Used Car Warranties - 5 Key Questions to Ask Before Buying a Used Car

If you are in the market for a used car, you need to be in another market at the same time-the market for a used car warranty. You need to shop for both. And if you're not careful, you can end up costing yourself hundreds or thousands of dollars on a bad extended warranty.


When you are shopping, remember what an extended warranty is. It is essentially a service contract that covers things after the new car warranty (the factory warranty) ends. You will not get all of the new car coverage, even in a great extended warranty, so don't let that bother you. But be smart about what you do get. Here are some questions to ask.
Do you really need an extended warranty? You might not if there is a big portion of the original warranty left. If the warranty transfers to a new buyer, you might be covered as much as you need or want. Saving the money you would have spent on an extended warranty might be a smart option.
What is covered by an extended warranty you're considering? This is an extremely important question to answer. Many people shop for an extended warranty like they shop for gas-they buy the cheapest they can find. That is often a big mistake. In the world of extended warranties, you often get what you pay for.
What you want is a warranty that covers mechanical breakdown and "wear and tear." Wear and tear refers to items that tend to wear out and degrade the performance of your car. That means things like worn rings, shot pistons, overheating damage, leaks, etc. Stuff in your car tends to wear out, not fail, so do not settle for a warranty that does not cover wear and tear.Is the warranty company reputable? If you can not get information about the company from the Better Business Bureau or Web Assured, avoid them like the plague.You will find that many companies offering cheap extended warranties with low teaser rates reject most (or even all) claims. That's the way they make money on such a cheap product. They might not answer their phones. They might not send you a contract to review before you agree to the warranty. These are all bad signs.
Will the warranty pay the repair shop directly? If they make you pay first, they can quibble about reimbursing you. This is one of the biggest scam tactics out there. You should pick a warranty that will pay the repair shop directly and not force you to shell out your own money and hope for reimbursement.
Can you get repairs at any ASE certified shop? You don't want a warranty that forces you get service where you bought the warranty, or that restricts you to a few repair shops in the greater Newark area (although that might be convenient if you live in New Jersey). You want a warranty that will let you get your service at any shop certified by the National Institute for Automotive Service Excellence (ASE). That gives you the flexibility to have 400,000 professionals to choose from.Used car warranties can be a great way to protect your purchase, if you know what to look for. If you answer these five key questions, you will be able to protect yourself as much as you are trying to protect your car.