• Anyone who owns the vehicle during the warranty period is entitled to warranty service.
• Warranty service will be provided free of charge, including such costs as removing and reinstalling a covered system.
• You have the choice of a replacement or a full refund if, after a reasonable number of tries, the dealer cannot repair the vehicle or a covered system.
• You only have to tell the dealer that warranty service is needed in order to get it, unless the dealer can prove that it is reasonable to require you to do more.
• Implied warranties have no time limits.

If any of these statements doesn’t apply, the warranty is limited. A full or limited warranty doesn’t have to cover the entire vehicle. The dealer may specify that only certain systems are covered. Some parts or systems may be covered by a full warranty; others by a limited warranty.

The dealer must check the appropriate box on the Buyers Guide to indicate whether the warranty is full or limited and the dealer must include the following information in the "Warranty" section:

• the percentage of the repair cost that the dealer will pay. For example, "the dealer will pay 100 percent of the labor and 100 percent of the parts . . .";
• the specific parts and systems—such as the frame, body, or brake system—that are covered by the warranty. The back of the Buyers Guide lists the major systems where problems may occur;
• the warranty term for each covered system. For example, "30 days or 1,000 miles, whichever comes first"; and
• whether there’s a deductible and, if so, how much.

You have the right to see a copy of the dealer’s warranty before you buy. Review it carefully to determine what is covered. The warranty gives detailed information, such as how to get repairs for a covered system or part. It also tells who is legally responsible for fulfilling the terms of the warranty. If it’s a third party, investigate their reputation and whether they’re insured. Find out the name of the insurer, and call to verify the information. Then check out the third-party company with your local Better Business Bureau. That’s not foolproof, but it is prudent. Make sure you receive a copy of the dealer’s warranty document if you buy a car that is offered with a warranty.

If the manufacturer’s warranty still is in effect, the dealer may include it in the "systems covered/duration" section of the Buyers Guide. To make sure you can take advantage of the coverage, ask the dealer for the car’s warranty documents. Verify the information (what’s covered, expiration date/miles, necessary paperwork) by calling the manufacturer’s zone office. Make sure you have the Vehicle Identification Number (VIN) when you call.

Like a warranty, a service contract provides repair and/or maintenance for a specific period. But warranties are included in the price of a product, while service contracts cost extra and are sold separately. To decide if you need a service contract, consider whether:

• the service contract duplicates warranty coverage or offers protection that begins after the warranty runs out. Does the service contract extend beyond the time you expect to own the car? If so, is the service contract transferable or is a shorter contract available?
• the vehicle is likely to need repairs and their potential costs. You can determine the value of a service contract by figuring whether the cost of repairs is likely to exceed the price of the contract.
• the service contract covers all parts and systems. Check out all claims carefully. For example, "bumper to bumper" coverage may not mean what you think.
• a deductible is required and, if so, the amount and terms.
• the contract covers incidental expenses, such as towing and rental car charges while your car is being serviced.
• repairs and routine maintenance, such as oil changes, have to be done at the dealer.
• there’s a cancellation and refund policy for the service contract and, whether there are cancellation fees.
• the dealer or company offering the service contract is reputable. Read the contract carefully to determine who is legally responsible for fulfilling the terms of the contract. Some dealers sell third-party service contracts.

The dealer must check the appropriate box on the Buyers Guide if a service contract is offered, except in states where service contracts are regulated by insurance laws. If the Guide doesn’t include a service contract reference and you’re interested in buying one, ask the salesperson for more information.
If you buy a service contract from the dealer within 90 days of buying a used vehicle, federal law prohibits the dealer from eliminating implied warranties on the systems covered in the contract. For example, if you buy a car "as is," the car normally is not covered by implied warranties. But if you buy a service contract covering the engine, you automatically get implied warranties on the engine. These may give you protection beyond the scope of the service contract. Make sure you get written confirmation that your service contract is in effect.

The Buyers Guide cautions you not to rely on spoken promises. They are difficult to enforce because there may not be any way for a court to determine with any confidence what was said. Get all promises written.

Source: Federal Trade Commission