The Used Car Purchasing and the Certified Warranty Question

Used cars present a great value, especially (Manufacturer) Certified Used Cars, many times a one or two year old car with 30,000-40,000 represents a great value, saving the buyer 35% (or more) from the original MSRP.

Here are some things to watch:

New Car warranty – What remains? Most New Car Manufactures Warranties are expressed in Months and Miles and cover for whichever comes first. They are expressed in something like “3 Years / 40,000 miles” or “5 years / 60,000 miles”

Certified BY WHO – the term “Certified” has been broadly applied – be sure it is backed by a Major Manufacturer you recognize – in other words Ford, General Motors, Volvo, Mercedes-Benz etc.

KNOW THE PARAMETERS – is it comprehensive? Whats not covered? – If the dealer won’t give you something in writing, a brochure, a website link, or a sample contract be cautions.

KNOW THE DEDUCTIBLES – many programs are offered with or without a deductible, if a $200 deductible does not represent a potential hardship, then it can be a savings on the initial purchase.

ASK – you most powerful tool in the Car Buying Process is your own ability to ask questions, a dealer worth doing business with will answer your questions openly, or get those answers if he/she doesn’t know them.



There is a sweet spot in the market for a Used Car under $10,000 – this typically is  a car several years old and with 80,000 (or many more) miles on the odometer. These cars bring affordability as second cars or student cars. These cars are typically beyond Manufacturers Warranty (by years and miles) and no longer qualify for Manufacturers Certified Warranties.


CAN I AFFORD THE COST  AN UNSCHEDULED REPAIR EVENT – there are two key terms here – “unscheduled” and “cost” – Cars break down in their own timing and usually that represents bad timing! Cost also can be surprising. Look at your own finances and tolerance for unplanned expenses, and be honest with yourself.

CONSIDER THE SUBSYSTEMS OF THE CAR – cars -even ten/fifteen years old cars – have subsystems that are expensive.. failure of a drive axle, transmission, air conditioner, electronics module, or in some cars Hybrid Electric component can be prohibitive.  Being presented with a repair estimate of $2,500 - $3,500 is not an unusual amount for a sophisticated component.

BUT THE WARRANTY CAN BE 20% of THE VALUE OF THE CAR! Yes, a used car with a retail price of $7995 can have a aftermarket warranty cost of $2,000! Usually you are caught up in the attraction of the vehicle and getting all you can per dollar spent, and you have forgotten the transportation needs the car fills. Remember your transportation needs and the realities of your own financial picture.

THE COMPANY THAT ISSUES THE WARRANTY – because these cars are older and higher mileage they will no longer be candidates for Manufacturers Certified Warranties, so you are now entering a secondary market… use your tools of asking questions at the Dealer and the Internet. A simple question like “are you an agent through which this warranty is executed?? Are other dealers?? Is towing covered?? What if I’m away from home?? Is it my choice?? What is the general reputation of this company?? Asking those same questions through an internet search is also prudent. Again if a dealer is unable or reluctant to give details in writing its a sign to be cautious. Your Bank/Credit Union may also have its own Warranty Extension company – be just as cautious.

Categories: Pre-Owned Inventory