Can You Buy Extended Warranty On A Used Car
The warranty should give specifics on the vehicle service contract and explain who is legally responsible for the repairs. Look over the fine print to get all the details and make sure all of your questions are answered before you buy your vehicle.
When you purchase a used vehicle, you may have the option to purchase a service contract, also known as an extended warranty. With a service contract, the dealer agrees to perform or pay for certain repairs or services on the car. You can buy the coverage for an extra cost.
Lease a car. If you go this route, your leased car may come with a warranty that covers repairs. In turn, you may not have to worry about being hit with a major unexpected expense. There are pros and cons to leasing a car, but it can be a cost-effective alternative to buying.
But extended warranties are not strictly regulated, and can contain a large number of restrictions and loopholes. If you do decide to buy one, you need to read over the policy carefully, including all the fine print that could result in your paying for the work yourself, despite coverage. For instance, on a specific repair, the provider may put a ceiling on reimbursement. Or they may specify that the work be done at a small group of facilities, none of which are convenient to you.
Deductibles are an issue. If you buy an extended factory warranty from the automaker, typically it does not have a deductible. But third-party warranties usually do include them, and they can be as much as a few hundred dollars.
In many cases, you will drive for years in either of these cars without needing any major repairs. While engines as late as the 1950s would require a rebuild after 60,000 miles, today 200,000 miles without significant problems is quite common. That Toyota Corolla, a very robust car just getting started at 30,000 miles, is very unlikely to need major engine or transmission work in the warranty period. But, of course, stuff happens.
There are many choices to consider when purchasing a used vehicle. What is the difference between Original Equipment Manufacturers Warranty (OEM), Extended Car Warranties known as Vehicle Service Contracts (VSC), and Mechanical Breakdown Insurance (MBI). Most of the coverage options agree to pay for unexpected repairs but they are all a bit different in nature.
An extended warranty for a used car is technically called a MBI or VSC, as previously mentioned. An extended warranty may be sold at the dealership when buying a car or post purchase as an aftermarket offering. Extended warranties will cost additional to the vehicle and when purchased at the dealership, often are asked to be paid up front or financed with your vehicle. The extended warranty is additional to the Original Equipment Manufacturers (OEM) Warranty. Each make and model offer different OEM coverage periods. They are put in place to cover defects in materials and workmanship from the factory. OEM will expire eventually so make sure to understand the parameters of the OEM so to not be without coverage.
Like all warranties, whether you are covered by an OEM or an extended warranty, there are terms and conditions that spell out items covered and those excluded. Most extended warranties are offered for a set amount of years and usually applies to parts and labor. Always review the conditions and claim information so when needed it will be easy to file a claim and get your vehicle back on the road.
MBI is a regulated insurance product. It, like the other plans, covers major failures that can occur during the ownership of your vehicle. MBI policies have a set of terms and conditions that you will want to review like the other plans mentioned above. MBI policies are usually offered by a third-party aftermarket for your new or used vehicle. Important note: Due to the nature of MBI and it only being offered through an insurance company, it is regulated by the insurance industry for standards and claims.
None of the above plans or policies cover damage c