The American Bar Association Legal Guide for Military Families by American Bar Association

Author:American Bar Association [Association, American Bar]
Language: eng
Format: epub
ISBN: 978-0-375-72397-1
Publisher: Diversified Publishing
Published: 2013-05-27T16:00:00+00:00

New or Used

After identifying the type of vehicle you want and narrowing the choice down to a few makes and models, the next decision is whether to purchase “new” or “used.” There are advantages to each choice. With a new vehicle there was no previous owner and there are no concerns about prior driver abuse or maintenance neglect. Parts on a new vehicle should not need replacement for some time, saving on maintenance costs. New cars come with a manufacturer’s warranty that covers major system and part failures. On some models, manufacturers will offer free or no-cost maintenance and bumper to bumper warranty coverage for limited periods of time or mileage. No previous owner, new parts, and a warranty—all of this equals worry-free driving, but it comes with the new car price.

Most manufactures have a large investment in the name brand and want to build brand loyalty so that customers come back to purchase more products made by the manufacturer. The manufacturer of a product provides a warranty as a guarantee that the product will perform to the specifications advertised. Only the manufacturer can provide a warranty. Presumably, the better the product, the longer and better the warranty; for example, three years and 36,000 miles on one vehicle compared to ten years and 100,000 miles on another. A manufacturer’s warranty is usually limited by time or number of years, usage/number of miles, electrical systems, or power train. The new car warranty usually means that if the product or part of the product does not perform as specified, it will be repaired or replaced. An aftermarket guarantee for the quality of a vehicle is called a service contract. Service contracts are frequently sold with a used vehicle by the dealership but can be purchased from an independent provider. Service contracts are essentially insurance policies for the vehicle. If a covered part fails, the administrator of the contract will pay for the repair. Be very careful when purchasing service contracts. Like insurance companies, the companies that offer service contracts make money when they do not have to pay claims. Check for the history of the provider. Read the contract carefully. Some service contracts will have broad coverage of the vehicle and exclusions that would prevent payment of a claim. For instance, any damage in the first ninety days is considered pre-existing and not covered. Other contract language may indicate that the failure of any lubricated part is covered. However, the owner has to maintain the vehicle’s lubrication. It is rare for a lubricated part that is maintained to actually fail. Last, when a product is sold “as is,” that means that the seller does not warranty or guarantee the product. Be wary of products sold “as is” because the seller knows where he or she acquired the vehicle and inspected it prior to purchase. If he or she is not willing to offer a service contract on the product, it may mean that the vehicle is in poor condition.

Purchasing a used car

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