Should I Buy a Car Warranty on Used Vehicles?

If you’re buying a new car, ask yourself; should i buy a car warranty on used vehicles? These days, most new cars come with a warranty from the manufacturer guaranteeing that the car will be free of defects for a set period of time or a set number of kilometers. You can have the car repaired for free if anything covered under warranty goes wrong during this period. It’s a great way to get some peace of mind on what can be a very expensive purchase.

However, when it comes to used cars, the situation is different. It is possible to get a warranty on a used car in Canada, but it’s by no means guaranteed. And because these warranties can be offered by a number of different suppliers, it’s important to make sure you know the difference between one warranty and another.

Truthfully, doing your homework is never a bad idea when you’re contemplating a used car purchase. As well as understanding more about any warranty that may be offered, you need to know the full history of any vehicle you’re interested in buying. That’s where our VIN checker tool comes in. Just type in the VIN of any car you’re interested in, and you’ll get a comprehensive report on its ownership history, any accidents it’s been in, any safety recalls issued for the car, and lots of other factors that can help you make a purchase decision.

Sometimes, a used car will come with a warranty already. At other times, it may be possible to buy a warranty for an additional fee. But is it worth it? Let’s look at the facts.

The Benefits Of A Used Car Warranty

A recent study by Consumer Reports showed that 95% of people shopping for a used car rate the reliability of the vehicle as extremely important. After all, a car that won’t drive isn’t really a car at all.

There are a number of steps you can take to make sure you’re not buying a lemon. One of the most effective is to get a full vehicle history report on the vehicle you’re interested in purchasing using our VIN check tool. Additionally, getting a mechanic to inspect the car before you buy can tip you off to any problems that currently exist or that may emerge in the future.

But no matter how well-prepared you try to be, things can still go wrong. Cars are complex machines with lots of moving parts, and even the best-maintained car can develop problems that no one could have seen coming.

Having a warranty on a used car is a great way to avoid any nasty surprises. A used car warranty can give you peace of mind by reassuring you that the seller stands behind any car you’re thinking of buying. And if any problems do develop, the warranty can save you a lot of money by paying for what can sometimes be very expensive fixes.

Many car manufacturers and dealerships offer what is called a Certified Preowned Vehicle. These cars have been inspected by trained mechanics employed by the dealership or the manufacturer to make sure they are mechanically sound. They also typically carry a warranty that will cover major manufacturing defects, offering you incredible peace of mind on your car purchase.

However, it’s important to make sure you always read the fine print. Make sure you have a strong idea of what is and what is not covered by any warranty before you sign the paperwork. After all, any warranty is only as good as what it covers.

Even if you’re not buying a Certified Preowned car, it’s possible to get a warranty on many used vehicles, but you will pay extra. Often, these warranties are called vehicle service contracts. The idea is that you will bring the vehicle back to the dealership for routine services, and if the car needs any repairs to parts covered in the warranty, you won’t have to pay for those.

If you don’t know a lot about cars and just want something reliable that can get you from A to B without a lot of headaches, these warranties can seem like a good deal. Having your car covered under warranty means that you won’t have to set aside money every month for any issues that may arise with your vehicle. For that reason, you may be willing to spend the money on a used car warranty just so that you can keep your budget under control.

The Downsides Of A Used Car Warranty

But before you sign that warranty paperwork, there are a few things you need to know.

The first is that used car warranties or vehicle service contracts can generate a lot of money for a car seller. They make sure that you will always bring your car back to the dealership for service instead of to an independent mechanic who may well charge less for the same work.

Additionally, staff at car dealerships are often strongly motivated to sell as many service contracts as they possibly can. This is because the dealerships have crunched the numbers and found that for most people, the warranty costs more than the repair costs would have been. After all, that’s how the dealership makes money on these warranties.

It’s important to remember here that we’re talking about averages. If you have a car that has a lot of issues that are covered by the warranty, you may end up saving money by purchasing a warranty for that car. But of course, tou should avoid buying such a car in the first place. The dealerships work on averages, so the most likely outcome of buying a used car warranty is that you will spend more on the service contract than you would have repairing the car yourself.

Is A Warranty Right For You?

That doesn’t necessarily mean that a used car warranty is always a bad idea. Even though it’s likely to cost you more than the repairs are worth, statistically speaking, you might be ok with that. Yes, you’ll pay more for the car and the warranty than you otherwise would have, but you’ll pay it all in one go, or even be able to roll it into any financing you take on the car. This can help prevent you being hit with unexpected repair costs which can blow a hole in your budget.

In that sense, buying a vehicle service contract is almost like another form of insurance. Yes, you may pay more than you otherwise would have. But you’ll also have peace of mind and know exactly what you’re paying, minimizing sudden expenses you didn’t expect.

However, if you want to save money, the best way to do that is usually to avoid buying a used car warranty. Having enough funds for any repairs needed on your car is part of the responsibility of owning a vehicle. And generally, it’s going to be cheaper to fix any issues that come up yourself than relying on a service contract to do it for you.

Plus, used car warranties are legal documents, which can be difficult for untrained people to fully understand. It’s not always easy to understand what is and what isn’t covered by a used car warranty, but it’s very important to know what the warranty covers.

If you’d rather not deal with a bunch of impenetrable paperwork and want to pay as little as possible for your used car, it’s better to stay away from used car warranties. If, on the other hand, you’re willing to pay a little more for some additional peace of mind, these warranties can still be worthwhile.

FAQs

Are used car dealership warranties worth it?

Used car warranties from dealerships are based around the idea that you’ll spend more on the warranty than you will on any repairs required. After all, that’s how the dealership makes money on the deal.

However, they can provide peace of mind, especially if you don’t know a lot about car maintenance. In the long run, you’ll probably pay more. But that might be worth it to have your car covered by a warranty.

Can you buy a used car warranty after purchase?

Usually, yes. Sometimes, a dealership may try to convince you that this is your only chance to get your used car warrantied. However, there are third-party insurance companies that provide used car warranties, depending on the age and condition of the car. If you want to avoid unexpected maintenance costs, these can be a good idea.

What does a used car warranty cover?

There is no simple answer to what’s covered by a used car warranty. Every manufacturer and car dealership covers different things. Usually, a warranty will at least cover the car’s powertrain, which includes its engine. There are also more extensive warranties that will include the transmission, the steering system, the electrical system, and other aspects of the car. Finally, there are what is called bumper-to-bumper warranties, which cover almost every part of the car except those subject to normal wear and tear, such as the brakes.

What happens if I don’t have a warranty and my car needs repairs?

If you don’t have a warranty, you are responsible for the cost of any repairs your car may need. In most provinces, once you buy a car, any problems it may have become your problem. The exception is if the dealer misrepresented something about the car and hid issues they knew about from you. In that case, you can contact your province’s licensing authority to lodge a complaint.

Manufacturing defects may also be covered by CAMVAP, the Canadian Motor Vehicle Arbitration Plan. This organization can arbitrate any disputes between you and a car seller to determine who is responsible for any repairs.