In today’s economy, more and more people are choosing to purchase a used vehicle as opposed to a brand new one. In fact, certified pre-owned sales reached a record 2.6 million units in 2016. And considering the fact that there are 214 million licensed drivers in the U.S., used vehicles make up a significant portion of total vehicles on the road.
However, there’s one extremely important precaution that many used vehicle owners forget: taking the time to fully understand the terms and conditions of the manufacturer’s warranties.
Why Are Extended Warranties So Important?
Pennsylvania newspaper The Morning Call provides this cautionary tale:
Phyllis Kriz and her husband, of Lower Towamensing Township, Pennsylvania, purchased a used 2008 Nissan Ultima for their daughter back in 2013. But after just one year, the transmission failed. The car only had 71,000 miles on it, and the family had no choice but to get it repaired. Since it was outside of the manufacturer’s warranty, they paid the full cost of $5,200.
But just last December, the transmission failed yet again. Upon taking the car to a Nissan dealership, they were told that the car did in fact have an extended manufacturer’s warranty on the transmission, which should have covered the costs of not one, but both repairs. Unfortunately, since the first repair wasn’t performed by Nissan, the second repair wouldn’t be covered, either. The Kriz family had voided the extended warranty.
When Phyllis Kriz researched her warranty she learned that reimbursements were indeed possible for repairs made at any independent shops before the issue of the extended warranty in 2010.
“It only seems fair to also extend this courtesy to customers who bought their vehicles used after the implementation, too, because we did not receive the formal notice,” Kriz told The Morning Call.
Kriz took action by mailing receipts for both transmission repairs, along with an explanation of her unique situation, to Nissan corporate headquarters in Tennessee. After nearly a month without a response, she’s speaking out.
“If we knew of the extended warranty, of course we would’ve had her bring the car to a dealer to be fixed and I was hoping this common-sense logic would be all that was needed for them to authorize our eligibility for reimbursement,” she said.
After a reporter from The Morning Call contacted the automaker, Nissan eventually agreed to meet the family halfway and reimburse her for the second repair, done by Nissan, for a total of about $4,300. Kriz said that Nissan wouldn’t pay for the first repair job because Nissan parts were not used.
“Nissan does not warranty repairs previously done by third-party repair shops because we have no way to validate the parts, tools, repair methods or lubricants used,” said Nissan spokesman Steve Yaeger. “When an authorized Nissan service facility performs the repair, we know the correct parts and fluids were used and the technicians were trained to perform the repair or replacement.”
Situations like these are especially important for those with lower incomes. Unexpected repair costs can wreak havoc on tight budgets, and in extreme cases these auto repair costs can actually exceed the purchase price of the vehicle. Since about 43% of people are financing their vehicle — and the most frequently searched price range for a used vehicle is under $5,000 — unexpected repairs for major parts like transmissions can add up quickly.
Record Number of Defective Cars on the Road in 2017
Even worse, used vehicles with recalled parts don’t just pose a financial risk for unwary buyers. A new study from CarFax reveals that there are a record number of vehicles on U.S. roads with unfixed, recalled parts. In total, there are more than 63 million of these defective cars on the road today.
After several high-profile and deadly recalls, the number of U.S. auto recalls peaked in 2016, when carmakers were forced to recall more than 53 million vehicles in 927 recalls, according to the NHTSA.
Numbers like these are a stark reminder that car buyers in search of a great deal should always do their research before driving a new used car off the lot.
But How Can Used Car Buyers Check Their Warranties?
This incident also begs the question: why isn’t there an online resource designated to alerting car owners about extended warranties? Most used car shoppers know that they should check for potentially dangerous auto recalls, which are publicly available on the National Highway Traffic Safety Administration’s website for recalls. At this website, all car owners need to do is enter their unique vehicle identification number (VIN); the database will then tell them if their vehicle contains any recalled parts.
“Unfortunately, there is no clearinghouse where you can check if the used vehicle has a service contract and whether or not that carries on with the next owner,” said Jack Gillis, director of public affairs at the Consumer Federation of America.
Manufacturers and auto repair experts recommend the fluid in a manual transmission should be changed every 30,000 to 60,000 miles, but even the most diligent car owners will run into problems eventually. In a case where the vehicle contains recalled parts, routine auto maintenance procedures won’t do much to help.
Gillis said that those who buy a late-model used car can typically get the rest of the original warranty if they register with the manufacturer. However, they should always ask the seller for any paperwork regarding the warranty they may have, in addition to maintenance records.