Warranties can come in as many varieties as there are colors under the sun. Need a policy that only covers the bare minimum and most expensive to replace parts on your vehicle? There is a warranty out there for you.
Do you want complete coverage and a guarantee to help you sleep at night knowing you are covered? There is a company out there who will gladly ensure you rest easy.
So what happens when the car you have coverage on is no longer meeting your wants and needs? What happens when you are ready for an upgrade?
Subsequently if you are purchasing a used car from the owner who is claiming to have a superb warranty on the vehicle, how do you know that you are getting that full coverage transferred to you?
A warranty transfer can be needed for a multitude of reasons, the most common of which is the buying and selling or simply the title transfer of a vehicle under warranty.
Many buyers and sellers include the warranty in the overall value of the vehicle and it can be reflected in the sales price. It is therefore imperative to note the terms of the warranty in question before you buy or sell the vehicle.
Are car warranties transferable?
The answer is yes, however like most things in this world, it’s just not that simple.
Certain types of warranties can indeed be transferred. Transferability of your warranty is based upon the terms of your contract with the company from whom you purchased your coverage. It is important to note that warranties are never transferable from vehicle to vehicle.
The coverage and price of the policy was designed for one specific car and therefore can not be applied to another. We can compare this to a health insurance policy. Your health insurance plan is formulated based on your medical records to date, your lifestyle, and your demographic.
A young, active and healthy non- smoker would not have the same rates or needs for coverage on a policy as someone with long standing health complications. The same goes for the maintenance and health of your vehicle!
These companies set their rates based upon their risk of having to pay out a claim. They require evidence that you have made the effort to maintain the car by keeping up with simple preventative measures like oil changes in an effort to curb this risk. Negligence of these maintenance items will void the contract. Some car warranties are transferable from person to person when concerning ONE vehicle.
Again, this depends on the type of warranty you purchased as well as the provider you bought from. Car warranties can be broken down into two categories and the processes for transfer are different between them. Before we get started you will want to know what type of warranty you own and the provider of the policy.
The two types of car warranties that a person could own are dealer/manufacturer warranties and extended warranties.
Manufacturer warranties which are exactly what they sound like, a warranty on your vehicle ensured by the manufacturer of your vehicle or the dealership where you purchased your car.
They are traditionally offered on new and like new vehicles and tend to have very few limitations to their coverage.
The other type of car warranty available to consumers is an extended warranty.
This variation is bought from a private company who is unaffiliated with the original sale of your vehicle. You have your choice of coverage and payment options and a rate is calculated based on an evaluation of the make, model and overall condition of your car.
Both dealer/ manufacturer and extended warranties can be transferred in most situations depending on the provider and terms of the plan you chose. The processes for the transfer of each type of warranty will differ depending on these terms as well.
Manufacturer Warranty Transferability
Most manufacturer warranties are what we consider “bumper to bumper” meaning they have very few exclusions. It’s pretty safe to say any unforeseen breakdowns within your warranty window will be covered with one of these bad boys.
Manufacturer warranties are typically active immediately after the sale of the car and will hold their coverage through a certain period of time or mileage count, whichever comes first. In many cases, these warranties are still active when the resale or transfer of ownership of the vehicle comes around.
For example, let's say your vehicle still has three years or twenty five thousand miles left on the warranty, but you are ready to upgrade to that new SUV you’ve been dreaming about.
You want to make sure that your future buyer is aware that your vehicle has a premium warranty that they will be able to take advantage of should any issues arise.
Marketing your car with an inclusive warranty adds value and can be an enticing add on to a prospective buyer. It can be extremely stressful buying a used car.
What if it breaks immediately and you lose your investment?
With a manufacturer warranty the secondary buyer can have peace of mind knowing the vehicle is covered should things go terribly wrong.
Transferring a warranty that was provided with the purchase of a new vehicle tends to be far less time consuming and tedious of a process than with an extended warranty. Typically the warranty provided is attached to the specific VIN number associated with the vehicle.
Because of the attachment to the vehicle and not the title holder the process is simple. In most cases no documentation is required. “Worst case” circumstances would be the new owner of the vehicle needing to send proof of title change to the manufacturer before being approved on a claim. It is truly that simple.
Extended Warranty Transferability
Next up we’ll be discussing extended warranties. These policies are purchased outside of the dealership and specific manufacturer of vehicle. Certain dealerships may also offer extended warranties as they partner with the companies who provide the policy.
Whether the dealership gets a perk or commission off this relationship with the warranty company aside, your policy is through the warranty company not who you purchased the vehicle through.
Extended warranties can be paired with manufacturer and dealer warranties as an add on to your coverage included with your vehicle purchase.
How do these warranties compare to the bumper to bumper style of dealerships? Well, for one these policies tend to be more customization than manufacturer warranties. With most companies there are coverage and payment options that are just right for your budget and vehicle. From motorcycles and scooters to older cars who want less of the bells and whistles covered, there is likely an extended warranty out there that fits your exact needs.
Extended warranties are purchased through private companies and there are several large competitors who are the most popular amongst consumers.Below we will discuss which of these companies offers transferable policies. The companies who sell the most policies in the industry are Endurance Auto Warranty, Carchex, Carshield and Protect My Car.
Whether you just need basic engine and transmission coverage or you want further protection on the seals and gaskets and electrical workings of your car there is a plan that fits your needs. Whether or not these plans are transferable when the car changes hands does vary.
Typically these plans are transferable but there are hoops to jump through to make this happen. Below you will find the fine print associated with the contracts of each on the warranty companies. Details of said “hoops” are included without the legal jargon.
If you are in the market to transfer the warranty of your vehicle, you can expect to face fees and administrative charges, paperwork, detailed proof of maintenance and services, title transfer documentation and time sensitive deadlines involving when the car was sold.
1: Endurance Warranty
The first of the four large extended warranty companies we will discuss today is Endurance Auto Warranty. Endurance offers five tiers of coverage: select premier is a category for high mileage vehicles; secure and secure plus are going to be the most affordable options which have the shortest wait period; superior has more wide-spread coverage; finally the supreme category for coverage will be most similar to a bumper to bumper warranty.
These warranties offered by Endurance are typically transferable should vehicle ownership change. The only catch is that there is a fifty dollar administrative charge or fee for the transference of the policy.
The original purchaser is the only person who can transfer the policy and the manufacturer warranty (if there is one) must also be transferred. Proof of this manufacturer warranty transfer must be shown before the extended warranty transfer can be authorized.
It is extremely important to note that the policy transfer MUST take place within thirty days of the sale or ownership transfer of the vehicle. If this does not occur then the terms of the contract will be voided. The contract also notes that this can vary state to state however looking at the various state addendums it seems that they are only modified to the cancellations sections of the contract.
With this being said it is encouraged to double check and make sure the state you live in is not an exception.
The following has been taken directly from the sample contract on Endurance Warranty’s website.
This is under the heading “Contract Holder’s Transfer Conditions” and is standard among their five policies.: “[This Contract, while in-force, may be transferred by the ORIGINAL Contract Holder to the subsequent owner of the Vehicle for a fee of fifty dollars ($50), payable to Us. The subsequent owner must also transfer the manufacturer’s warranty, if available.
Written evidence of all required maintenance services must be provided to Administrator upon transfer. Transfer is limited to an individual purchaser of the Vehicle (not a Dealer) and the title may not pass through a Dealer. All terms and conditions of the original Contract will apply to the transferee.
Approval of transfers is at the discretion of the Administrator and may be declined for any reason. Submission of a Transfer Application must be completed within thirty (30) days of the sale or transfer of the Vehicle to the subsequent owner. The Transfer Application may be obtained from the selling Administrator, or Dealership/Entity. Refer to Special State Requirements for any exceptions or additional requirements in relation to the transfer of this Contract. ] “.
Carchex is another of our top extended warranty dealing companies. Customization sets Carchex apart from its competitors.
Carchex breaks down their warranty offerings by several levels; bronze, silver, gold, platinum and titanium. Lengths of warranty terms, coverage and pricing vary among these options. Titanium being most similar to a “bumper to bumper” is the most inclusive plan.
Bronze having the least coverage and most affordability is a great option for certain consumers. All of Carchex’s warranties can be transferred if the terms of the policy are executed properly. Carchex, like Endurance, will charge a fifty dollar administrative processing fee, requires stringent documentation detailing servicing of the vehicle, a notarized change of title and a completed transferal application which must be obtained from Carchex by the original policy holder and completed within thirty days of the sale of the car. Negligence to provide any one of these items will void the warranty and prevent the approval of future claims.
The following excerpt has been taken directly from the sample contract found under the titanium contract brand:
Only the original purchaser may transfer this contract. The right to a refund is not transferable. 2. The original contract purchaser must contact the administrator and submit all of the following information / documentation at the time of transfer request in order to transfer a contract. a.) Administrative processing fee of fifty dollars ($50.00), a completed transfer application (available from the administrator) initiated by the original contract purchaser and a copy of this contract; and b.) A copy of the proper documentation evidencing change of ownership and mileage at date of sale, including a notarized bill of sale signed by both parties; and c.) The original contract holder must provide the new owner and the administrator with copies of all receipts evidencing required maintenance has performed as described in the “vehicle maintenance requirements” section of your contract; 3. This contract may not be transferred to another vehicle. It may only be transferred to a different private owner of the same vehicle; 4. The vehicle is subject to inspection (at our discretion and your expense) and transfer must take place within thirty (30) days of change of vehicle ownership; 5.You may not transfer this contract to a vehicle dealer or to the customer of a vehicle dealer, nor may this contract be transferred to a commercial use application user if the commercial use surcharge was not paid at the original contract purchase;]”
Protect My Car
Protect My Car also offers customization packages to its customers and has a 4.8 customer review rating on the Better Business Bureau.
The policies offered are more selective than some of its competitors however we offer more flexible payment options which makes an extended warranty affordable for just about any automobile owner.
The policies we offer include; driveline for vehicles with over eighty thousand miles and includes the major repairs most older vehicles inevitably need; select is the second tier of coverage we offer and is more comprehensive, it is perfect for vehicles with over fifty thousand miles; the final coverage option we offer is the Supreme policy.
The supreme policy is perfect for new cars and those who want to keep their car for longer than their manufacturer's warranty will cover.
With all of our plans there is a simple one hundred dollar deductible and we will cover the full cost of your repair. Similar to its competitors, our warranties are transferable in the event of a resale or title transfer.
The following quote was taken from a sample policy on our website. It's the standard among all three policies.
“[ TRANSFER OF YOUR VEHICLE SERVICE CONTRACT: This CONTRACT cannot be transferred to another VEHICLE. It can only be transferred to a different private owner of the same VEHICLE; a. The new VEHICLE is subject to an inspection (at OUR discretion and at YOUR expense) and the transfer must take place within fifteen (15) days of change of VEHICLE ownership. b. YOU may not transfer this CONTRACT to a VEHICLE dealer, or to the customer of a VEHICLE dealer, nor may this CONTRACT be transferred to a commercial use application user if the commercial use surcharge was not paid at the time of the original CONTRACT PURCHASE DATE. c. All remaining underlying warranties must be transferred to the new owner. d. The new CONTRACT holder will be bound by the TERMS AND CONDITIONS of this CONTRACT. e. If the original owner/first retail purchaser full warranty does not transfer to subsequent owners, this CONTRACT coverage will not apply to any MECHANICAL BREAKDOWN or FAILURE that would have been covered to the original owner/first retail purchaser under the manufacturer’s original owner/first retail purchaser full warranty. ]”
In closing it is highly safe to assume the warranty of a car will transfer smoothly with change of ownership. The exceptions to this are voided contracts due to the failure to adhere to policy terms detailed in your contract.
The most common of these include administrative charges and fees, failure to document maintenance and service to the vehicle, attempting to transfer the policy after the alloted thirty day window has expired, lack of completion of the transference application through your company, and lack of a notarized proof of vehicle sale.
The best way to know if your warranty can be transferred to the new owner of your car is to read the fine print of your contract and go through the process of transfer well in advance of your thirty day window. Every contract will have a section on transferability which details the terms under which the contract may and may not be transferred
Be sure to check the local conditions of the state in which you live as well. These are typically found at the end of the contract. It is also recommended to call the company and ask questions involving payment schedule, coverage, cancellation and refunds before agreeing to take over the warranty on a vehicle.
If the new owner of your vehicle decides that he/she does not wish to take over your policy, be sure to cancel in a timely fashion as you may be entitled to a hefty refund. Sometimes in the range of thousands of dollars!