Are Used Car Extended Warranties Insured? How to Find Out and Should You Buy one for Your Car

What is an Extended Warranty for Cars?

An extended warranty for cars is an insurance policy that covers the repair or replacement costs of car problems with a flat-fee deductible. Extended warranties are offered by both manufacturers and third parties and come in several different options such as bumper to bumper, powertrain/drivetrain, and corrosion/rust warranties. Bumper to bumper warranties typically cover defects and repairs, but do not cover scheduled maintenance like replacing wiper blades and getting oil changes. Powertrain/drivetrain warranties cover the engine, transmission, differential and other mechanical aspects of the car and can extend coverage to 100,000 miles or 10 years and sometimes beyond. Corrosion/rust warranties are usually offered with new or certified pre-owned vehicles as a protection for the paint job on the car. Extended warranties can be purchased at the dealership when buying a new car or post purchase as an aftermarket offering and will cost extra.

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What are the Benefits of Having an Extended Warranty for Used Cars?

1. Coverage of Major Parts and Systems of the Car

An extended warranty for used cars can cover a variety of parts and systems, including the main power system, engine and transmission, electrical components, heating and cooling, safety features, high-tech parts, emission systems, and hybrid batteries. The coverage depends on the plan chosen, with basic plans covering the major components that move the vehicle, such as the engine and transmission, and more comprehensive bumper-to-bumper warranties covering all of the vehicle’s major systems. Some warranties may also include items such as steering system, exhaust systems, alternators, manifolds, and pumps. However, most used car warranties exclude exterior body damage, damage caused by misuse, pre-existing mechanical issues, routine maintenance, interior cosmetic damage, environmental damage, and damage from modifications or aftermarket accessories.

2. Reduced Cost Compared to Repair Costs

Having an extended warranty for used cars can help reduce costs for car owners compared to repair costs. Similar to an extended warranty, car repair insurance covers mechanical breakdowns and repairs that car insurance doesn’t pay for, but for a lower cost than an extended warranty. An extended car warranty can provide peace of mind on the road after your factory warranty expires and as long as you understand the deductible and claim rules, it can be more cost-effective than paying for repairs out of pocket. However, for some car owners, it may make more sense to pay for repairs outright. The cost-effectiveness of an extended car warranty varies from driver to driver.

On the other hand, there are other options to cover costly car repairs. Vehicle owners can pay for repairs outright, finance repairs over time, or purchase a vehicle service contract. When deciding whether or not to buy an extended warranty, car owners should consider the expected repair costs and long-term reliability of the car, as well as the deductible and claim rules associated with the warranty. Reliable cars may have lower annual repair costs and may not need the protection of a vehicle service contract.

3. Protection Against Unanticipated Mechanical Failures

An extended warranty for used cars provides protection from the costs of unexpected and expensive car repairs. This type of warranty is designed to offer peace of mind and protection from potential repair bills for components such as the engine, electronics and air conditioning systems, and transmission that may be damaged due to normal wear and tear, extreme heat or cold, mechanical defects, or poor maintenance. It can allow you to maintain your car without breaking the bank and can be transferable, cancelable, and accepted by any repair shop. A separate powertrain warranty is also available, which covers the mechanical parts that move the car, and typically lasts several years or several years’ worth of driving.

4. Convenience of One-Stop Shopping for Repairs

Having an extended warranty for used cars can be a great help when it comes to repairs, as it can provide much needed financial protection when a costly repair is needed. With an extended warranty, you can save money on expensive repairs, as the warranty will cover the costs of any repairs that are needed. Additionally, there are multiple plan options to choose from, so you can select the one that best fits your budget and needs. Also, with an extended warranty, you can visit any repair shop, as most reputable MBI/VSC companies allow you to take the car to any certified repair shop. Plus, it’s transferable and cancelable, so it can offer even more flexibility. Furthermore, the simple claim process makes the process simpler and easier, as the service center is paid directly by the warranty company. Finally, having an extended warranty can give you peace of mind, knowing that any necessary repairs will be taken care of without having to worry about the cost.

5. Reduces Stress Due to Uncertainty of Car Repairs

Having an extended warranty for used cars can reduce stress due to the uncertainty of car repairs. With the right warranty, a car owner can maintain their vehicle without fear of unexpected and expensive costs. Knowing the warranty will cover the cost of repairs takes away the financial burden and the stress associated with it. In addition to coverage, many companies, such as olive.com, offer added benefits such as hotel expenses if the car gets stranded while being repaired, allowing car owners to feel more secure. With the peace-of-mind that an extended warranty provides, car owners can worry less about the possibility of costly repairs, and enjoy the benefits of owning a car for many years.

6. Extended Warranties Can Cover Trip Interruption Services

An extended warranty for used cars can cover a variety of trip interruption services, depending on the coverage offered. These services can include:

Towing: If your car breaks down and needs to be towed to a repair shop, the warranty may provide coverage for the towing costs.

Roadside Assistance: If your car needs a jump start or other emergency assistance, the warranty may provide coverage for roadside assistance services.

Rental Car Reimbursement: If your vehicle is being repaired, the extended warranty may provide reimbursement for the cost of renting a vehicle.

Trip Interruption Coverage: If your car needs to be repaired and you’re stranded in a different location, the warranty may provide coverage for lodging, transportation, and meals.

7. Extended Warranties Can Cover Mechanical Failure from Neglect or Misuse

An extended warranty for used cars covers mechanical failures and defects which arise from normal wear and tear, extreme heat or cold, mechanical defects, poor maintenance, and vehicle recalls. The extended warranty may also cover major vehicle systems such as the engine, electronics and air conditioning systems, transmission, and other components. It is important to note that an extended warranty does not cover exterior body damage, damage caused by misuse, pre-existing mechanical issues, routine maintenance, interior cosmetic damage, environmental damage, or damage from modifications or aftermarket accessories.

8. Increased Peace of Mind

Having an extended warranty for used cars can increase peace of mind by providing coverage for costly repairs and providing customizable options that fit a customer’s needs. An extended warranty can be added into an auto loan and paid for over time, making it more affordable. It can also provide peace of mind by giving customers the ability to visit any repair shop and transfer the warranty to a new owner if the car is sold. Furthermore, the warranty is cancelable, so customers don’t have to worry about paying for coverage that is no longer needed. Having an extended warranty for used cars can help car owners rest easy knowing that their vehicles are protected in the event of any unexpected repairs.

9. Access to Professional Advice and Support

Having an extended warranty for used cars can provide professional advice and support in many ways. First, when you purchase an extended warranty, you can request a quote and all the coverage details via email so you can make the best decision to meet your specific needs. This allows you to compare different plans side-by-side to find the one that works best for you. Additionally, many providers include roadside assistance in their plans, so you have the peace of mind of knowing that help is just a phone call away if you ever find yourself stranded on the side of the road. Furthermore, many providers have great customer service, with ratings of 4.9 or above on Google, so you can rest assured that you’re getting professional advice and support. Finally, extended warranties may even save you money on costly repairs in the long run, as they provide coverage for parts and repairs that would otherwise be out-of-pocket expenses. All in all, an extended car warranty can provide a great deal of professional advice and support.

10. Warranty Coverage for New and Used Cars

An extended warranty for used cars offers additional coverage beyond the original factory warranty. It typically covers repair and replacement costs of major vehicle parts until a certain time or mileage. Covered components vary depending on the plan, but usually include the engine, transmission, cooling system, and various electrical parts. Extended warranties are often sold by dealerships or third-party companies, and can last anywhere from one to five years. This type of warranty can be a good idea if you want to own the car for a long time and want peace of mind for covered repairs.

What are the Steps on How to Find out if the Used Car Extended Warranty You are Considering is Insured?

Step 1: Make sure the original warranty is no longer active

Step 1: Check the odometer to determine the car’s mileage. If the mileage exceeds the warranty limit, the car is no longer covered.

Step 2: If the car’s mileage has not exceeded the warranty limit, check the date of purchase. If you don’t know the date of purchase, you can write down the VIN (vehicle identification number) and call any dealership selling that car brand. They will be able to look up the purchase date for you.

Step 3: Ask the dealer for the vehicle’s warranty documents. Read through the documents to understand what type of warranty coverage is offered and what vehicle repairs are excluded.

Step 4: Call the manufacturer to verify the accuracy of the warranty information.

Step 5: Compare all of your warranty options to find the best deal for your situation.

Step 2: Check if the manufacturer’s warranty still applies

To check if a used car is still under a manufacturer’s warranty, you can take a few steps. First, enter the vehicle’s VIN into the manufacturer’s website. This will tell you if the car is still within the warranty period. Second, take note of the car’s year and mileage and compare it to the manufacturer’s warranty terms. Third, check the buyer’s guide which will clearly state whether the vehicle comes with any type of warranty. Fourth, be aware of any verbal warranty promises not included in the buyer’s guide. Finally, if the used car is not under a manufacturer’s warranty, you may want to consider purchasing a used car extended warranty from the dealership or a third-party company.

Step 3: Explore the alternatives such as taking it to a repair shop or checking online reviews

Step 1: Research extended car warranty options that your car dealer may offer. Read through each vehicle service contract carefully to understand what type of coverage is offered and what repairs are excluded.

Step 2: Explore the possibility of leasing a car. Leased cars often include a warranty that may cover repairs, meaning you may not have to worry about major unexpected expenses.

Step 3: Consider setting aside money for repairs. If you can save some cash for repairs, you can use it to cover any costs that may arise in the future.

Step 4: Research online for reliable extended car warranty providers. Check out the provider’s BBB rating and read customer reviews on websites such as Google, Facebook, and more.

Step 5: Make sure to find an auto repair shop that is certified and approved by the warranty provider. This will ensure that you will be covered when you take your car to a repair shop in case something needs to be fixed.

Step 4: Take into consideration the cost and coverage options availabl

When evaluating the cost and coverage options of a used car extended warranty, there are several factors to consider. One important consideration is the coverage level. There are different levels of coverage available and it is important to select a plan that best fits your needs. Additionally, it is important to determine the deductible amount you are comfortable with in order to get the best coverage for your budget. Another factor to consider is the cost of the plan. It is important to shop around and get quotes from multiple used car warranty companies so you can compare prices and find the best plan for you. Lastly, you should also look for companies that provide a range of options so that you can customize your coverage to fit your individual needs.

Step 5: Anticipate paying more if your car has high mileage

Paying more for a car with high mileage can drastically affect your decision about whether or not to purchase an extended warranty for your car. While having a car with higher mileage could mean that you get a good deal on the car, it also means that you are more likely to experience a mechanical breakdown or other car repair in the future. With higher mileage, you will be spending more money to maintain your car and the cost of repairs might exceed the value of the car. Therefore, when considering whether or not to purchase an extended warranty for your car, it’s important to understand the risks associated with higher mileage and factor that into your decision.

Step 6: Shop around for the best deal on extended warranties

How can you find out if the used car extended warranty you are considering is affordable?

  1. Research different used car warranty providers in the marketplace to find the best deal that fits both your needs and your budget.
  2. Speak to at least three different providers to get quotes and compare the coverage options they offer.
  3. See which plans your car is eligible for, and check to see if there are any discounts or negotiable prices available.
  4. Request a quote and all the coverage details from the provider via email.
  5. Compare the costs of different extended car warranties and find the one that gives you the most coverage for the best price.
  6. Make sure the company is a legitimate provider and check that their information matches the company they’re claiming to be.
  7. See if the extended warranty is transferable in case you plan to sell your car in the future.

Step 7: Read the details of warranty coverage

When researching extended warranties for a used car, it is important to check the details of the coverage so you can make the best decision to meet your specific needs. Generally, extended warranties should include coverage for the following items: steering system, electrical components, engine assembly, drivetrain, transmission, exhaust systems, alternators, manifolds, pumps, heating and cooling assembly. Additionally, make sure to look for the company’s policies and BBB rating from the Better Business Bureau to ensure you are getting the best extended car warranty solution. It is also important to negotiate and look for discounts, as well as check to see if the car is eligible for coverage and which plan best fits your needs.

Step 8: Take into consideration the possibility of opting out of roadside assistance and other add-ons

When evaluating a used car extended warranty, you may want to consider opting out of roadside assistance and other add-ons. This can be a great way to keep costs down, while still having the peace of mind of a warranty. Here is a step-by-step guide to help you make an informed decision:

  1. Research what coverage is included in your existing auto insurance policy. Most people already have roadside assistance included in their policy and may not need to opt-in for additional services.
  2. Compare the cost of a warranty with roadside assistance against the cost of adding it to your auto policy. Make sure to note what specific services are covered.
  3. Consider if you are on a pay-as-you-go plan. If so, you may be able to cancel at any time.
  4. Decide if you feel you need the coverage. If you have enough money to pay for unexpected repairs out of pocket, then self-insuring may be the best option.
  5. Finally, make sure you know your cancellation policy. The best extended car warranties, AKA MBIs and VSCs, shouldn’t hold you hostage.

Step 9: Pay attention to the number of years locked in the price

When shopping for an extended car warranty, the number of years locked in the price of the coverage can have a big effect on the decision to purchase it. The longer the coverage period, the more cost-effective the warranty becomes. For example, Endurance offers 5 years/51,000 miles of coverage with a price locked in for 30 months at a total cost of $3,615. In contrast, CarShield offers unlimited years/unlimited miles with a monthly price that varies. The extended warranties with longer terms often provide the best value for money, making them the better option for many used car owners. On the other hand, those with shorter terms, such as the 4 years/48,000 miles offered by autopom! with a 36 month payment plan and a $116 down payment for a total cost of $4,176, may be more suitable for those who are expecting to upgrade their car in a shorter amount of time. Ultimately, it’s important for used car owners to do their research and understand the terms of their extended car warranty before committing to a purchase.

Step 10: Ask for referrals from friends or acquaintances

Finding out if the used car extended warranty you are considering is insured is an important step in making sure you are getting the best coverage for your needs. Here are the steps to follow to find out if your warranty is insured:

  1. Request a quote and coverage details from the company via email.
  2. Check the company’s BBB rating. Look at their reviews on Google, Yelp, and Facebook.
  3. Ask your friends if they know of any reliable companies with good extended car warranties.
  4. When purchasing your car, be prepared to ask the right questions. Make apples-to-apples comparisons and don’t feel like you have to make a decision the same day.
  5. Look for companies that have an A+ rating with the BBB, 5-star Google and Birdeye ratings, and positive customer reviews.

By following these steps, you can ensure that you are getting the best extended car warranty solution for your specific needs.

Should You Buy an Extended Warranty for Used Cars?

1. Know What the Warranty Covers

When evaluating the coverage of a used car warranty, you should look for details such as the type of coverage offered, what vehicle repairs are excluded, who is responsible for the repairs, and the length of the coverage. It’s important to compare the cost of the warranty to the cost of any potential repairs that could be incurred without the protection of a warranty. It is also important to do some research on the company offering the warranty and check their Better Business Bureau rating. Additionally, for certified pre-owned vehicles, it is essential to ask the dealer if the vehicle comes with a warranty. New cars come with a factory warranty that typically covers parts and labor for an agreed upon time, usually three years or 36,000 miles. Be sure to check the terms and conditions of the warranty, as well as any exclusions.

2. Research the Manufacturer’s Warranty

Step 1: Check the vehicle’s Buyers Guide to see if it’s still under a manufacturer’s warranty.

Step 2: Ask the dealer for the vehicle’s warranty documents to understand what’s covered and the expiration date/mileage.

Step 3: Reach out to the manufacturer to verify the accuracy of the documents.

Step 4: Compare all of your warranty options to find the best deal for your situation.

Step 5: Read through each vehicle service contract carefully to understand what type of warranty coverage is offered and what vehicle repairs are excluded.

Step 6: Research the third-party warranty company before you purchase coverage. Check the company’s Better Business Bureau (BBB) and Trustpilot profiles for a look at the overall customer experience.

3. Determine if the Car Needs Repairs

  1. Check the vehicle’s history to see if it has a remaining original manufacturer’s warranty (OEM). This will tell you if the vehicle is eligible for warranty coverage and what repairs, if any, are covered.
  2. Examine the details of any extended warranty or service contract to see what type it is, and what it may cover.
  3. Use sites such as RepairPal.com and Edmunds.com to estimate how much you will pay for repairs and maintenance annually.
  4. Calculate your monthly budget to determine if you can reliably cover your estimated repair costs.
  5. Consider whether purchasing a used vehicle warranty plan from a dealership or third-party company is worth the extra cost.
  6. Look closely at the systems and parts that are covered by the warranty and understand the deductible and claim rules.
  7. Do some math to determine if the warranty will be cost effective over time.

4. Check the Coverage Amount

Step 1: Research different extended warranty companies to decide which one is right for you. Look at the coverage amounts, deductibles and monthly payments for each plan.

Step 2: Contact the extended warranty company to ask for the coverage amount for your specific used car model. Ask if there are any additional fees or restrictions related to the warranty.

Step 3: Make sure you fully understand the terms of the extended warranty before signing up. Ask questions about the coverage, deductibles and other fees associated with the extended warranty.

Step 4: Make sure the extended warranty company provides coverage for the parts and systems of your car that you need.

Step 5: Ask for a copy of the extended warranty contract and read it carefully. Make sure you understand all provisions, exclusions and conditions.

Step 6: Check the Better Business Bureau website, to make sure the extended warranty company has a good rating.

Step 7: Make sure the extended warranty company is licensed, bonded and insured.

Step 8: Once you have found the right extended warranty company and plan, sign the contract and make sure you receive a copy.

5. Compare Extended Warranties

Comparing extended warranties for used cars can be a daunting task, but there are a few steps you can take to make the process easier.

Step 1: Research the different providers. Look up reviews, ratings, and customer testimonials to get a good sense of the company’s reliability. Make sure the company has a good standing with the Better Business Bureau (BBB) and other consumer organizations.

Step 2: Check the coverage and price. Compare the different coverage options and prices of the plans. Most providers offer several levels of coverage so you can buy only the coverage you need. Also, make sure to check if the plan includes any additional benefits such as roadside assistance, towing, and rental car reimbursement.

Step 3: Consider the choice of repair shop. Most manufacturers offer service only at their branded service centers. However, warranties from third-party providers usually let you choose any certified repair facility.

Step 4: Get multiple quotes. Contact several providers and get quotes for different coverage plans. This will help you find the plan that best fits your needs.

For example, you could research Endurance Warranty, CarShield, and Carchex, three of the top providers. All three companies offer several levels of coverage, with different features and prices. Endurance has a BBB rating of A+, CarShield scores a 4.7 out of 5.0 stars in our reviews, and Carchex offers coverage for almost any vehicle on the road. When comparing prices, Endurance and CarShield offers some of the lowest prices per year of coverage. All three companies allow you to choose your own repair shop, and Endurance and Carchex include additional benefits such as roadside assistance, towing, and rental car reimbursement.

6. Research the Company

Researching the company that offers an extended warranty for used cars can be done in several steps:

  1. Verify the company is legitimate by getting the company information. Check their website, social media accounts and any available reviews.
  2. Request a quote and the coverage details via email so you can make an informed decision.
  3. Look into their accreditation. Make sure they are certified or accredited by the most important agencies such as the Better Business Bureau (BBB) and Consumer Affairs.
  4. Check out what industry professionals and consumers are saying about the company. Compare reviews with other options before signing up.
  5. Once you have chosen a company, read their terms and conditions to ensure you are fully aware of the ins and outs of the plan.
  6. Finally, read through our full review of the company you chose to make sure you have chosen the best extended car warranty solution for your specific needs.

7. Check the Customer Reviews

Checking the customer reviews for an extended warranty for used cars can be done in a few easy steps.

First, you should check the company’s rating with the Better Business Bureau (BBB). BBB ratings are the toughest to get and are hard to fake, so this can be a good indication of the company’s quality. Also, check the reviews on platforms such as Google, Yelp, and Facebook. Google and Yelp are well regulated, but reviews on Facebook can be more biased, so take them with a grain of salt. It is also helpful to ask your friends and family if they have any recommendations.

When reading reviews, pay attention to how the company treats their customers and responds to complaints. Also, look at the reviews the same way you would for a restaurant or a movie.

It is also important to have a list of questions to ask when purchasing a car, and don’t feel like you have to make a decision right away.

Finally, you can shop online and explore coverage plans, read testimonials, and read reviews on websites such as olive.com. If a company has a good Google 5-star or BBB A+ rating, it can give you more confidence in the coverage you are investing in.

8. Understand Exclusions

What are the various exclusions for an extended warranty for used cars?

Extended warranties generally don’t cover exterior body damage, damage caused by misuse, pre-existing mechanical issues, routine maintenance, interior cosmetic damage, environmental damage, or damage from modifications or aftermarket accessories. Additionally, extended warranties do not cover routine maintenance items such as brake pads/brake shoes, fluid replacement, spark plugs, tires, filters, wheel balancing, scratches, dents, paint chips, etc. It is always important to review the plans, deductibles and items covered when researching options, as each policy may be different.

9. Check if there is an Auto Breakdown Insurance

  1. Check with the dealership where you purchased the used car to see if they are offering an Auto Breakdown Insurance policy.
  2. Research online for different companies that offer Auto Breakdown Insurance policies.
  3. Request a sample contract from the company to understand the coverage and any exclusions.
  4. Ask questions to the company or your dealership to understand the details of the policy.
  5. Make sure to check the reputation of the company to ensure they are reliable.
  6. Read the terms and conditions of the policy thoroughly before making your decision.
  7. Once you have chosen the right policy, make sure to pay for it and keep the documents for future reference.

10. Understand the Payment Method

When looking for an extended warranty for used cars, there are several payment methods to consider. Paying up front or financing with the dealership are two of the most popular options. Paying up front is a convenient way to go if you are comfortable with the price of the coverage, as you will not have to worry about monthly payments. Financing with the dealership may also be an option, although you should be aware that the cost of the coverage could be rolled into your auto loan.

Another payment option is pay-as-you-go, which allows you to pay a chunk down and then smaller amounts monthly. This option is usually the most flexible and you can cancel it at any time. You should also make sure to look for companies that offer payment terms that fit your budget.

Finally, creating an emergency fund for car repairs is essential, as it can help you avoid taking out an extended warranty. Automating a transfer from your checking account to your emergency fund every time you get paid can help you quickly build up a cash cushion.