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Imagine spending hundreds of dollars repairing a used car you recently bought with your hard-earned money. Many used car owners experience this challenge because they fail to confirm if the vehicle has a warranty or what the law states about used car warranties. Consequently, the car becomes a huge liability rather than an asset to enjoy.

Vehicle warranties protect the new car owner from expensive repairs resulting from defective parts and unreliable quality. Once you get a warranty and understand its laws, you can have peace of mind and reap the potential benefits an auto warranty has to offer.

In the next section, we will discuss car warranties and the various used car laws that govern them at the state and federal levels. But first, what is covered under a used car warranty?

What is Covered Under a Used Car Warranty?

A used car warranty covers repairs that may occur due to normal wear and tear, but the coverage depends on the warranty type and provider. However, commonly covered items across all warranties are:

  • Engine repairs
  • Transmission errors
  • Drivetrain overhaul
  • Electrical systems
  • Certain mechanical components

Exclusions may apply in situations such as improper maintenance, modifications, or accidents. In addition, various used car warranties have duration, mileage, and transferability limitations. It is important to read the warranty carefully and ask relevant questions before buying a used car and signing a car bill of sale.

Federal Used Car Laws

The federal used car laws or the used car rule is a regulation established by the Federal Trade Commission (16 CFR Part 455). The law requires pre-owned car dealers to provide a buyer's guide that makes certain disclosures and includes specific information about the car a consumer intends to buy. The buyer's guide should be displayed on every used vehicle's window and contain the following information.

Buyer's Guide Required Information Specific Instructions
Mandatory disclosures - A warning the consumer cannot rely on the dealer's word that isn't confirmed in writing

- The consumer to ask the dealer if they allow a pre-purchase inspection

- Include the 14 major car systems and the potential defects that could occur

Vehicle's standard format - Make

- Model

- Year made

- Vehicle Identification Number (VIN)

Warranty information - Whether limited or full

- How much will the buyer pay for the warranty and specific systems covered

- Warranty duration

- Contact information of the seller's warranty handler

- Additional information that the consumer may have other rights not displayed

State Used Car Laws

Apart from the federal used car laws, every state provides its consumers with protection by governing the types of warranties available for consumers while purchasing a pre-owned car. The laws differ in scope and requirements, but the following are the main warranty categories.

Specific warranty

Also known as an express warranty, a specific warranty provides clear instructions on the duration, parts included, or mileage covered. A partial warranty covers specific systems, while a full warranty covers everything.

For example, a partial specific warranty may cover the engine and drivetrain for 120 days, but the condition is that you do not misuse or neglect the vehicle.

Implied warranty

An implied warranty is a warranty that is automatically assumed even if it isn't explicitly written down or stated by the seller. The warranty guarantees that the car being sold will meet certain standards of performance, quality, and suitability for the intended purpose. The two main types of implied warranty are:

  • Implied warranty of fitness for a particular purpose: For example, if you want a car for rugged terrain and off-road use, the dealer must provide a car fit for that purpose. The seller implicitly warrants that the vehicle had the features and capabilities to handle rugged terrain without having issues.
  • Implied warranty of merchantability: This warranty assures that the car is fit for ordinary use and meets the basic expectations of a car of its make and model. The dealer implies that the buyer should expect the car to be free of major defects and can function as expected. For example, after you purchase a vehicle, the implied warranty is that the car is in a drivable and safe condition.

If an issue arises after purchasing a car with these warranties, you must prove that the vehicle failed to meet the expectations or was defective at the time of purchase.

As is

Buying “as is” means you are buying the car without any guarantees or warranties from the dealer. In this situation, the seller disclaims any responsibility for the current condition of the car and any future defects that may arise. However, this law does not exempt the seller from hiding important information about the car or disclosing critical defects.

Fortunately, if you reside in any of the following states, the used car laws do not allow "as-Is" car sales:

  • Connecticut
  • Hawaii
  • Kansas
  • Maine
  • Maryland
  • Massachusetts
  • Minnesota
  • Mississippi
  • Rhode Island
  • New Jersey
  • New Mexico
  • New York
  • Vermont
  • West Virginia
  • Washington D.C.

In addition to requiring some form of warranty for any used car, some states also have lemon laws in place for used cars. Asking how lemon laws work and learning about it will help you reap the benefits if you live in these states:

  • Connecticut
  • California
  • Hawaii
  • Massachusetts
  • Minnesota
  • New Jersey
  • New Mexico
  • New York
  • Rhode Island

Used Car Extended Warranty

A used car extended warranty is an additional contractual agreement you enter with a warranty provider that offers you more coverage. The additional features go beyond the standard warranty the seller offers or the manufacturer's original warranty.

For example, if the original warranty had four months remaining, an extended warranty can protect you for a longer period and cover more mileage. You can purchase a used car warranty from the manufacturer, third-party warranty providers, or through a dealership.

Do You Have a Car Bill of Sale?

A car bill of sale is a legal agreement that outlines the terms and conditions of a car sale. It protects the buyer's rights and outlines the warranties offered at purchase. It also prevents future disputes that may arise. LawDistrict offers you a professional and legally binding car bill of sale covering this crucial section and more.

Start your Car Bill of Sale now

Helpful Resources:

Federal Trade Commission - Used Car Rule

HG.org - “As-Is” Vehicles

Imagine spending hundreds of dollars repairing a used car you recently bought with your hard-earned money. Many used car owners experience this challenge because they fail to confirm if the vehicle has a warranty or what the law states about used car warranties. Consequently, the car becomes a huge liability rather than an asset to enjoy.

Vehicle warranties protect the new car owner from expensive repairs resulting from defective parts and unreliable quality. Once you get a warranty and understand its laws, you can have peace of mind and reap the potential benefits an auto warranty has to offer.

In the next section, we will discuss car warranties and the various used car laws that govern them at the state and federal levels. But first, what is covered under a used car warranty?

What is Covered Under a Used Car Warranty?

A used car warranty covers repairs that may occur due to normal wear and tear, but the coverage depends on the warranty type and provider. However, commonly covered items across all warranties are:

  • Engine repairs
  • Transmission errors
  • Drivetrain overhaul
  • Electrical systems
  • Certain mechanical components

Exclusions may apply in situations such as improper maintenance, modifications, or accidents. In addition, various used car warranties have duration, mileage, and transferability limitations. It is important to read the warranty carefully and ask relevant questions before buying a used car and signing a car bill of sale.

Federal Used Car Laws

The federal used car laws or the used car rule is a regulation established by the Federal Trade Commission (16 CFR Part 455). The law requires pre-owned car dealers to provide a buyer's guide that makes certain disclosures and includes specific information about the car a consumer intends to buy. The buyer's guide should be displayed on every used vehicle's window and contain the following information.

Buyer's Guide Required Information Specific Instructions
Mandatory disclosures - A warning the consumer cannot rely on the dealer's word that isn't confirmed in writing

- The consumer to ask the dealer if they allow a pre-purchase inspection

- Include the 14 major car systems and the potential defects that could occur

Vehicle's standard format - Make

- Model

- Year made

- Vehicle Identification Number (VIN)

Warranty information - Whether limited or full

- How much will the buyer pay for the warranty and specific systems covered

- Warranty duration

- Contact information of the seller's warranty handler

- Additional information that the consumer may have other rights not displayed

State Used Car Laws

Apart from the federal used car laws, every state provides its consumers with protection by governing the types of warranties available for consumers while purchasing a pre-owned car. The laws differ in scope and requirements, but the following are the main warranty categories.

Specific warranty

Also known as an express warranty, a specific warranty provides clear instructions on the duration, parts included, or mileage covered. A partial warranty covers specific systems, while a full warranty covers everything.

For example, a partial specific warranty may cover the engine and drivetrain for 120 days, but the condition is that you do not misuse or neglect the vehicle.

Implied warranty

An implied warranty is a warranty that is automatically assumed even if it isn't explicitly written down or stated by the seller. The warranty guarantees that the car being sold will meet certain standards of performance, quality, and suitability for the intended purpose. The two main types of implied warranty are:

  • Implied warranty of fitness for a particular purpose: For example, if you want a car for rugged terrain and off-road use, the dealer must provide a car fit for that purpose. The seller implicitly warrants that the vehicle had the features and capabilities to handle rugged terrain without having issues.
  • Implied warranty of merchantability: This warranty assures that the car is fit for ordinary use and meets the basic expectations of a car of its make and model. The dealer implies that the buyer should expect the car to be free of major defects and can function as expected. For example, after you purchase a vehicle, the implied warranty is that the car is in a drivable and safe condition.

If an issue arises after purchasing a car with these warranties, you must prove that the vehicle failed to meet the expectations or was defective at the time of purchase.

As is

Buying “as is” means you are buying the car without any guarantees or warranties from the dealer. In this situation, the seller disclaims any responsibility for the current condition of the car and any future defects that may arise. However, this law does not exempt the seller from hiding important information about the car or disclosing critical defects.

Fortunately, if you reside in any of the following states, the used car laws do not allow "as-Is" car sales:

  • Connecticut
  • Hawaii
  • Kansas
  • Maine
  • Maryland
  • Massachusetts
  • Minnesota
  • Mississippi
  • Rhode Island
  • New Jersey
  • New Mexico
  • New York
  • Vermont
  • West Virginia
  • Washington D.C.

In addition to requiring some form of warranty for any used car, some states also have lemon laws in place for used cars. Asking how lemon laws work and learning about it will help you reap the benefits if you live in these states:

  • Connecticut
  • California
  • Hawaii
  • Massachusetts
  • Minnesota
  • New Jersey
  • New Mexico
  • New York
  • Rhode Island

Used Car Extended Warranty

A used car extended warranty is an additional contractual agreement you enter with a warranty provider that offers you more coverage. The additional features go beyond the standard warranty the seller offers or the manufacturer's original warranty.

For example, if the original warranty had four months remaining, an extended warranty can protect you for a longer period and cover more mileage. You can purchase a used car warranty from the manufacturer, third-party warranty providers, or through a dealership.

Do You Have a Car Bill of Sale?

A car bill of sale is a legal agreement that outlines the terms and conditions of a car sale. It protects the buyer's rights and outlines the warranties offered at purchase. It also prevents future disputes that may arise. LawDistrict offers you a professional and legally binding car bill of sale covering this crucial section and more.

Start your Car Bill of Sale now

Helpful Resources:

Federal Trade Commission - Used Car Rule

HG.org - “As-Is” Vehicles