Certified Vehicle Warranties
A “Certified Warranty” is generally a mix between a manufacturer’s warranty and a service contract. It is largely a marketing scheme, where the buyer is convinced that the vehicle is much better than the run of the mill used vehicle. The dealer, with the blessing of the manufacturer makes an extensive inspection. Then the vehicle is marketed as something special and reliable. Dealers are regularly charged $1,500.00 to $2,500.00 for the privilege of co-marketing these certified vehicles, and the price is passed on to the consumer. It’s more like a fancy way of selling you a service contract to back up the vehicle. The used car buyer’s bill of rights in California now controls which cars may not be labeled certified vehicles.
New Car Warranties
Most new cars sold have at least two warranties. Some, like the increasingly popular hybrid vehicles, may come with as many as ten or more warranties on different systems. Warranties tend to last different lengths of time. Each warranty should be fully disclosed in your owner’s manual or in a separate document dedicated specifically to warranties. The manufacturer will typically give a “bumper-to-bumper” warranty that covers all parts and systems, with the exception of certain “wear” items such as tires and wiper blades. Also, the manufacturer will often give a “power train” or “drive train” warranty covering the engine, transmission and differential (items that are often much more expensive to repair). This type of warranty usually runs for a longer period of time. There is no extra charge for any of these warranties although their costs are likely built in to the cost of the vehicle. You should always get warranty work done at an authorized dealership for the manufacturer and there should never be a charge for warranty work done under warranty coverage. Should you experience (for example) engine problems under warranty, the warranty should not expire, despite the date or your mileage, until that specific problem is fixed.
Used Car Warranties
There is a LOT of misinformation out there about used cars and the lemon law. In many instances used vehicles are protected by the lemon law. Many used cars, regardless of where they are purchased, come with one or more warranties. Sometimes, there is “leftover” coverage from the original new car warranty, still backed by the manufacturer. Other times, when buying a used vehicle, a dealership will try to “sell” you a warranty. What they are really selling you is a “service contract.” A service contract is much like an insurance contract, often calling for the buyer to pay a deductible or co-pay, each time you get ‘warranty’ service or have your vehicle’s problem diagnosed. The service contract can also be sold as an “extended warranty” when you purchase a new car. Usually that policy has no effect until after the manufacturer’s warranty expires. The differences between a warranty and a service contract include: •A warranty comes with the vehicle and a service contract does not •A warranty should pay 100% of the repair cost; a service contract usually has a deductible •A warranty is usually quite clear in describing coverage, a service contract is often misleading •A warranty is written by the manufacturer, a service contract is typically from a third party •“Service contracts” from manufacturers are often called “extended warranties” If you choose to purchase a service contract, shop the price. It is not unusual for the dealer to mark up that item as much as 100% of cost or more! California Lemon Lawyers has encountered consumers paying as little as $900.00 for a manufacturer’s service contract (“extended warranty”) and as much as $4,500.00 for a non-manufacturer’s service contract!