- When shopping for a used car, always ask the dealer if the used car is selling "as is" or if it comes with a repair warranty. Most states do not allow a dealer to sell "as is" cars without a repair warranty. According to the Better Business Bureau (BBB), whether the used car is being sold "as is" or with a repair warranty, have the salesman include all oral promises in your contract, since oral promises are difficult to enforce. It is your legal right to have the vehicle inspected by an independent mechanic prior to purchase.
- Commercial car sellers are required to place a large sticker called a "buyer's guide" in the window of their used cars. The guide tells you whether the vehicle comes with a warranty, and if so, which systems are covered, how long coverage applies and what percent of repair costs the dealer will pay. If you do not see the buyer's guide displayed, ask to see the original buyer's guide or a copy of the original.
- Some states allow the sale of "as is" cars without written warranties, but the dealer must repair any known defect that impairs the car's use or safety prior to selling it. The majority of states require "as is" cars sold with some type of dealer warranty. Check the "as is" car buyer's guide on the vehicle to see the type of repair warranty offered and who is backing the warranty. It is quite feasible that the "as is" car may still be under a portion of the manufacturer warranty.
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Owner wantedEvery new car comes with a manufacturer warranty. This warranty covers certain repairs free of charge, but only if the damage occurs from normal wear and tear and you stick to all the conditions of the manufacturer warranty. Review the Lemon Law of your state if this warranty sounds too restrictive. - The auto industry considers a used car that is still under warranty in the same class as a new vehicle. Carefully read the manufacturer warranty to know exactly the type of repairs covered prior to spending extra cash on an extended warranty, which may duplicate repairs already covered under a dealer warranty or a manufacturer warranty.
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According the FTC, the extended warranty is not a warranty as defined by Federal Law but an Auto Service Contract. This type of extended warranty may be arranged at any time and it will always cost extra.
The extended warranty includes bumper-to-bumper coverage (nothing to do with bumpers), drivetrain coverage and rust/corrosion coverage. Save money by checking the dealer or manufacturer warranties to see if you really need an extended warranty.
The FTC recommends that you inquire from the dealer whether the extended warranty is transferable to another owner and who will be responsible for repairs if the warranty company goes out of business. Check with your state consumer protection office regarding information on the warranty company.
