What To Look For In Extended Warranty On Used Vehicles?

Written by Tim Marsh:

An  extended warranty is a valuable asset for your used vehicle; it is a great way to protect your investment, a cost effective way to ensure that you will be able to have repairs done in a timely fashion and one of the most sensible ways to save money on automotive costs. However, if you are not sure what to look for, you may not get the dependable coverage you need. Here is some advice for shopping for a used car warranty.

A Trusted Name

The most important factor in choosing the best extended vehicle warranty is a nationally recognised company with solid reputation.

What to look for in extended warranty on used vehicles

What to look for in extended warranty on used vehicles

A simple internet search will return numerous results for companies that offer extended warranties. Yet, many of the companies that offer such coverage have a limited or non-existent history with consumers. Instead of trusting some unknown company that cannot prove their promises of excellent coverage at affordable rates, look for a nationally recognised name that you might insure your car with. Companies like Allianz, GIO, NRMA, and their sub brands offer demonstrated evidence of paying claims efficiently and are regulated by the insurance industry, so you can count on honest, legal business practices.

The Extent of Coverage

In terms of the used car warranty coverage, itself, it is crucial to know what is covered. Because they are notorious for extremely limited coverage, avoid the dealers’ extended warranties, unless they are free. Typically, the dealer’s warranty will only cover up to the first $2000-3000 per claim. These types of  extended car warranty coverage are designed to take your money and leave you with a considerable balance should something go wrong.

Financial Responsibility

Another problem you could face if you are not careful is a warranty cost you more money than you can afford. In some cases, this means a high deductible that must be met before any repairs are covered, in other cases, it may mean a warranty that forces you to pay the repair bills up front and wait for reimbursement, and still other warranties stipulate that certain repairs are not covered at all. Whatever the case, always read your agreement thoroughly; if something is unclear do not hesitate to ask questions.

Extra Benefits

When shopping for your extended warranty, ask about other benefits, such as rental reimbursement, towing and emergency accommodations. Although these benefits seem like they should be automatically included, some companies only offer them for an additional fee and others do not offer them at all. Never assume something is going to be covered; the benefit you overlook may be the precise one you need.

Choice of Repair Shop

Another assumption consumers sometimes make is about the repair shop they can use. You might be under the impression that you have your choice of repair shops and are free to use whichever one you wish. However, if your warranty designates that repairs must be performed at a specific service location, you could find yourself paying the entire bill. Always inquire about the use of repair shops and be certain you are comfortable with the choices that are available to you.


The final detail that you should investigate about your warranty is whether the warranty transferable. If you decide to sell your car in the future, can you transfer the warranty to the next owner? What is the process for doing so? Will the next owner have access to the same coverage you did or will it change? These are all questions that you may want to ask. Even if you are not considering selling your car at the moment, there is no way to know what may happen later and you do not want to wait until the time comes before asking the appropriate questions.

Stay sharp and keep these tips in mind when you are shopping for your warranty and you will be sure to get the best warranty for your individual needs.

Leave any comments below for the Author Tim Marsh if you have any!

Australian Online Finance

Posted in Car Insurance Blog, Used Car Extended Warranty Insurance

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