Used Car Warranties

6/9/2008:

I already know that Hoboken isn’t really the best place for a car, but many of us need or want them for one reason or another.

There are always tons of new cars floating around town, which you’d presume all still have factory warranties.

What about those that own used cars?

Many pre-owned vehicles (depending on the age/mileage) come “certified” from the dealer. Usually, it’s a 2 year/24,000 mile warranty, and covers most breakdowns other than wear & tear. But what do you do when that warranty expires, and still wish to keep it? Are any of you in the same situation?

hoboken-used-car-warranty.jpg

What choice should you make?

You have a few options if you intend on keeping your car post-factory warranty:

  1. Get the car re-certified by a qualified dealer.
    While this may be the safest all-around method for ensuring ongoing operation of your transportation, it’s also the most costly. To re-certify a car after warranty requires two steps. First, the car has to be “brought up to spec.” Meaning all components have to be certified in working order. This can cost several thousand dollars, depending on the make/model. Then, you need to renew the warranty. The total cost can easily exceed $5,000-$6,000 or more. Not an easy pill to swallow for many drivers.
  2. Buy a third-party warranty.
    This method appears to be the most-cost effective, but not without major caveats. For starters, the “used-car warranty” market is flooded with what seem to be fly-by-night operations. They may be located out-of-state and far away, and you have no real way to ensure they’ll still be in business down the road. Additionally, you’ll have to carefully read the contracts, see what obligations you’re under (such as keeping up with scheduled maintenance – which can render your contract void if you cannot prove you have), and what parts or components are/are not covered. Finding quality advice about which third-party warranty companies are reputable almost seems impossible (online, at least.)
  3. Replace the car with one in warranty.
    Probably the most sensible of the bunch, but may be out of reach financially for some.
  4. No warranty.
    This may be the riskiest choice of all. While you have no real out-of-pocket expense in the beginning, but if you ever need a major repair, you’d be up the creek. Some of the fancier cars out there (BMW, Mercedez, Audi) have some sophisticated electronic components that can easily set you back a large chunk of cash. But if you get lucky, you’ll end up further ahead. Do you take the risk?

But what if you’re leaning towards choice….

Number 2: Third Party Warranties?

Has anyone purchased one of these?

There are so many choices out there! To obtain a similar warranty to what originally came with your car, the costs range from $2300 to over $3500 (minimum 2/24).

But the options are mind-boggling, and unless you know someone who’s had a real-life experience with one of them, a very risky investment to make. But if there is a decent used-car warranty company to be had, it certainly is a safer choice than rolling the dice hoping you won’t need a costly repair in the future.

What, if any, are your experiences with Used-Car Warranties? Which company did you use? Which should be avoided at all costs?

Thanks!

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5 Comments on "Used Car Warranties"


HansBrix
Member
HansBrix
8 years 3 months ago

Most sentient beings are trained to avoid them. BKP says why. But basically, if they were economically beneficial to buyers, they wouldn’t be sold.

But if you want a deeper discussion read this….

http://www.carbuyingtips.com/warranty.htm

bradykp
Member
bradykp
8 years 3 months ago
Here’s my problem with “extended warranties”: 1. if you don’t extend it when you buy the car (new i’m talking about), it’s pretty expensive….but if you shell out the $2,000 when you buy the car….you had a 3 or 5 yr warranty already anyways. what’s $2,000 at a normal rate of return? why outlay the money at all? 2. they are expensive as biff mentioned, and are priced in favor of the sellers. i worked at circuit city in high school/college…the extended warranties for those stores are something around 99% profit. they hardly ever fulfill a claim, and when they do, it usually happened under the manufacturers warranty anyways at no cost to them. 3. If you simply take care of your car you shouldn’t even need these. My family has owned various models, so I don’t even believe those quality reports you read. Sure…on a massive level, the way the average consumer treats a car….maybe a hyundai won’t be as good as a toyota…we took very good care of our cars…routine maintenance, not letting them sit, not abusing them…and all of our cars, regardless of brand, went to 150,000 miles with no problems…most went to 200,000+ and still ran after we sold them. 4. it may be worth it on some of the pricey german cars that are expensive to have mechanics work on because of the scarcity of mechanics with that expertise….but then if you bought one of them you probably didn’t care about paying more for those… Read more »
Biff McFly
Member
Biff McFly
8 years 3 months ago

Except when you need a zip car and the previous owner is 4 hours late to return it. or if you finish with your usage and the next guy reports the car dirty. That’ll be an extra $50 charge. Or if you park the zip car and someone hits it 10 hours later. oh, you used it last? $00 deductible please.

But the above post is correct, warranties are usually not in your favor. THey price it int heir favor, you likely aren’t putting 20k iles a year on it so normal usage won’t likely create the expense that the warranty will cover. Also, it’s a pain in the rear to get to right coverage. you think a cost should be covered, they think otherwise. guess who’s opinion is right in the end?

if your car is close to that period where major work may be done, sell it now and buy something 2-3 years old. otherwise, run it into the ground and pay as you go.

Tiger
Member
Tiger
8 years 3 months ago

It really depends on your car, how often you use it, and how much you invested in it. If you drive to work, you should get an extended waranty from the dealer, they’ll be very happy to sell you one believe me.

On the other hand, if you are like most people in Hoboken, you probably use your car only on weekends. If so, is it really worth it spending that much on car, insurance, and extended coverage?

Zipcars are the way to go! $70 a day, but hey, think about all those days you are not using them, and don’t have to worry about moving them, cleaning them, parking them, or maintaining them.

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