Extended Warranties Vs. Certified Used Car Programs

People often wonder what the difference is between buying a certified used car and buying a used car with an extended warranty.

Certified Used Vehicles

When buying a certified used car, you are really getting value in two ways. First of all, you are buying a car that has been thoroughly inspected (assuming that all the inspections promised in the program have been properly carried out). Beyond that, if the vehicle breaks down while it is still under the warranty that comes in the program, it will be repaired free of charge.

To put this another way, a certified used car is one that has been lightly used, thoroughly inspected (and repaired if necessary) and then covered by an extended warranty. Additionally, some certified programs offer roadside assistance where a tow truck will be dispatched to assist you wherever you have broken down. All of these benefits are purchased for one price — in other words, you negotiate and buy a certified used car for one price rather than the cost of the car and the cost of the warranty.

Used Cars With Extended Warranties

It is certainly possible to shop for a good used car and then simply buy an extended warranty to cover it in the event of a mechanical breakdown. To some degree, however, this complicates the process. First, the condition of the car is something of an unknown. This means your inspection of the vehicle is particularly important.

Later, as you negotiate to buy a used car, you also have to negotiate the cost of the extended warranty. These warranties are high-profit items for the dealer and it's difficult for the average consumer to know what to pay for one. Finally, the warranty might not be as comprehensive as the coverage available through a certified used vehicle program.

Another Alternative

In some cases, it is possible to select a used car you want to purchase from a dealer's lot and ask the dealer to include it in its certified used vehicle program. Oftentimes, this will be done for a specific fee. Remember to ask to see the results of the inspection report and follow the other tips in our article, "How to Buy a Certified Pre-Owned Vehicle"