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Certified Pre-Owned Warranty vs. CarMax Warranty

A warranty might be your biggest worry if you’re thinking about buying a used car. Though buying used is almost always cheaper (and smarter) than buying new, you don’t want to buy a car and then shell out a bunch of cash to cover repairs a couple months later.

New cars should not only require fewer repairs, they typically come with manufacturer warranties. Used cars might have a warranty, too, though it may be for a shorter period of time. Both certified pre-owned (CPO) cars and CarMax cars are types of used vehicles that come with a type of warranty, but which one is best? A CPO warranty is going to be longer but the car itself may be more expensive. Here we’ll explain the differences between a certified pre-owned warranty versus a CarMax warranty — what they are, how they work and other warranty options.

Warranty basics

Before we dive into the certified pre-owned warranty versus CarMax warranty, here’s a brief explainer on warranties in general.

New car warranties. All new cars have a warranty from the manufacturer. The manufacturer’s warranty is the automaker guaranteeing that the car will work like new for a set amount of time and miles — or they’ll fix it for you free.

Used car warranties. The original, new car warranty may be expired by the time it’s sold as a used car. Here are some of the types of warranties you may see.

  • Powertrain: This type of warranty covers the things that make the car go: engine, transmission and drive axle.
  • Basic: Sometimes referred to as a “bumper to bumper” warranty, this is a warranty that covers all the basics including the air conditioner, heater, radio, suspension and much more.
  • High-tech: Covers everything a basic warranty does, plus any high-tech components the vehicle may have, such as a touch screen or navigation system.
  • Limited: This simply means that not everything is covered under the warranty. There may be some things that you would have to pay for or fix yourself if they break. You may see a “basic, limited warranty.” This could mean that the basic warranty excludes the electrical switches or something of the sort. Read a limited warranty carefully.
  • Extended: Extended warranties are also called vehicle service contracts (VSC). The provider promises to service your vehicle — parts and labor — to fix any problem that’s covered under the contract. An extended warranty could offer any type of coverage, from basic to high-tech and comes with an extra cost. We talk more about them below.
  • Implied. Consumer protection laws, such as the Magnuson-Moss Act, basically says that if you buy something, you expect it to work as advertised. Implied warranties could help protect you from a lemon car.
  • As-Is. This means the car has no warranty. There is no guarantee on any part of the car, and anything that breaks will be the new owner’s responsibility to fix.

CarMax warranty: How it works

CarMax is a chain of stores that sell used cars only, the largest of its kind. It offers all types of automaker brands with “no-haggle” car prices — the price on the car is how much it costs — though you should always check that it’s still a fair price by comparing it with what NADAguides or Kelley Blue Book says the car is worth.

Any vehicle you buy at CarMax comes with a seven-day money back guarantee and a free, limited warranty for a short time. You may also be able to buy an extended warranty, either through CarMax or on your own through an extended warranty provider.

The free one. The free warranty CarMax provides on all of its cars is a 90-day, 4,000-mile limited warranty. You do not have to pay anything extra to get this coverage. This is a much shorter coverage than what a certified pre-owned warranty offers.

The one you could buy. You could buy CarMax’s extended warranty, Maxcare. It’s much like any extended warranty that you could get on almost any car, including a certified pre-owned one. Maxcare is a basic warranty, meaning it’s “bumper-to-bumper” and covers most things in the car, including the following.

  • Powertrain: Engine, transmission and drivetrain
  • Electronics and electrical systems: Includes the radio and the wiring
  • Steering
  • Suspension: The parts of the car that suspend the cabin above the chassis.
  • Climate control and cooling system: Heating and AC

How much does Maxcare cost? The price of Maxcare depends on how much time and how many miles you want the warranty to last, as well as the type of car and its condition. Because of this, you won’t know the exact price of Maxcare until you select a vehicle and the type of warranty coverage coverage you want.

You could expect the price of Maxcare to be on par with similar extended warranties you could get through a CPO dealer or from an extended warranty company. For example a $5,000 warranty might be for 6 years/75,000 miles on a Porsche. A $1,700 warranty might be for a 3 year/36,000 mile warranty on a Nissan.

Certified pre-owned warranty: How it works

A certified pre-owned warranty comes from the car manufacturer and is included in the price of the car. You can’t buy a certified pre-owned warranty separately from the car, so it shouldn’t cost you any extra on top of the car price. Almost every certified pre-owned warranty will be longer than the free CarMax warranty in both time and miles.

However, certified pre-owned (CPO) cars are usually more expensive than other used cars because they have a longer warranty and may be newer or in better shape. They usually have to pass a rigorous inspection done by mechanics certified by the specific automaker. This means that to get a CPO vehicle, you have to go to the dealership of the car brand you want — you couldn’t get a Toyota CPO vehicle at a Ford dealership. You could, however, get a regular used Toyota at a Ford dealership and buy an extended warranty, similar to what you could do at CarMax.

What automakers offer certified pre-owned warranties? Almost every automaker offers CPO cars with certified pre-owned warranties.

What does a certified pre-owned warranty cover? All certified pre-owned warranties cover at least the powertrain (engine, transmission and drive axle). Here’s a list of the powertrain certified pre-owned warranty that major automakers offer.

Certified Pre-Owned Powertrain Warranties
Brand Time Distance
Acura 7 years 100,000 miles
Alfa Romeo 7 years 100,000 miles
Audi 1 to 5 years unlimited
BMW 1 year unlimited
Chrysler 7 years 100,000 miles
Dodge/Ram 7 years 100,000 miles
Ford 7 years 100,000 miles
Fiat 7 years 100,000 miles
General Motors 6 years 100,000 miles
Honda 7 years 100,000 miles
Hyundai 10 years 100,000 miles
Infiniti 2 to 6 years 75,000 miles to unlimited
Jaguar /Land Rover 7 years 100,000 miles
Jeep 7 years 100,000 miles
Kia 10 years 100,000 miles
Lexus 2 years unlimited
Lincoln 6 years 100,000 miles
Mazda 7 years 100,000 miles
Mercedes-Benz 1 year unlimited
Nissan 7 years 100,000 miles
Subaru 10 years 100,000 miles
Toyota 7 years 100,000 miles
Volkswagen 1 to 2 years 12,000 miles to unlimited
Volvo 1 year unlimited

Information current as of publication date.

Are there “bumper-to-bumper” certified pre-owned warranties? Yes, some automakers offer a basic coverage on top of the powertrain coverage. But the coverage of a basic certified pre-owned warranty is usually shorter than that of a powertrain certified pre-owned warranty. We’ve seen one-year, 12,000-mile basic or limited CPO warranties offered by such automakers as Honda.

Extended warranties for purchase

Extended warranties are also called vehicle service contracts (VSC) and can be purchased separately from the vehicle. The CarMax warranty Maxcare is an example of an extended warranty.

Who sells extended warranties? You could buy an extended warranty at a dealer or directly from a third-party company.

When could you get an extended warranty? You might be able to get an extended warranty at any time. However, the older your car is and the more miles it has, the more expensive a warranty will be.

How much is an extended warranty? Just like the CarMax warranty, the price depends on what type of car you have, how old it is, and the warranty you want. Prices usually range between $1,500 and $5,000.

Questions to ask when looking at warranties

Warranties can be tricky to discuss, but you don’t have to be a professional mechanic to understand. Here are some questions you could ask to get a better understanding:

What’s covered? Does it only offer powertrain coverage or does it also offer basic coverage?

How long does it last? If the warranty lasts five years, is it five years from the day you buy the car or until the car is five years old?

How many miles does it last? If the warranty is for 50,000 miles, is that 50,000 miles on top of the car’s current mileage or until the car has 50,000 miles total?

What’s the deductible? Will you have to pay $50 every time the car has a problem or $200? And is the deductible charged every time the car goes into the shop or will you be charged the deductible for every problem the mechanic has to fix? If the latter is true, you may have to pay the deductible three times if the car goes into the shop once with three problems. Deductibles typically apply to extended warranties.

What’s the price? Don’t let the person trying to sell an extended warranty to you say the warranty costs just $20 a month and can be included in your car payment. If you have a six-year auto loan, $20 a month can add up to $2,000 with interest. Ask what the total price is. You almost never have to buy an extended warranty in order to get financing for the car. You have the right to refuse it if you don’t want it.

If you do want it, you could finance it at that time or buy it with cash. You could get one at almost any time; you could even shop around and price compare. The drawback to waiting is that you may have to pay cash for it later; you won’t be able to finance the price of the extended warranty into your car loan after your car loan is finalized.

The bottom line

A certified pre-owned warranty will last longer than the CarMax warranty that you get for free. However, in both cases, you probably will have the option to get an extended warranty. The CarMax extended warranty is called Maxcare and, like any extended warranty, the price depends on the car and the coverage you want. Whatever warranty you’re looking at, keep coverage, the amount of time and/or miles covered, deductible and price in mind.

 

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