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Warranties
& Certifications
Warranties
on a car are issued by the manufacturer and transfer
from car to car or owner to owner. That means, if someone
buys a used car that still has some warranty left on
it from the manufacturer, the warranty automatically
transfers to the new owner free of charge.
Extended
warranties are warranties that are usually sold by manufacturers
(or others) to car buyers who wish to extend the factory
warranty. In most instances, you can extend the factory
warranty up to 7 years or 100,000 miles on new cars
with a standard 3-year/36,000-mile factory warranty.
(Most luxury cars have a standard 4-year/50,000-mile
factory warranty.)
If
a car has a standard 3-year/36,000-mile bumper-to-bumper
warranty, and it only has 30,000 miles on it, then there's
still 6,000 miles worth of factory warranty left on
that car. And as long as a car has not exhausted its
factory warranty, you can extend the warranty up to
100,000 miles. With a 100,000-mile extended warranty,
be aware that you don't get an additional 100,000 miles-you
get up to a total of 100,000 miles. So, in our previous
example of the car with 30,000 miles on it, if you purchase
an extended 100,000-mile warranty, you get only an additional
70,000 miles worth of coverage.
If
a car has exhausted its factory warranty, then the largest
extended warranty you can usually purchase is 3-year/36,000-mile
warranty. But the difference is that this warranty is
added to the existing mileage on the car. For example,
a vehicle has 42,000 miles on it and, consequently,
has exhausted its 3-year/36,000-mile factory warranty.
If you purchase an extended 3-year/36,000-mile warranty
on this car, then the vehicle is covered until the odometer
reads 78,001.
Certification,
which seems to be the "buzz word" nowadays,
is basically a way for dealers to add a warranty that
is guaranteed by the car's manufacturer to a car. So
if a car is a "certified Toyota," that means
that Toyota will warranty the car under its certification.
If it's a Lexus vehicle, Lexus will certify it, and
so on. It's another way of adding a type of extended
warranty to a vehicle.
To
obtain this certification, vehicles must meet certain
requirements. For instance, in order for a Lexus to
be "certified," the brake pads, belts, hoses,
etc., have to be at least 95 percent of what they were
new. And the vehicle has to have new tires and floor
mats. With Toyota or Honda, it has to be within 65 percent
of what it was new in order for the vehicle to be considered
certified. Does that mean the car is really close to
being new? It just means that it is above 65 percent
of what it was as a new vehicle. You pay pretty much
the same price for a car to meet those certification
requirements as you would if you purchased an extended
warranty for the vehicle.
Here's
the difference between certification and extended warranties.
With an extended warranty, you get the full value of
the warranty added to the car plus any factory warranty
that remains on the vehicle. With certification, you
don't; you only get the extended warranty. For example,
let's say you purchase a car that has a 50,000-mile
factory warranty with 30,000 miles on it. If you purchase
a 3-year/36,000-mile extended warranty, you get the
rest of the factory warranty plus the extended warranty
(a total of up to 56,000 miles under warranty). If you
purchase the same car under certification, you don't
get the remainder of the factory warranty-only the 3-year/36,000-mile
coverage from the date you purchase the car. So, with
certification, you've lost 20,000 miles of coverage.
I
personally don't believe you should spend the money
on certification, unless the car with certification
is not much more than one without certification. I also
don't think you should spend the money on extended warranties.
That is, if you buy good cars. Now if you buy cars that
don't have a good reputation or don't have good reliability,
then yes, I'd say purchase an extended warranty.
But
as a personal shopper, I try to recommend only cars
that do hold up very well and tend not to have any kind
of problems-certainly not in the first 100,000 miles.
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