites like the Better Business Bureau (BBB), Trustpilot and Google Reviews.

If your vehicle does not have a used car warranty, there are alternatives to purchasing one. These include:

Used car warranty plans for older vehicles are often worth the cost for drivers, as they can protect you from unexpected and expensive car repair costs. Because of age, used cars are typically at an increased risk for mechanical issues than newer vehicles.

A warranty allows you to manage that risk and cover the cost of repairs, helping extend the life of your vehicle. While this is one of the main values of an extended car warranty, the current state of new and used car prices makes one even more worth it for many car owners.

The cost of new and used cars has gone up significantly over the past four years, making it even more expensive to replace your vehicle instead of repair it. The current Consumer Price Index (CPI) for new cars is 21.1% higher and is 31% higher for used cars compared to four years ago.

Getting warranty coverage for your used car can give you peace of mind that, after a possible breakdown, you won’t be responsible to foot the bill for inflated prices on repairs.

There are a few things worth considering as you’re deciding whether or not you should purchase an extended warranty on a used car:

We spent time purchasing car warranties to try out coverage for ourselves. While it’s difficult to predict when you’ll need a vehicle repair, our warranty buying experience was quick and straightforward with each provider we tried. Representatives we worked with at Endurance, CarShield, autopom! and Carchex were friendly and prompt, and we were offered various discounts depending on the provider.

In May 2024, we polled drivers to get insight into consumer extended car warranty experiences. Out of 1,000 extended warranty customers, 96% said they were satisfied with their warranty coverage. Many left direct feedback about the peace of mind that came with not needing to pay out of pocket for serious repairs. Companies like Endurance and CarShield received praise for excellent customer service and, of those who needed to file a claim, 98% said their claim was approved.

Most companies and manufacturers offer a variety of used car warranty plans that range from comprehensive to bumper-to-bumper coverage and down to basic powertrain plans. Before you opt for a used car warranty, it’s important to decide what level of coverage best fits your needs and budget.

Nearly every warranty excludes regular maintenance needs like tire rotations and oil changes as well as coverage for wear and tear components. You won’t receive protection for damages due to accidents or severe weather either, as that’s the responsibility of your car insurance provider.

Most used car warranty companies offer a few different types of extended warranty plans. These include:

Cost is a significant factor in considering whether you should buy an extended warranty on a used car. Some companies offer lower monthly payments than others, and some offer lower total costs than others. Are you looking to keep a tight monthly budget or get the best value overall?

To give you a better idea of how much a used car warranty costs, we got quotes from five of the top warranty companies. Each quote is for a 2016 Toyota Tacoma with 100,000 miles on it and a deductible of $100 to $250. According to Kelley Blue Book, The Toyota Tacoma is rated the Best Midsize Truck of 2024, occasionally coming in second for the past eight years. Coverage levels range from mid-tier powertrain coverage to bumper-to-bumper warranties.

Remember, the company that’s best for our 2016 Toyota Tacoma may not be an indication of the company that is best for your vehicle. We always recommend gathering your own quotes from at least three different providers.

*Costs reflect quotes received as of May 2024

Depending on the condition of your used car, it may be eligible for more comprehensive coverage options from different providers. You may even qualify for a bumper-to-bumper warranty , which is the highest level of coverage available.

The vehicle’s age, mileage, make and model are just some factors companies evaluate to determine the cost of an extended car warranty for a used car. The graphic below shows the six key factors that contribute to the price of coverage. In the list that follows, you’ll find a brief explanation of these factors.

If your used car is covered under warranty and breaks down, you’ll want to take it to a repair shop for diagnosis. In most cases, your plan or contract administrator will pay the repair shop directly, minus your deductible. However, only the components and parts that are covered under warranty will be paid for.

At the dealership, the Buyers Guide will let you know whether or not a used vehicle has a warranty. If a used car currently has some of the factory warranty left, you don’t need to buy a warranty right away.

Some dealers offer their own free warranties that are usually short and last a few months or less. This is really just a small perk that shows the dealer will take responsibility for any problems that come up soon after your purchase.

Many states have strict contingencies when it comes to lemon laws on used cars. For example, in Arizona, your used car is only covered if a major car part breaks before 15 days or 500 miles after purchase — whichever comes first. Some states have looser rules, like Massachusetts, where you can get completely refunded for your used car if it’s under 125,000 miles and there’s a significant defect that threatens your driving ability or your safety.

California, Connecticut, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico and New York have robust lemon laws for used cars. These laws essentially require used cars to come with a warranty depending on the condition of the car. The dealership must repair any problems the vehicle presents for a specified period of time. If the dealer keeps trying to fix recurring problems and nothing improves, the dealer is required to give you a new vehicle or refund you.

Whether or not a used car will have a 30-day warranty depends on the state where you live and where you purchased your car. In the U.S., there are no protections at the federal level requiring a 30-day warranty on a used car.

There are various types of used car warranties that could be listed on the vehicle when you purchase it. These include “as-is,” “warranty of merchantability” (where the vehicle is running like it is supposed to), “warranty of fitness” (meaning it is safe to sell) and the factory warranty still being applied on the vehicle.

In addition, some states have a grace period where you can change your mind and return the vehicle, but this is not required under federal law. We recommend checking with your dealership for their particular policy on returns and service after the purchase.

In most cases, the vehicle protection provided by a warranty on used vehicles can be transferred. You will need to contact the dealership or warranty company that you received your warranty contract from and let them know that you sold your car or that you transferred the warranty within the first 30 days of owning the vehicle.

In addition, most used car warranty companies will allow you to cancel your warranty coverage within the first 30 days. If you paid the full amount for your plan up front, you should receive the entire amount back and if you only placed a down payment you should receive it back.

A used car warranty covers the cost of certain vehicle repairs and replacements after a mechanical breakdown. As with warranties for newer vehicles, there are many different types of coverage plans to choose from. Some used cars come with a factory warranty, but models that are sold as-is may benefit from an extended coverage plan.

When looking for the market’s best used car warranty companies , it’s smart to compare quotes and warranty options from a few coverage providers. We’ve thoroughly researched the industry’s top extended auto warranty companies, and we rate Endurance and Carchex as two of the leading options.

Endurance offers six levels of coverage that last an unlimited number of miles. Each plan comes with added benefits like roadside assistance, towing services and rental car coverage.

When you purchase an Endurance vehicle service contract, you’ll receive one free year of Endurance Elite Benefits. This package is designed to provide you with peace of mind by offering perks like key fob replacement and total loss replacement.