Certified Pre-Owned Warranty vs. CarMax Warranty

There are so many uncertainties involved with buying a used car. How many miles until it needs a pricey repair? Has it been well-maintained? Is the seller telling me everything?

Buying a used vehicle with a warranty can help reduce your worries, especially when you buy from a reputable dealership like CarMax, or if you purchase a well-vetted, certified pre-owned car (CPO). A CPO warranty will be longer and more comprehensive, but a CarMax warranty may cost less overall. You’ll need to compare the total purchase price and the cost of comparable warranty coverage to find out which has the best deal for you.

Warranty basics

A car warranty guarantees that specific car repairs will be covered, including the cost of parts and labor, for a set number of years or miles. Warranties come in many shapes and sizes, so it’s important to understand the specifics of what your warranty covers.

New car warranties

Every manufacturer offers something different, but most new cars come with a warranty that covers three years or 36,000 miles, whichever comes first. You’ll likely have additional warranty coverage included in the price of the car too, such as a bumper-to-bumper warranty — also known as comprehensive coverage — or a corrosion or powertrain warranty.

You can also elect to buy additional or extended warranties if you want to be protected for longer or if you want more parts covered.

Used car warranties

When you buy a used car, there’s a chance it might be covered by a warranty. Here are the most common coverage scenarios for used vehicles:

• Manufacturer warranty: Relatively new cars (usually three years old or less) may still be covered under the original manufacturer’s warranty or by a manufacturer-backed extended warranty.
• Implied warranty: Depending on the laws in your state, a dealer’s guarantee that the car will function properly can serve as a warranty for as long as four years, even if that guarantee isn’t put in writing. Implied warranties may help you avoid buying a lemon.
• As-is: The vehicle has no warranty, so the buyer is fully responsible for any repairs from day one.

CarMax warranty: How it works

CarMax is a major used car dealer and auto lender that sells vehicles online and at more than 240 locations across the U.S. Every CarMax vehicle comes with a cash-back guarantee and a limited warranty, and undergoes a 125+ point inspection. If you’d like additional coverage, you can also purchase CarMax’s extended warranty option, MaxCare. Here’s a breakdown:

Money-back guarantee

CarMax’s Love Your Car Guarantee gives you 10 days to return the car if it doesn’t meet your expectations. There are no mileage restrictions, but the car must be in the same condition as when you bought it. After you make the return, your refund will be mailed to you within about two weeks.

Limited warranty

Every car comes with a CarMax limited warranty, regardless of make, mileage or age. The limited warranty covers the vehicle’s major systems for 90 days or 4,000 miles, whichever comes first.

MaxCare

For even more coverage, CarMax buyers can add a customized, MaxCare extended service plan, which will cover your vehicle for five years or 75,000 miles. MaxCare covers the following:

• The car’s major systems, including the engine, drivetrain, electrical and suspension
• 24/7 emergency roadside assistance
• $40/day rental car reimbursement for up to seven days
• $50 deductible discount at MaxCare service centers and RepairPal Certified shops

MaxCare comes with a list of items that are excluded from coverage, and any item not on the list is covered for repairs. Among the expenses that aren’t covered are regular maintenance and damage caused by misuse of the car.

MaxCare plans can be added to your auto financing, and while they may not increase your monthly payments by much, they can add thousands of dollars to your total loan amount. Plus, coverage will accrue interest just like the rest of the money you borrow, and you’ll still have to pay deductibles.

Certified pre-owned warranty: How it works

If you’re looking for peace of mind when you buy a used car, you could consider buying a certified pre-owned (CPO) vehicle.

CPO vehicles are usually less than five years old, are lightly used, have been thoroughly inspected and are covered by extended manufacturer warranties. They may still be under the original manufacturer’s warranty for a period of time after your purchase, too.

Each manufacturer offers different certified pre-owned warranty coverage, which may kick in after the original warranty expires or on the date of purchase. Here are a few examples:

• Audi: All Audi CPOs come with a 12-month/unlimited mileage warranty that covers 12 major systems. You’ll also have access to 24-hour roadside assistance and you won’t pay any deductibles.
• Hyundai: Certified used vehicles from Hyundai include powertrain and (if applicable) hybrid/EV battery coverage for 10 years/100,000 miles, along with roadside assistance for 10 years/unlimited miles.
• Nissan: Nissan’s pre-owned limited warranty covers 600 vehicle components for seven years/100,000 miles, but you may have to pay a $100 deductible per visit.

Which is better: CarMax or certified pre-owned warranty?

CarMax’s complimentary warranty might seem lacking when compared to a CPO warranty. While both options are included in the price of your car purchase, many auto manufacturers offer longer coverage than CarMax’s limited 90-day/4,000 mile plan.

On the other hand, CPOs are often thousands of dollars more expensive than comparable used cars, like the ones sold by CarMax. That’s mostly due to how thoroughly CPOs are inspected; many manufacturers complete a 160+ point inspection and reconditioning process on their CPOs. CarMax also conducts a thorough inspection on every vehicle, but its cars aren’t backed by the same manufacturer certification that CPOs receive.

Ultimately, you could save money and still find a reliable car by skipping a CPO and purchasing a used car through CarMax, even if you choose to pay extra for a MaxCare extended service plan. Deciding which option is best for you will come down to your budget and desired length of coverage. If you can afford the higher cost, a CPO warranty will cover future repairs for longer, hopefully giving you the most peace of mind.

Questions to ask when comparing warranties

The warranty might seem like an afterthought when you’re buying a car, but it can have a huge impact on your total cost to own.

Each warranty is different, so you’ll need to ask the seller some questions about the coverage in order to evaluate what it’s really worth. Asking the following questions can help you figure out how cost-effective a warranty is and whether you want to pay for additional coverage:

• What’s covered? What parts are covered? Do I have to go to specific locations to get covered repairs?
• What isn’t covered? What common repairs should I expect to pay out of pocket? Which portion of the repairs am I responsible for?
• How long does coverage last? How many years or miles are covered under the warranty? Are there ways I can accidentally void the warranty?
• Is the warranty transferable? If I sell the car, will the next owner get the remaining coverage? How do I transfer the warranty to the next buyer?
• How much does it cost? Is the cost of the warranty built into the sale price? What coverage is additional?
• How much is the deductible? How much will I pay per visit to the auto shop? Does it matter where I go for repairs?
• Who will pay for repairs? Is the repair cost covered up-front? If not, how does reimbursement work?