Understanding Used Car Warranty

One of the biggest concerns many car buyers have about purchasing a used vehicle is what to do if it breaks down? Is there any guarantee or protection for the consumer once you drive the car off the lot? For many, a dealer based used car warranty can offer some solid peace of mind when it comes to buying a used car.

What is a statutory used car warranty?

Used car dealers are required by law to supply a statutory used car warranty on most of the used vehicles that they sell. The exact terms of the warranty vary state to state, but generally require that the vehicle be less than 7 to 10 years old and has done less than 120,000 to 160,000 km. The statutory used car warranty will cover the car for a period of 3 months or 5,000 km, whichever comes first.

In some states, such as Queensland, vehicles that are older than 10 years or have more than 160,000 km, a statutory warranty is supplied for one month or 1,000 km.

The statutory used car warranty means that for the duration of the warranty period, the dealer will cover the costs for repair of any mechanical defects in the vehicle. This could be any engine, brake or suspension problems. For every day that the vehicle is being repaired and is off the road, the statutory warranty is extended by a day.

“New” car warranties and Certified Pre-Owned Vehicles

If you’re purchasing a used vehicle that is only a couple of years old, your purchase may still be under the original manufacturer’s warranty – this warranty is automatically transferred to you with the title of the car.

Meanwhile, many dealers may suggest extended manufacturer’s warranty which extends the coverage of the initial manufacturer’s warranty for a new car purchase. Always read the fine print and understand exactly what is covered and who will be responsible for repairs with the extended warranty – for example, some vehicle manufacturers themselves offer extended warranty coverage, such as Toyota or Peugeot, while other warranty plans are backed by an external third party.
Some brands, like Holden, offer a Certified Pre-Owned vehicle scheme – these particular vehicles have passed a points-style verification check and include their own specified manufacturer’s warranty for an indicated period of time.

What to keep an eye out for

Buying a used car from a dealer will generally be more expensive than obtaining one through a private sale, but you do get the peace of mind of being covered by the 3 month statutory warranty on most cars. Dealers are also required to display relevant information on the vehicle including:

1. REVs check information – all vehicles must have a clear title and have no finance owing on the title before it is sold.
2. Warranty coverage – if the vehicle is not covered by statutory warranty (due to its age or the odometer readings), this must be clearly displayed alongside the price.
3. Manufacture year and odometer readings - this basic information will give you some more information for your purchasing decision.

Meanwhile, you can obtain even more information about the vehicle by running a car history check on the Vehicle Identification Number. This type of check ensures that the dealer is not engaged in fraudulent behaviour, such as odometer rollback, and gives you bit more information on the vehicle’s history such as whether the vehicle has been written-off or suffered any water damage.