You bought a used car, and for a few days everything felt fine.
Then a warning light came on, a noise started or the car would not start at all.
The first question most drivers ask is simple: who pays for this?
The answer depends on paperwork you probably signed in a hurry.
This guide explains how used car warranties work for dealer sales, what the Buyers Guide means and which steps give you the best chance of a fair fix.
Start With the Buyers Guide
Dealers have to display a Buyers Guide in every used car they offer for sale.
They also have to give it to you after the sale, as part of your paperwork.
The Federal Trade Commission explains that the guide tells you whether the car is sold as is or with a warranty.
It also shows what percentage of the repair costs the dealer will pay under any warranty.
Find your copy before you call anyone.
It is the single most important document for the question of who pays.
Here is the key point many buyers miss.
The Buyers Guide overrides anything in your sales contract.
If the guide says the car comes with a warranty and the contract says as is, the dealer must give you the warranty described in the guide.
The Military Consumer guide on used car warranties makes the same point and tells buyers to keep the final guide that was posted in the vehicle.
Dealers in Maine and Wisconsin use their own version of the guide, so the layout may look different there.
What As Is Really Means
An as-is sale means the dealer will not pay for any problems or repairs after the sale.
You take on the risk of anything that goes wrong once you drive away.
When a dealer sells a car this way, the box next to "As Is - No Dealer Warranty" on the Buyers Guide must be checked.
This is why a breakdown after an as-is sale is hard to recover from.
In most cases, the repair bill is yours.
There is one important exception to watch for.
If the salesperson promised to fix something or to cancel the sale if you were unhappy, that promise needs to be in writing.
The FTC advises that verbal promises should be written on the Buyers Guide.
Spoken promises are difficult to enforce, and the guide itself reminds buyers of that.
If you have a written promise, bring it to the dealer when you ask for the repair.
Rules for as-is sales vary by state.
Your state attorney general can tell you which disclosures are required where you live.
Implied Warranties: Protection You May Not Know You Have
Not every used car without a written warranty is sold as is.
If a used car does not come with a written warranty, it is still covered by implied warranties, unless the sale was as is.
Implied warranties are unspoken, unwritten promises from the dealer to the buyer.
The most common one is the warranty of merchantability.
It means the dealer promises the car will do what it is supposed to do, which is to run.
It covers the basic functions of a car, not every small thing that could go wrong.
A second type is the warranty of fitness for a particular purpose.
It applies when you buy a car based on the dealer's advice that it suits a specific job.
For example, a dealer who says a truck can tow your trailer is giving an implied promise that it can do that.
The catch: you may need to show the problem was already there
A breakdown after the sale does not automatically mean the warranty of merchantability covers it.
According to the FTC, you will need to prove that the problem or defect existed at the time of the sale.
The dealer may disagree and refuse to pay.
That is why records matter so much.
The FTC notes that implied warranty coverage can last as long as four years, but the length varies from state to state.
A lawyer or your state consumer protection office can explain the rules where you bought the car.
Check Every Warranty and Contract You Have
Before you assume you are on your own, look at every document from the sale.
You may have more coverage than you remember.
- Dealer warranty. It can be full or limited, and it may cover only certain systems. Most used car warranties are limited.
- Manufacturer's warranty. A newer used car may still be covered. The Buyers Guide may note this in the "Systems Covered/Duration" section.
- Service contract. This is often called an extended warranty, but it is not a warranty. It is a separate promise to perform or pay for certain repairs.
To confirm a manufacturer's warranty, call a dealership for that brand.
Have the car's Vehicle Identification Number ready when you call.
There is also a rule that surprises many buyers.
If you bought a service contract from the dealer within 90 days of buying the car, the dealer cannot remove implied warranties on the systems that contract covers.
So an as-is car with a dealer service contract on the engine may still have implied warranty protection on the engine.
The FTC explains this rule in its guide to auto warranties and service contracts.
What About Returning the Car?
Many buyers believe they have three days to return any car.
That is not true under federal law.
Federal law does not require dealers to give you three days to cancel and return the car.
Some states do require a right to cancel.
In other states, a return right exists only if the dealer chooses to offer one.
Dealers may call it a cooling-off period, a money-back guarantee or a no-questions-asked return policy.
If the dealer offered a return policy, find it in writing and check the deadline right away.
Your state attorney general can tell you whether your state has a cancellation rule.
Step by Step: What to Do After the Breakdown
Acting quickly and keeping records gives you the strongest position.
- Stop driving if it is unsafe. A car with brake trouble, overheating or smoke should be towed, not driven.
- Gather your paperwork. Find the Buyers Guide, the sales contract, any warranty documents, any service contract and the return policy.
- Write down what happened. Note the date, the mileage, the symptoms and when they started.
- Get a written diagnosis. Ask a mechanic for a written report that names the problem and estimates the cost.
- Contact the dealer in writing. Explain the problem, cite the warranty or written promise you rely on and ask for a specific fix.
- Follow the warranty instructions. If a warranty or service contract applies, use its process to get service.
- Keep copies of everything. Save emails, letters, receipts and repair orders.
If the mechanic's report suggests the problem was present before you bought the car, mention that in your letter.
It supports a claim under an implied warranty.
If the Dealer Says No
Sometimes you cannot work it out with the dealer.
The FTC lists several options when a warranty dispute stalls.
- Manufacturer-backed warranty. Contact a dealership for that brand, which can decide warranty service and repairs.
- State attorney general. Consumer protection staff there handle complaints about car sales.
- Dispute resolution. Many warranties require you to try a dispute resolution organization before you sue.
- Small claims court. You can often resolve disputes involving smaller amounts without a lawyer. The court clerk can explain the dollar limit in your state.
Under the federal Magnuson-Moss Warranty Act, you can sue based on a breach of express warranties, implied warranties or service contracts.
If you win, you may recover reasonable attorney's fees and court costs.
A lawyer can tell you whether the law applies to your situation.
How to Avoid This Next Time
The best protection happens before you sign.
Read the Buyers Guide on the window and ask the dealer to explain anything unclear.
Get every promise written on the guide itself.
Pay for an independent mechanical inspection before you buy, even if the car is certified.
The FTC notes that a vehicle history report may list accidents and flood damage, but it typically will not list mechanical problems.
Ask the mechanic for a written report with repair estimates, and use it to negotiate.
If a dealer will not allow an independent inspection, consider shopping somewhere else.
The Bottom Line
When a used car breaks down soon after the sale, the Buyers Guide decides most of the answer.
An as-is sale usually leaves the bill with you, unless you have a written promise.
A sale without a written warranty may still carry implied warranties.
A dealer service contract bought within 90 days can also keep implied warranties alive on the covered parts.
Gather your papers, get a written diagnosis and put your request in writing.
If that fails, your state attorney general, dispute resolution or small claims court can help.
Sources and Further Reading
- Federal Trade Commission: Buying a Used Car From a Dealer. Source for the Buyers Guide rules, as-is sales, implied warranties, the 90-day service contract rule, return policies and dispute options.
- Military Consumer: The Buyers Guide and Warranties for Used Vehicles. Supports the point that the Buyers Guide, not the sales contract, determines the warranty you get.
- Federal Trade Commission: Auto Warranties and Auto Service Contracts. Explains the difference between a warranty and a service contract.