Protecting Your Investment in a Used Car

Purchasing a used vehicle can be a great way to get a reliable car or truck at an affordable price. Another benefit to buying used is that you don't need to worry about massive depreciation in the first year or two that you own the car. However, what can you do to protect the investment that you just made in your current vehicle?

Typically, if there is any portion of the manufacturer's warranty left when you purchase the vehicle, it transfers to you upon purchase. For example, if there was a year and 10,000 miles left on the original warranty, the manufacturer would honor that warranty until a year passes or 10,000 miles are added to the car.

Another option may be to purchase an extended warranty from the manufacturer. This enables you to get the same protection as the original warranty after it expires. Terms are negotiable and may be discussed when you purchase the vehicle. An extended warranty may be beneficial for those who finance the vehicle or need to own it for many years.

Finally, you could purchase a service agreement from an outside provider. Unlike a warranty, you submit a claim to be reimbursed for any work done to the vehicle. If the claim is approved, the mechanic is either paid directly or you are sent a check to cover your out-of-pocket cost. These agreements are great for older cars that aren't eligible for any type of warranty protection.