Your guide to used car warranties

Key points

• You can buy a used car warranty from a car manufacturer or a third-party provider.

• Used car warranties come in various coverage levels, from bumper-to-bumper plans to basic powertrain protection.

• A used car warranty typically costs $2,845 in total on average.

Used car warranties can be good investments since you never know if your new-to-you vehicle will need expensive repairs a year or two after purchase. Whether your used vehicle still has some manufacturer’s warranty coverage left or you purchase a plan from one of the best car warranty companies, a long-term protection plan can help you enjoy your vehicle longer and minimize costly car repairs out of pocket.

A used car warranty is basically any car warranty that covers a used vehicle. It might be a manufacturer-backed plan that comes with a used car, a certified pre-owned (CPO) warranty or an extended warranty purchased from a third-party provider.

In broad terms, a used car warranty covers costly repairs for vehicles that are no longer under factory warranty. Factory warranties typically last from 3–5 years or 36,000–60,000 miles, so there are plenty of used cars on the market that passed these benchmarks.

The question of whether or not to buy a used car warranty comes down to how much you can afford to pay for auto repairs. From a financial standpoint, a warranty lets you break up the potential costs over time versus paying it in one lump sum. 

Types of used car warranties

There are essentially three types of used car warranties: used car factory warranties, certified pre-owned (CPO) warranties and extended used car warranties. These plans come with varying coverage options, which can include:

• Used car bumper-to-bumper warranty: This comprehensive coverage protects nearly all vehicle components with only a short list of exclusions. Similar to a new vehicle limited warranty, this type of warranty covers everything from the engine and transmission to air conditioning and electrical systems.
• Used car powertrain coverage: A powertrain warranty protects the engine, transmission and drive axles.
• Used car drivetrain coverage: This kind of plan covers the transmission and drive axles, but not the engine.

Used car factory warranties

When you buy a new car, it comes with a factory warranty backed by the manufacturer. This warranty promises to cover any defects related to faulty workmanship. A factory warranty doesn’t cover things like regular maintenance or wear-and-tear items like brake pads or wiper blades, but it gives you extra peace of mind as you drive your new car off the lot.

Factory warranty coverage still applies to a used car if it hasn’t expired. Many automakers give you the option to extend this protection with a manufacturers extended warranty plan when you purchase a used car from one of their branded dealerships.

CPO used car warranties

A CPO vehicle is one that meets specific guidelines set by a manufacturer. Along with model year and mileage restrictions, automakers usually put vehicles through extensive inspections before they can be labeled certified pre-owned.

You’ll only find CPO vehicles at branded dealerships. For example, you won’t find a Honda CPO vehicle on a Toyota lot. Manufacturers include special CPO warranties to add a few years of powertrain and bumper-to-bumper coverage that mimic the factory warranty.

Extended used car warranties

You can also extend the warranty coverage on your used vehicle, either from the dealership where you purchased it or from an independent provider. There are pros and cons to each method.

When you buy an extended used car warranty (also called a vehicle service contract) from a third-party company like Endurance, Carchex or CarShield, you have greater flexibility in terms of repair facility and time of purchase. Most extended used car warranties sold through dealerships must be purchased before the original factory warranty expires. Note that you’ll likely have to bring the vehicle to a branded dealership for covered repairs.

How does a used car warranty work?

If you have a used car warranty and experience a covered breakdown, take your vehicle to the dealership where you purchased the car for diagnosis and repair. If you have a third-party vehicle warranty, you can go to any licensed repair facility for this. Your warranty administrator will either pay the repair shop directly or reimburse you for the cost of repairs minus your deductible.

Is a used car warranty worth it?

A used car warranty is a good investment if you plan to keep your vehicle for many years. As your car ages, the likelihood of costly repairs increases. If you want to protect yourself from paying out of pocket for expensive repairs, a used car warranty is certainly worth it.

What to consider before buying a used car warranty

Be sure to evaluate the following factors before you buy a used car warranty:

• Factory warranty status: The Buyers Guide, which the FTC requires dealerships to display on all cars listed for sale, should tell you if there’s warranty coverage remaining on the vehicle.
• Plan benefits: Depending on the provider, a used car warranty can come with roadside assistance, trip interruption coverage, rental car reimbursement, towing benefits and coverage for routine maintenance.
• Plan details: You need to read the service contract carefully before you buy a used car warranty plan. The last thing you want is to be surprised by a breakdown that isn’t covered.
• Vehicle mileage: Higher-mileage vehicles have greater likelihood of mechanical breakdowns and costly repairs.
• Vehicle reliability: If your used car has a reputation for reliability, you may not need an extended warranty. Look up your vehicle’s reliability rating on RepairPal if you aren’t sure.
• Warranty transferability: If the used car warranty you purchase is transferable, it can increase your vehicle’s value should you decide to sell it.

How much does a used car warranty cost?

The cost of an extended car warranty depends on a host of factors but on average it is $2,845 in total, based on quotes we received from top third-party providers in the industry. These are the metrics that determine how much a used car warranty costs:

• Deductible (higher deductible means lower monthly payments and vice versa)
• Level of coverage
• Provider
• Vehicle make, model and mileage

We surveyed 1,500 people who had purchased an extended car warranty in 2023. Of these respondents, 243 reported that they bought a plan from a used car dealership. It was the third-most popular response, with 693 consumers purchasing an extended car warranty at a dealership and 530 consumers purchasing from a third-party warranty provider.

For additional context, our team gathered extended auto warranty quotes for a 2018 Toyota RAV-4 with 50,000 miles (see table). Keep in mind that while unlimited or month-to-month plans are often cheaper in the short term, they are often more expensive in total because you pay through the duration of your warranty.

Provider	Plan Type	Term	Monthly Price	Down Payment	Deductible
Endurance	Exclusionary	2.5 years/40,000 miles	$94	First month + $29 activation	$100
Endurance	Midlevel	2.5 years/40,000 miles	$94	First month + $29 activation	$100
CarShield	Exclusionary	Unlimited/month-to-month	$140	First month	$200
CarShield	Midlevel	Unlimited/month-to-month	$120	First month	$200
Carchex	Exclusionary	Unlimited/month-to-month	$150	First month	$200
Carchex	Midlevel	Unlimited/month-to-month	$140	First month	$200

Final take: Used car warranties can be a good choice if you plan to keep your vehicle for a long time

You have a lot of options when it comes to long-term protection for your used car. If you plan to drive your used vehicle for at least five years, then buying a car that comes with warranty coverage or purchasing an extended car warranty can be a good choice. If you don’t plan to keep the vehicle beyond the factory warranty timeframe, or can pay for repairs out of pocket, then you might not need a used car warranty.

If you do choose to purchase an extended warranty, be sure to compare quotes and read the fine print carefully before you purchase coverage.