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Consumer Lemon Law

Do You Need an Extended Car Warranty if You Have The Lemon Law?

When buying a new car, an extended car warranty is always offered and many consider it an “upsell” from the dealership. Many see it as overkill since the manufacturer’s warranty covers all the essential components of the vehicle. 

In this article, we will debunk the myths surrounding extended car warranties and provide a clear understanding of lemon law protection, to add some clarity on the true value of buying an extended warranty.

Lemon Law criteria

Table of Contents

Is Buying an Extended Car Warranty a Scam? 

Extended car warranties have gained a reputation for being unnecessary or even a scam. However, it is important to separate fact from fiction when it comes to these warranties. Firstly, extended car warranties provide coverage beyond the manufacturer’s warranty, protecting against costly repairs and component failures. Contrary to popular belief, they are not limited to brand-new vehicles and can be purchased for used cars as well.

Extended car warranties offer little value

Another common misconception is that extended car warranties are expensive and offer little value. While it is true that the cost of an extended warranty can vary depending on factors such as the make and model of the vehicle, they can ultimately save consumers money in the long run. Repairs on modern vehicles can be complex and expensive, and having an extended warranty can provide peace of mind knowing that these costs are covered.

Extended warranties have strict limitations

Lastly, some people believe that extended car warranties are not worth it because they have strict limitations and exclusions. While it is true that certain parts or conditions may not be covered, reputable extended warranty providers offer comprehensive coverage that caters to the needs of the consumer. It is essential to carefully review the terms and conditions of the warranty to ensure that it aligns with one’s requirements.

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Do You Need an Extended Warranty if There’s The Lemon Law?

The Lemon law protects consumers who unknowingly purchase defective vehicles, often referred to as “lemons.” Extended warranties cover repairs over and above what the manufacturer warranty covers.

The extended warranty can help you cover expenses like roadside assistance, towing services, and rental car reimbursement if your vehicle’s defect keeps affecting its performance.

Lemon Laws provide consumers with the right to seek a replacement vehicle, a refund, or compensation if their newly purchased vehicle has significant defects that cannot be adequately repaired.

Extended car warranties and lemon law protection offer valuable options to consumers when it comes to protecting their investment in a vehicle. Whether considering an extended warranty or being aware of lemon law rights, both options have their value.

Evaluating the Need for an Auto Service Extended Contract

Before investing in an auto service contract, consider the following:

Review Your Existing Warranty Coverage

Ensure you're not paying for redundant coverage by thoroughly reviewing the terms of your vehicle's existing warranty. This step helps identify what aspects of your vehicle are already covered and for how long, allowing you to make an informed decision about whether an auto service contract offers value.

Analyze the Cost Versus Benefit

The costs of auto service contracts can vary widely, from several hundred to several thousand dollars, not including possible deductibles. Weighing these costs against the potential benefits is crucial. Consider factors such as the reliability of your vehicle, the cost of common repairs, and how long you plan to keep the car.

Understand the Coverage Details

Pay close attention to what the contract covers. Look for any exclusions that might limit coverage based on the type of repair, the reasons for the repair, or the locations where the repair can be performed. These details can significantly impact the usefulness of the contract.

Extended Car Warranty FAQs

An extended car warranty provides coverage for vehicle repairs and malfunctions after the original manufacturer’s warranty expires, offering various levels of protection. In contrast, lemon laws are designed to protect consumers from defective vehicles that fail to meet quality and performance standards within a specific timeframe, even if the issue occurs under an extended warranty.

Yes, in California, vehicles that develop warranty-covered defects within the manufacturer’s original or extended warranty period may be eligible for lemon law protection. This means a vehicle can still be considered a lemon under the law even if the issues arise during the term of an extended warranty.

An extended warranty itself does not affect the eligibility of a vehicle for lemon law claims. The key factor for a lemon law claim is whether the vehicle has a defect covered under warranty that substantially impairs its use, value, or safety, regardless of whether the coverage is from the original or an extended warranty.

The Magnuson-Moss Warranty Act (MMWA) recognizes service plans or extended warranties if purchased within 90 days of acquiring a new or used vehicle. While this federal law does not specifically dictate lemon law protections, it ensures that consumers are protected under the terms of any service contract or extended warranty, reinforcing the rights against defective merchandise.

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