5 Things to Look for in a Dealership Car Warranty

5 Things to Look for in a Dealership Car Warranty

When purchasing a vehicle, especially a used one, it often gives buyers some peace of mind to tack on an extended warranty. Warranties protect you from repairs and service costs that could haunt your nightmares, but they can also come with strings attached and hidden problems.

Take your time when deciding on a warranty from a car dealership. As you do your research and make this important decision, consider the five following questions. These are vital aspects to consider when committing to a car warranty that will affect you for years to come.

1. What Kind of Perks Does It Come With?

First things first: you want to know what kind of bonuses you’ll get for signing up for a specific car warranty. It’s smart to evaluate the optional perks to determine if they seem worthwhile for your specific situation.

Some of the most common warranty perks include:

  • 24/7 emergency roadside assistance
  • Gas delivery when necessary
  • Lost key or lockout services
  • Rental car reimbursement
  • Towing services
  • Trip interruption coverage for meals and lodging

Most well-known companies offer at least some of these perks (if not all) on extended warranties. If the dealership warranty you’re currently evaluating seems to be pretty bare-bones with additional services, keep looking. There’s probably a better warranty out there for you.


2. Does It Cover Lemons?

Sometimes, when your car keeps breaking down or experiencing trouble, it’s not just a fluke thing. There may be a manufacturer-related issue that’s totally out of your control – and you shouldn’t have to pay for constant repairs because the company made an error.

Each year, it’s estimated that as many as 150,000 vehicles are dubbed lemons – cars with unfixable, repeated problems that are sold to consumers.

Extended warranties from third-parties do not commonly work with lemon law. If you want long-term coverage against a potential lemon, you might consider getting an extended warranty directly from the manufacturer. The legal policies on lemon vehicles vary from state-to-state, so no matter where you live, ensure that you’re protected. Generally, original manufacturer warranties cover vehicles for three years and 36,000 miles – but this can certainly vary. Dealership warranties typically cover for a month or so.

Basically, as long as your vehicle is still under the appropriate warranty, you can potentially receive benefits under lemon law – you’ll need to find a specialized, local lemon attorney to help you seek compensation.

Keep in mind that the vehicle manufacturer is responsible for covering all of your legal costs if you win a lemon law case. A good attorney can get you there, especially if you’re covered by your warranty. Knowledge of state’s laws and local challenges are everything in a lemon law case, so start your search with “lemon lawyers near me.”


3. What Do the Reviewers Say?

As with any big buying decision, it pays to find out what others are saying about the product. As you’re browsing information on warranties, are other reviewers praising the company or pointing out flaws?

You’re paying extra for a warranty, probably somewhere around $1,200, so it’s vital to ensure that the service is worth your money. Read about scenarios in which this specific warranty actually saved someone money, time, or pain.

Did people struggle to find repair shops that could honor the warranty? Was it easy to get necessary fixes? You can find answers to questions like these on top rating websites like Consumer Affairs and Consumer Reports.

If you’re struggling to find instances in which past buyers benefited from the warranty, you might want to skip it and go with a better option.


4. What Exactly Is the Coverage Period?

Think about it this way: the older your car gets and the more it’s used, the more valuable your car warranty is going to become. Brand new cars rarely need immediate repairs or pricey fixes, but old vehicles may start to run into frequent problems that a warranty would cover.

To reiterate, a basic warranty will last about three years, or until your vehicle has covered 36,000 miles. Make sure you’re reading the fine print of the warranty you’re examining. When is the expiration date? Does it stop covering the car after a certain number of miles?

You also need to pay attention to other occurrences that could end the coverage period.

For instance, will car body kits void your warranty? What about flooding, vehicle misuse, or racing? Look at all of the details to completely understand how long your coverage will last.

5. Can You Transfer the Warranty?

Let’s say you decide to buy another car and get rid of this one before your warranty expires. What happens to the warranty you already purchased? Can it be moved from one owner to another, or are you stuck paying for a warranty on a car you no longer own?

Sometimes, the answer is yes, but you’ll need to ascertain the details from the warranty provider. Generally, you’ll be able to transfer the warranty, but with a fee. How much is the fee? How easy is it to make the transfer?

Keep in mind that a transferable warranty is often a good way to entice future buyers. Consumers feel more confident buying a used car from an independent seller if it comes attached to a warranty that will protect them from immediate problems and repairs.


The Bottom Line

In 2018, 60 percent of customers surveyed by New Pegasystems stated that their warranties provided value. However, the “value” that a warranty brings can vary from customer-to-customer, car-to-car.

Take time to do your own research to figure out what kinds of services and perks you want from a warranty, whether it covers lemons, and how people feel about the warranty years later.

Don’t skim over the fine print about coverage, and at the end of the day, make sure that you can always transfer the warranty with the car in the event of a sale.


Bryce Newell is an automotive enthusiast who loves to write about the latest news, products, and DIY projects. While Bryce is an amateur in the field, he is passionate about cars and has been since he spent weekends in the garage helping his dad rebuild a 68 Dodge Charger as a kid.

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