When you’re buying or selling a used car, the vehicle’s warranty (or lack thereof) is an important factor to consider. These guarantees provide the buyer with extra reassurance before they spend their hard-earned money. For sellers, it can help their car sell faster and for a higher price. Here are some tips for understanding warranties and the impact they have on buying or selling used cars.
What’s covered under a used car warranty?
Car warranties aren’t all made equally, they can be different for each vehicle. Most basic used car warranties provide coverage for the parts of your engine and transmission that need lubrication since these parts need regular service to keep your vehicle running smoothly. From there it could differ based on factors like the car’s mileage, current condition and age. You may see coverage of steering wheel parts, brakes, internal electrical, air conditioning and suspension as these parts experience wear-and-tear over the years.
Security for the buyer
No one wants to put their money into a car that will break down shortly after it’s been purchased.
Buyers may be skeptical about purchasing a used car, so one that comes with a guarantee can help alleviate some of that worry. Any warranty is better than none – even a limited warranty that only covers partial maintenance or mechanical parts, or that lasts just a few months, will add peace of mind for the buyer.
Warranties help buyers get the most out of their purchase, and allow them to resolve any issues that occur – without forcing them to handle it all themselves. It’s comforting to know that if anything unexpected happens within the first few months of owning the vehicle, it won’t end up as a significant expense for the new owner.
Helping sellers get more for their used car
When you list your car for sale, you should know the basics on how to create an effective online used car listing. Preparing your car for sale beforehand and taking good pictures is only part of the process. If you sell your vehicle while it’s still under warranty, you may have a better chance of swaying a potential buyer who is holding off due to concerns of longevity or unexpected repair costs. You’ll also make the vehicle more attractive to potential customers who are nervous about buying used.
As a seller, you can put a slightly higher price tag on your used car if it has a warranty because the buyer will know that the little stuff that could pop up down the road is nothing to worry about.
While warranties are one of the best things a car can come with, not every car guarantee is the same. Finding a used car warranty with good perks can provide benefits for years to come, regardless of whether you ride the vehicle through the duration of the agreement or sell it while the warranty is still valid.
Types of car warranties
Standard warranties
These are usually based on time or distance, whichever comes first (i.e. three years or 60,000 km). These could be best for drivers who don’t plan on traveling very far too often, or for those who plan on trading in before the time has expired. These often come from manufacturers, and usually cover things like mechanical defects and guarantees concerning the safety of a vehicle.
Service warranties
These cover everything from brake pads to oil changes –these are typically reserved for new cars, but some Certified Pre-Owned (or CPO) programs offer them as an incentive, and sometimes you can get a slightly used car that still has a service warranty attached to it.
Extended car warranties
The next level of coverage! Offering protection for years longer than a basic warranty, extended warranties on used vehicles are designed to create peace of mind after standard warranties expire. Depending on what is covered and who provides it, the extended cover can last from three to five years past the basic warranty.
Instead of having to worry about taking on the full cost of repairs to your vehicle years down the road, you know you have coverage to offset these potentially costly bills. They can also be used as an add-on selling feature if the warranty is transferrable, which can help you get more for the car if you decide to sell it privately.
Understanding the obligations of a car warranty
You may have to do certain things to keep your car’s warranty intact. For example, some require all maintenance to be performed by certified mechanics. Many are transferable, but they require specific proceedings to move from one owner to another. It’s also important to consider your warranty before you make modifications to your car.
If you add an after-market security system or install power chips to boost engine output, make sure that any changes you make to the vehicle won’t impact its warranty, or your insurance coverage. If you are a buyer purchasing from an independent seller, make sure to get complete maintenance records as dealerships may request this data for any repairs that they cover.
Whether you’re looking to buy a vehicle or simply trying to sell your current one, knowing the specifics surrounding a car warranty can improve the experience.
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