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Used car powertrain warranties come with many catches

Young buyer hit with $400 repair in first month
Posted at 1:42 PM, Jan 11, 2019

If you're buying a used car, the promise of a warranty often brings peace of mind. But do you know what kind of warranty you are getting?

One woman just learned there's a big difference between bumper-to-bumper and powertrain warranties, and it can be very costly if you need a repair.

College student Ashley Lorenzen did her homework before buying a gently used 2014 Chevy Spark. She had it inspected for issues and checked the CARFAX report.

However, just three weeks after her purchase, "I started hearing this very loud sound from the rear wheel," she said.

Lorenzen wasn't too worried -- she'd ensured the car came with a powertrain warranty to cover unexpected problems. "I was thinking OK, this grinding noise started, so I will call them, and hopefully the warranty will cover it," she said.

Wheel breakdown not covered

She learned the rear wheel main bearing had gone bad, but the dealer told her it wasn't covered. The hour of labor its mechanics took to diagnose the problem would cost almost $100, before they even started to repair it.

It's a common complaint from used car buyers. If you look at any used car at a major dealership these days, there's a good chance it comes with a powertrain warranty, which can run anywhere from 30 days to "lifetime."

As Lorenzen learned, its a good idea to find out what that warranty covers and what it doesn't.

Scott Stewart is a veteran certified mechanic who manages a CAR-X store. He said he has seen the same situation afflict dozens of people: Used car buyers who thought their limited powertrain warranty would cover their breakdown.

"Usually the powertrain warranty is for things that actually make the vehicle move, the engine and the motor itself," he said. "It usually does not cover brakes, wheel bearings, and odds and ends of the car."

Stewart replaced Lorenzen's wheel bearing, but it set her back $375.

What you can do

To protect yourself, ask what any warranty covers before you purchase a used car.

  • Bumper-to-bumper warranties usually cover every moving part as well as electrical issues (which can be very costly to repair).
  • Powertrain warranties typically cover just engine, transmission and driveshaft. Wheels, suspension, air conditioning, heat and electrical accessories are usually not covered.

For Lorenzen, it meant a $375 repair bill before she even had the car a month. "I haven't even made my first car payment yet," she said.

The good news: After we got involved, the dealer agreed to reimburse Lorenzen $275 of the $375 she paid for the wheel repair.

Her experience is a good lesson to all used car buyers to find out what that warranty really covers so you don't waste your money.


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