Used-car warranty: Is it worth it?

If you’re buying a second-hand car, you may want a warranty for peace of mind. But how do used-car warranties work, and are they worth getting?

It’s fairly well-known that new cars come with manufacturer warranties that protect you if the car develops a fault, but if you’re after a second-hand car the situation is less clear-cut.

There are several factors at play when it comes to warranties for second-hand cars. Some dealers may offer their own warranties by default, others may charge for a warranty or point you towards a specific third-party warranty firm, while newer second-hand cars may come with the remainder of a manufacturer warranty.

People buying from a dealership, for example, are protected by the Consumer Rights Act, which in practice can share some similarities with a warranty.

Because of this patchwork nature, how long a used-car warranty lasts, what it costs and what it covers can vary enormously; our guide will talk you through all aspects.

What does a used-car warranty cover?

It is important to read the terms and conditions of any used-car warranty before buying the car, or taking out a warranty. Warranties vary from policy to policy, and while some may be fairly comprehensive and straightforward, others may contain all kinds of exclusions that stop you from being able to make a claim if things go wrong.

Regardless of the policy, used-car warranties do not typically cover ‘wear and tear’ items. Examples of such items include clutches (or at least their friction materials), windscreen-wiper blades, brake pads and discs, tyres, and other parts that wear over time as part and parcel of everyday driving. Do also note that warranty terms and conditions will often require you to get the car serviced in-line with recommendations, and may not pay out if you ignore a warning light.

Policies won’t typically cover faults that were present when you bought the car, so bear this in mind (and consider walking away from the deal) if a salesperson tells you any issues that may be present on a car can be sorted by a warranty.

Warranties also have age and mileage limits, too: if the used car you are buying is getting close to either of these, it may not be worth taking out.

As an example, a company offering two levels of warranty cover may list the specific items covered by their cheaper warranty, with all other items excluded by default, while the more expensive policy may list all the items specifically excluded from the policy, with all other items covered by default.

There are too many policies on the market to list all differences you may encounter, but a more expensive policy may cover a car’s infotainment system, for example, whereas a cheaper policy may not.

You may also find that the amount claimable varies depending on the level of cover, with lesser policies capping individual payouts at £2,000, for example, and better policies using the vehicle’s purchase price as the cap.

The Consumer Rights Act and used-car warranties

Regardless of whether the car you are looking at is offered with a warranty, if you’re buying from a dealer in England you will be covered by a piece of legislation called The Consumer Rights Act. Dealers cannot get out of having to abide by the Act, even if a car is advertised as ‘sold as seen’, or ‘trade sale’ (though you may wish to ask yourself why a car is being marketed in this way before buying it).
We highlight the Consumer Rights Act because if a dealer offers to sell you a six-month warranty, you may not consider it worthwhile given the protection automatically provided to you by law.

The Consumer Rights Act dictates that a used car purchased from a dealer – regardless of its age or price – must be:

• Fit for purpose
• As described in its advertisement
• Of satisfactory quality (the age of the car is taken into account for this)

If the car fails to meet any of these three criteria within the first 30 days of purchase, you are entitled to a full refund.

If the car fails to meet any of these criteria within the first six months of ownership, the fault is presumed to have existed before you bought the car. The dealer has one chance to repair the car, after which they must offer a refund.

After six months (but before six years) the assumption is that the fault developed after you purchased the car, so getting issues fixed after this point can be tricky.

Note that wear-and-tear items are not covered by the Act, which only applies to cars bought from a dealer, not private individuals. Also bear in mind that not all dealers will share your interpretation of how the Act applies to a specific fault, and you may need to enter into discussions about getting problems remedied.

Our guide to your rights when buying a used car has more information on this topic.

Where can you purchase a used-car warranty?

There are four main types of warranties that can apply to a used car:

Approved-used warranties

If you buy a car from a main dealer under a manufacturer’s approved-used scheme, you should expect a reasonably comprehensive warranty to be included in the sale price. This will typically last for 12 to 24 months, depending on the manufacturer. Do clarify with the dealer what the warranty does and does not cover, though.

Dealer-provided warranty

There is no legal obligation for car dealers to provide any kind of warranty, but many independent dealers will offer their own with the used cars they sell. How long these warranties last for can vary depending both on the dealer, and on how old the car is (with newer cars typically having longer warranties), while you may be given a warranty for free, or be offered the option to buy one.

You may also be able to pay to extend the length a warranty lasts, and this applies both to free and paid-for policies. Do note many dealer-provided warranties actually operate through a third-party warranty company; if so, it will typically be this company rather than the dealer you need to deal with if you make a claim.

Third-party warranty

In addition to dealer-provided warranties that may be operated by a warranty company rather than the dealer, you can also purchase a used-car warranty directly from a third party, completely independent of the dealer. This includes cars bought privately. There are a number of firms that offer such policies, and those individual firms may themselves offer different levels of cover, depending on how much the warranty costs. Many third-party firms will not sell warranties for cars that are, for example, more than 10 years old or have covered over 100,000 miles.

It is a rough rule of thumb (though by no means guaranteed) that the more you pay for a third-party warranty, the more comprehensive it will be. Regardless of this, each policy will have its own terms and conditions, so be sure to read these before buying.

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Remainder of manufacturer warranty

In addition to the above warranties, all of which are marketed specifically for second-hand cars, those shopping at the newer end of the used-car market may find a vehicle is still under its manufacturer warranty.

Most car makers offer a three-year/60,000-mile warranty on their new cars, while a number of firms offer more generous policies. Kia, for example, provides a seven-year, 100,000-mile warranty with all its new cars; Hyundai issues a five-year/unlimited-mile warranty; and Citroen gives a five-year/100,000-mile warranty.

If the car you are buying falls within the time and mileage limits of a manufacturer policy, it will typically need to have been serviced in-line with manufacturer recommendations for the policy to be valid – so look in the service book to check the car’s history. If you’re buying from an independent garage, you could also contact the appropriate main dealer directly to ask them about a specific vehicle.

Toyota does things slightly differently, providing a three-year warranty on all its new cars, extending this by one year until the car is 10 years old or covers 100,000 miles if you get the car serviced at a Toyota dealer. This even applies to cars that have previously been maintained outside the Toyota network, meaning if you buy an eight-year-old Toyota and get it serviced at a main dealer, the warranty will be reactivated for the next year.

Note that manufacturers update and change their warranties over time, so depending on the age of the car you are buying, you may find it falls under an older regime (EG Toyota’s warranty used to run for five years).

How much is a used-car warranty?

If one isn’t included with the car you’re buying, the amount you will pay for a used-car warranty depends on the following:

• The age and mileage of the car
• The model of car
• The level of cover provided by the policy

You could obtain a basic third-party for less than £200 for a supermini like the Ford Fiesta, rising above and beyond £500 for higher-end cars, and more comprehensive policies.

An alternative to taking out a used-car policy is setting aside an amount of money each month as a ring-fenced fund for any repairs the car may need.

Check out our guide on what to look out for when buying a used car for some more advice.

How do you make a claim on your used-car warranty?

Your first port of call if your car develops a fault you think is covered by the warranty is to contact the company or dealer that provided the policy. They will be able to tell you if you are entitled to a warranty repair, and inform you how to go about getting this done.

Do note that some used-car warranties come with excesses, which you will have to pay before making a claim. Others may have limits on how much will be paid out for faults with specific items (EG fuel systems, gearboxes), while the terms and conditions may also set out maximum hourly garage labour rates that will be paid for if repairs are needed, and you may need to get any work done by a garage approved by the policy.

Should you get a used-car warranty?

Used-car warranties are essentially a type of insurance, and there’s an old saying that any kind of insurance is a form of gambling: you’re betting the amount you pay for a policy will be less than the amount you might have to pay out if you have to make a claim.

There is, of course, the peace of mind a warranty policy provides, which is harder to put a price on: it can be very reassuring to know that if your engine develops a catastrophic fault, you won’t be on the hook for paying for a replacement – assuming the fault is covered by the warranty.

We know of one motorist, for example, who paid £200 for a 12-month third-party policy facilitated by a dealer; within the year the policy had paid out around £5,500 as the car’s automatic gearbox had failed terminally and had to be replaced.

Others are not so fortunate, having claims for snapped timing chains (and the ruined engine this entails) declined due to a policy’s small print.

It is therefore vital that you closely read the terms and conditions of any policy you are considering taking out in order to understand what is and is not covered. It can also be wise to check out online reviews for the company you’re thinking of buying a warranty from, and also factor in the cost of any excess the policy might have, as well as the value of the car. A £300 policy with a £250 excess on a car worth £1,000 may not be a wise investment, for example.

Used-car warranty FAQs

When does a used-car warranty start?

A used-car warranty will start when the policy documents are signed, and payment received. This will typically be the day you take delivery of the car.

How long does a used-car warranty last?

This depends on a number of factors. A warranty included in the price of a car may run for six months, but with the option to pay to extend the length of the policy. If you’re taking out cover directly from a third-party firm, 12 months is a more typical length.

Can you cancel a used-car warranty?

Used-car warranties will come with a 14-day cooling-off period, during which you are allowed to cancel for a full refund. After that, it will be down to what’s contained in the terms and conditions you agreed to when you purchased the warranty.