Home Advice Buying
Used Car Warranty Glossary of Terms

Used Car Warranty Glossary of Terms

Evaluating the worth of a warranty on a used car can be difficult. In fact, in many states, dealers are not required to offer any type of warranty. So when they do add a warranty, it is mostly just a marketing ploy, offering little in the way of protection or value. This is why it is always advisable to carefully read the terms of the warranty before you finalize the purchase of the used car. If you feel that the car is not adequately protected, you can attempt to negotiate a warranty plan into the price, or you may want to pay for an extended warranty plan. Below are a few used car warranty glossary of terms:

What They Mean When We Say Something Is Sold "As-Is"

If a car is sold “As-Is,” this means that it comes without a warranty. While most states allow a car to be sold As-Is, this must be disclosed by the dealer and offered in writing. According to the FTC, there are currently 12 states as well as the District of Columbia that do not allow “as-is” sales on used vehicles. These states include West Virginia, Maine, Maryland, Kansas Massachusetts, Minnesota, Mississippi, New Jersey, New York, Rhode Island, Vermont, and Connecticut.

Implied Warranties Are Just What They Sound Like

If a used car is not listed “As-Is,” but it does not come with any type of written warranty, most states will hold the dealer responsible for an implied warranty. This means that the car must meet certain reasonable quality standards. So, if you buy a car and it stops running a week later, it may be covered under an implied warranty.

Certified Pre-Owned (CPO) Warranties Are The Gold Standard

A certified pre-owned car is a vehicle that is subjected to a comprehensive inspection by a manufacturer certified mechanic. Because these cars are given a thorough inspection, they often come with a pretty extensive warranty plan. While the benefits of the warranty will vary depending on the CPO program, you can rest assured knowing that many of your car’s major parts are covered.

A Service Contract/Extended Warranty Gives Peace Of Mind

Also known as an extended warranty, a service contract is basically a warranty you purchase to add protection. If you are considering a service contract, you will want to ensure that it does not include duplicate coverage on the existing warranty. You will also need to check to see if all the repairs and routine maintenance, such as oil changes, have to be done at the dealer. Sometimes missing manufacturer recommended services or having the services completed by a third party will void the warranty. Whatever you do, make sure you read the warranty thoroughly before you agree to anything. And remember, if it is not specifically stated in writing, chances are it is not covered.