Buying a previously owned vehicle that is 2-3 years old or more can be a great way to save money because you can get a great deal. Vehicles usually depreciate between 20 and 30% in the first year, and 15-18% after that. This means that a very well maintained 3 year old car that was $60K new may only cost $28,240 after 3 years-which can make it a very wise buying decision.
Unfortunately, in many cases the manufacturer’s warranty is at or near it’s expiration date and/or mileage. This means if a major breakdown occurs you could be left holding the bill. Many people finance used cars, so the prospect of paying for a major repair while you still have a monthly car payment can be a tough pill to swallow. This is why many people look for used car warranties-they want to avoid the risk of a mechanical breakdown breaking the bank and leaving them stranded.
Can you buy an extended warranty for a used car in California?
To get right to the point; if you are looking to get a used car covered against major repairs by extending coverage similar to an “extended warranty”, there are likely some excellent options. Choosing the right option for you can save you thousands of dollars on repairs.
However, there are a number of factors to consider, and not all used vehicles can be covered by every plan.
For example; here at olive® we provide extended coverage for previously owned vehicles in California through “mechanical breakdown insurance” and offer 3 different levels of coverage-from basic to comprehensive. If your car is 10 years old or newer, and you have less than 140,000 miles you may want to take a few seconds to get a quote here: Get an Instant Online Quote
If you are considering buying a used car that has under 140,000 miles and is a 2012 model or newer, get a free quote for one of our "extended car warranty solutions".
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Want to learn more? Good for you! Keep on reading…
There are a number of options for getting “extended coverage against mechanical breakdowns” on previously owned vehicles. Where you live, how old your car is, how many miles it has been driven and even the make or model of your car can make a difference as to whether or not your car is eligible to be covered against breakdowns. California has some unique rules and regulations that help people like you get the right coverage and avoid paying too much.
Auto Insurance vs. Covering “Breakdowns”
Typical auto insurance which you are required to have in California does not cover mechanical breakdowns. Unless, of course, you have comprehensive insurance and those mechanical breakdowns were caused by an accident, theft, hail, a tornado, flood, or some other kind of natural or human caused disaster. Of course, you would need to check your insurance policy to see specifically what coverage you have, and what your deductible is. In many cases, insurance policies include towing and roadside assistance, which can help you get to a repair center if your car breaks down, but you will still have to pay for your repairs if you do not have a warranty or similar product.
Many mechanical breakdowns are initially covered for a new car by the factory warranty. These warranties usually cover you for a certain amount of time (number of years) or miles driven before they expire. Sometimes a manufacturer will have a “recall” during the lifetime of a vehicle that can come up long after your warranty expires and in those cases you may be covered. My son’s 2003 Acura MDX had a recall that was fully paid for at over 250,000 miles, but generally when your warranty expires you are on your own for any type of repair or regular maintenance.
If you buy a used car that is just 1-3 years old it may likely still have some time and mileage left on the manufacturer’s warranty that may have transferred to you, or they may provide some sort of warranty at the time of purchase. If it does not, you are likely responsible for all of the maintenance from day one.
How Do You “Extend Your Warranty” on a Used Car?
There are 3 major, usually dependable types of extended coverage for “used” or previously owned vehicles. In order to help you determine which is right and potentially available for you, we will summarize these 3 options:
By definition, a “warranty” can only be provided by the manufacturer or the dealer. Sometimes you will hear of companies selling a warranty outside of the manufacturer, but these are usually unregulated and may not be as dependable as a manufacturer’s warranty. They may be just what you need, but you should do your due diligence before you buy or finance one.
In fact, before you buy any type of vehicle extended coverage you may want to visit the California Department of Insurance Website.
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Vehicle Service Contracts (VSC)
In California, a dealer may also offer you a “Vehicle Service Contract” on a new or used car, which can be very similar to a warranty. Some of these may work very well for your needs, but there are two things to consider with VSCs in california:
You can only buy them from the dealer at the time of purchasing your vehicle. This can make some people uncomfortable because they feel “put on the spot” by the dealer to make a decision.
VSCs are not regulated (like insurance is) which means they may be less reliable than other options, such as “mechanical breakdown insurance”, which I will address next.
Bottom line is that you are wise to educate yourself before making a decision, and may not feel like you had the time to do that when it came to decision time at the dealer. If you did not buy one from the dealer when you had the chance, no worries-you have other options…
Mechanical Breakdown Insurance (MBI) vs. Vehicle Service Contracts (VSC)
Mechanical Breakdown Insurance (MBI)
If you did not buy an extended warranty or VSC from the dealer, your only option in California is to consider mechanical breakdown insurance. There are plenty of benefits to an MBI, and depending on the company you choose you may have some excellent choices for cars as old as 11 or more years, and that have up to 140,000 miles or more.
Buying a vehicle service contract is similar to buying mechanical breakdown insurance. However, when you buy a vehicle service contract it is backed by the dealer or the VSC provider, which, in California, are not as regulated and therefore may not be as dependable as a mechanical breakdown insurance policy. Coverage can only be as good as the financial strength of the backer, and due to a lower standard of regulation in California for VSCs, VSCs may not have the backing you should be looking for.
Why Choose Mechanical Breakdown Insurance?
In California, when you buy mechanical breakdown insurance your policy is backed by an insurance company. This helps to make sure you get the coverage you expect without paying too much. If you buy directly from the insurance company you will very likely get the most coverage for your money, and can rest assured that the MBI will be there when you need it to cover an expensive repair.
Where to Buy Mechanical Breakdown Insurance
MBI policies can be sold by some credit unions, banks, insurance agents, and directly by insurance companies, like olive®. Unlike VSCs which can only be purchased from the dealer at the time of purchase, you can purchase mechanical breakdown insurance anytime over the Internet. In fact, with olive®, you can easily purchase, track and manage your mechanical breakdown Insurance online. It takes less than 2 minutes to get a quote, you are covered within 24 hours, and you don’t even need your VIN!
Keep in mind, if you are considering buying mechanical breakdown insurance, it is important that you do the following:
Whether buying directly from the insurance company or an agent, you need to make certain they are licensed by the CDI (California Department of Insurance).
You can do that at the “Company and Agent/Broker Information” page of CDI’s website, at www.Insurance.ca.gov
You should Never buy MBI unless you confirm with the CDI that both the insurance company and any agent offering the MBI are properly licensed in California.
If you are looking to get a quote today please don’t hesitate to get a quote for olive®-it’s quick, easy and you can be covered by midnight tonight.
More Topics for Used Vehicle Owners
How Old of a Car Can Mechanical Breakdown Insurance Cover? (coming soon)
What Does Mechanical Breakdown Insurance Cover? (coming soon)
meet the author
I have been in digital marketing since 1997, which is the first year I was ranking websites via “SEO”. I was one of the first 350ish people in the US to become advanced Google Adwords certified back in 2003. I have been working on all things digital marketing since 1997, including programmatic, search, display, email marketing, conversion optimization, marketing automation, and messaging. I have been working in the mechanical breakdown insurance/vehicle service contracts/extended car warranty industry since 2017 and helped build the new olive® brand starting in the summer of 2019. My wife and I live in the Denver area with 2 teenage daughters at home, and we have 2 sons and another daughter who are grown and living on their own. We enjoy all kinds of music, snowboarding, skiing, soccer, hiking and biking throughout Colorado as well as travelling across the US and around the world every chance we get.