Are you looking to purchase a new car? You might be interested in what kind of warranty the vehicle has. A "warranty" is a promise on behalf of the seller to fix certain problems that might arise.
The two basic kinds of vehicle warranties are express and implied. Make sure to understand your warranty rights before you purchase your next car.
What Is an Express Warranty for Vehicles?
Express warranties are warranties explicitly offered to consumers by sellers. These warranties can be made orally or in writing. They can commonly be found in advertisements and the formal documentation that comes with cars. Manufacturers will usually also provide certain express warranties on their vehicles.
What Is an Implied Warranty for Vehicles?
"Implied warranties" are warranties not expressly promised by the seller. They're unspoken promises that the vehicle meets reasonable quality standards.
Most states have laws requiring dealers to meet these implied obligations.
Implied Warranty of Merchantability
A "warranty of merchantability," the most common implied warranty, means that the seller promises the vehicle will do what it's supposed to do. The dealer is guaranteeing the vehicle is fit to sell. This warranty doesn't cover every car problem. The vehicle should run, and its basic functions should work.
Implied Warranty of Fitness for a Particular Purpose
Another common implied warranty is the "warranty of fitness for a particular purpose." This is an implied promise the vehicle can be used for a particular use. Advice from a dealer that a particular vehicle can haul your boat is an implied warranty of fitness.
Limiting Warranties For Vehicles
Dealers have methods of limiting their liability under vehicle warranties. One common method is to sell a car "as is." This means the dealer doesn't promise the vehicle is free of defects. The risk of buying a defective car falls on the consumer.
Some states don't allow dealers to sell "as is" vehicles. They can't avoid their implied warranty obligations in these states. Also, dealers can still be found liable in all states for selling a dangerous vehicle that causes personal injury. Selling a car "as is" doesn't eliminate liability under product liability laws.
Many dealers will use advertisements that state "implied warranties only." This means that there are no written express warranties. Consumers usually have more difficulty recovering under an implied warranty than an express warranty.
Full or Limited Warranties For Vehicles
Vehicle warranties from sellers are usually either "full" or "limited." A full warranty contains specific terms and conditions (see below). A limited warranty doesn't contain all of these terms and conditions.
For a warranty to be considered full, it must have the following characteristics:
- No time limits on implied warranties.
- You can get service under the warranty by just informing the dealer.
- You can receive a full refund or a vehicle replacement if the dealer can't repair your car after a reasonable number of attempts.
- Service under the warranty is free.
- Any owner of the vehicle is covered during the warranty period.
A full warranty doesn't mean that the entire car is covered. A dealer can choose to have only some parts or systems in the vehicle covered with a full warranty. A limited warranty can also be offered at the same time on other parts or systems.
Extended Warranties
When you buy a car (or a home or a major appliance), the seller might offer you a service contract. If you buy the service contract, the seller will provide maintenance and repairs on the item you bought for a specific period. While service contracts are often called “extended warranties,” they're not actually warranties. A seller includes a warranty when you buy a product, but a service contract is a separate agreement made after the sale for an extra fee.
The Magnuson-Moss Warranty Act
If a business offers a service contract, the federal Magnuson-Moss Warranty Act requires that it must conspicuously list all the terms and conditions in plain English. Also, the service contract can't disclaim or limit implied warranties except under certain circumstances.
Do I Need to Buy a Service Contract?
You generally don't have to buy a service contract when you purchase a vehicle. To figure out if buying a service contract is in your best interest, consider:
- whether the existing warranty's coverage is the same as you would get under the service contract
- whether the service contract is longer than the warranty
- whether the vehicle will likely need repairing and
- what you'll potentially pay for any repairs.
After careful analysis, you might decide that buying a service contract isn't worth it.