Used Cars and Warranty Protection
by Steve Cypher on Thursday, June 18th, 2009When buying a used car with a bad credit car loan you need to pay close attention to the sticker posted on the window.
The Buyer’s Guide
At Auto Credit Express, we specialize in helping car buyers with bad credit get their auto credit reestablished with a bad credit car loan. Because we feel that these kinds of buyers are especially vulnerable to large car repair bills, we also think that looking at the cost of and considering an extended service contract is usually a good idea.
With that in mind, here is what the Federal Trade Commission has to say about the information contained on the Buyer’s Guide that is required by law to be posted on the window of a used car:
From the FTC
When shopping for a used car, look for a Buyer’s Guide sticker posted on the car’s side window. This sticker is required by the FTC on all used cars sold by dealers. It tells whether a service contract is available. It also indicates whether the vehicle is being sold with a warranty, with implied warranties only, or “as is.”
* Warranty. If the manufacturer’s warranty is still in effect on the used car, you may have to pay a fee to obtain coverage, making it a service contract. However, if the dealer absorbs the cost of the manufacturer’s fee, the coverage is considered a warranty.
* Implied Warranties Only. There are two common types of implied warranties. Both are unspoken and unwritten and based on the principle that the seller stands behind the product. Under a “warranty of merchantability,” the seller promises the product will do what it is supposed to do. For example, a toaster will toast, a car will run. If the car doesn’t run, implied-warranties law says that the dealer must fix it (unless it was sold “as is”) so that the buyer gets a working car. A “warranty of fitness for a particular purpose” applies when you buy a vehicle on a dealer’s advice that it is suitable for a certain use, like hauling a trailer. Used cars usually are covered by implied warranties under state law.
* As Is - No Warranty. If you buy a car “as is,” you must pay for all repairs, even if the car breaks down on the way home from the dealership. However, if you buy a dealer-service contract within 90 days of buying the used car, state law “implied warranties” may give you additional rights.
Some states prohibit “as is” sales on most or all used cars. Other states require the use of specific words to disclaim implied warranties. In addition, some states have used car “lemon laws” under which a consumer can receive a refund or replacement if the vehicle is seriously defective. To find out about your state laws, check with your local or state consumer protection office or attorney general.
The Bottom Line
If you decide not to purchase a service contract, pay close attention to the boxes checked on the “Buyers Guide.” You should also familiarize yourself with the laws of your state pertaining to “as is” sales, as this could make a big difference if you run into trouble later on.
