Transferable vehicle warrants offer peace of mind to drivers on a budget and provide buyers with additional performance protection outside the lemon law. They are also useful for vehicles that will be passed on to other family members because a new warranty will not have to be purchased. The specific coverage offered by a transferable warranty will be detailed in the contract itself, but often includes items such as auto parts that suddenly fail to work before their expected lifetime passes.
Depending on the age of the vehicle, used vehicle purchases may even include two transferable warranties if the previous owner purchased additional service coverage on top of a warranty that came with the automobile. When obtaining a transferable warranty, or considering the purchase of a vehicle with one, the following steps help ensure the warranty is indeed transferable and the validity of the transfer itself.
• Obtain warranty information
• Assess transfer terms
• Contact issuer
• Register transfer
• Maintain records
The three main types of transferable warranties are the manufacturer, third-party, and service contract warranties. Of these three types of vehicle warranties, different aspects of an automobile are protected. For example, a manufacturer warranty guarantees vehicle and parts performance under normal driving conditions for an amount of time or miles. A transferable service warranty on the other hand, provides discounted or free repairs under specific terms for a period of time that can extend beyond the manufacturer warranty term.
The type of transferable warranty also determines where the vehicle under warranty can be serviced. For example, claims made on transferable warranties provided by dealerships are often only valid at the dealership repair shop, whereas broker warranties can be used at multiple authorized repair facilities. Nevertheless, dealer transferable warranties can be a better choice than broker warranties especially if the vehicle buyer lives or works near the dealership where the warranty claims are serviced.
A good transferable warranty will provide substantial coverage backed by a reputable and reliable company. A key advantage of these transferable instruments is they can increase a used-vehicle’s trade in or sale value due to the assurance it offers the buyer. Moreover, since not all buyers of vehicles know how to evaluate the condition and scale of potential future repairs, the transferable warranty takes the guessing out of future repair costs and protects against future rises in the cost of repairs.
In effect, transferable warranties that come included in a vehicle purchase are like insurance coverage or buyer protection that is already paid for by the seller. These vehicle warranties may also include roadside assistance, related rental vehicle costs and towing. Furthermore, for vehicle owners considering the purchase of a transferable warranty, the cost and additional repair services may be covered or lowered by reducing existing regular car insurance coverage if that insurance includes those services.
Not all vehicle warranties are transferable and the ones that are do not always provide full coverage. Often, only certain car parts will be repaired and auto maintenance costs are not necessarily included. For example, the most common types of vehicle costs such as tires, brakes and hoses are often not included in transferable warranties.
Another disadvantage of transferable auto warranties is the coverage provided may still require a deductible on replaced auto parts. If that deductible is too high, it may only amount to more of a repair discount than parts replacement with labor cost included. Also, for auto owners who do not want to transfer their transferable warranty when selling or trading in, it may not always be refundable.