I would never buy a used car warranty.
Why? The escape clauses. Almost all of them have them. If yours has any of these, beware.
1. The “effective date” trick
Some used car warranties start on the day the car was originally put into service.
Yes, really. Buy a 5-year warranty on a 3-year-old car, and you may have only 2 years of coverage left. Crazy, but true.
2. The exclusions
Many used car warranties exclude:
- Normal wear and tear
- Owner abuse
- Pre-existing conditions
Think about that. Almost every problem with a used car comes from one of those causes.
3. The deductibles
Many charge a deductible on every repair. Sounds fine, until one problem causes several others. You could end up paying a deductible on each item that gets fixed.
4. The “vanishing” coverage
Many say that once the total cost of repairs equals the market value of the car, coverage ends.
As your car ages, its value drops while repair costs pile up. Chart it out and your protection falls off a cliff. You thought you bought 5 years of coverage, and it could be gone after a few repairs.
Before you sign anything, read the contract for these four clauses.
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