Buying a new or used car can be a stressful experience. That’s why it’s important to know in advance what your options and rights are in the event your vehicle experiences mechanical problems after you drive it off the lot.
Manufacturer’s warranties and vehicle service contracts might appear similar on the surface, but these consumer options provide very different types of coverage.
A manufacturer’s warranty is offered by the vehicle manufacturer and typically covers parts and labor for a period of time or up to a certain mileage level.
Manufacturer warranties are included in the purchase price, are comprehensive, and cover repairs at a licensed dealer.
If you are buying a late-model used vehicle or vehicle with low mileage, it might still have the remainder of the manufacturer warranty.
Vehicle service contracts are sometimes called an “extended warranty” but are not considered warranties as defined by federal law and usually do not provide the same type of coverage or protection as a manufacturer’s warranty.
A vehicle service contract’s terms should make clear the cost, what items are covered, if there is a deductible required and should explain the claims-reimbursement process for out-of-pocket costs.
Vehicle service contracts are not included in the purchase price of the vehicle. They can be purchased at any time through auto dealers or third-party providers.
If you purchase a new vehicle in South Carolina that has the same problems repeatedly (three repair attempts for the same problem or vehicle is out of service for 30 days), you might have recourse under the state’s “Lemon Law.”
Designed to protect consumers from defective vehicles, this law applies to problems that substantially impair the use or value of the vehicle. The defect must occur within the first 12,000 miles or 12 months.
If it is a lemon, the manufacturer has the option to replace the vehicle or to take back the vehicle and issue a refund. If the manufacturer opts to offer a refund, the refund must be for the full purchase price of the vehicle, less an allowance for the consumer’s use.
Take the time to understand the difference between manufacturer warranties and vehicle service contracts, so you can make the smartest decision for your unique situation.
If you purchase a defective vehicle that you believe may be covered under South Carolina’s Lemon Law, be sure to work with an attorney who has experience representing consumers and can advocate on your behalf.
Jannine M. Mutterer is an attorney at the law office of West Olivetti, LLC on Hilton Head Island. firstname.lastname@example.org.