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Used-Car Financing & Warranty FAQs

Financing & Lease

Can you lease a used car?

Most dealers don't offer leasing on used cars, but used cars that were leased when new and are now for sale provide some benefits, such as good condition and low miles.

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Off-Lease Car Glut Might Mean Used-Car Buyer’s Market

How do I finance a used car?

Using the dealership’s lender is convenient, but it's best to shop around at banks and credit unions ahead of time so you'll know whose rate is best when you're at a dealership. This research may take a few days but can be well worth the time.

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Inside the Finance and Insurance Room
Auto Loan Basics for First-Time Buyers
What You Need to Get a Car Loan

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Are loan rates higher for used cars?

Yes, loan rates are higher overall for used versus new cars, but they may be better if the car is factory-certified pre-owned because manufacturers may offer attractive interest rates to promote CPO sales. Before financing with a dealer, bank or credit union, check the national average interest rates for used cars at Bankrate.com.

Related:

Report: Average payments for New, Used Cars Rise

How do I know if I can afford the payments?

You can estimate your payments here using Cars.com’s finance calculators. You should have a down payment of at least 20 percent, financing lasting no longer than four years and a principal, interest and insurance total not exceeding 10 percent of your gross household income.

Related:

Can You Afford Your Car?

Warranty

Are extended warranties worth the money?

Extended warranties offer peace of mind, but apart from the coverage included with factory-certified pre-owned cars, additional plans come with a price that studies have shown to be higher than the benefits you can claim in repairs.

Related:

CPO Pros and Cons Versus Extended Warranty

What warranty comes with a used car?

Initial warranties are limited by the miles and age of a car, so if the car has higher miles, original warranties may no longer apply. Also note that warranties don't always transfer to subsequent buyers. Check the vehicle manufacturer’s specifications for warranty limits.

Related:

Making Sense of Used-Car Warranties

What is a bumper-to-bumper warranty and what does it cover?

Often called a basic warranty or new-vehicle warranty, a bumper-to-bumper policy covers components such as air conditioning, audio systems, vehicle sensors, fuel systems and major electrical components. Most policies exclude regular maintenance such as fluid top-offs and oil changes, but a growing number of brands have separate free-maintenance provisions. Bumper-to-bumper warranties typically expire faster than powertrain warranties. Terms are typically three years or 36,000 miles, although some have terms as high as six years or 60,000 miles. Check the vehicle manufacturer’s specifications for bumper-to-bumper warranty limits.

Certified Used Cars

What does CPO mean?

A certified pre-owned or CPO car has been inspected to meet minimum quality standards and typically includes some type of warranty. While dealers and third parties certify cars, the gold standard is an automaker-certified vehicle that provides a factory-backed warranty, often extending the original coverage. Vehicles must be in excellent condition and have low miles and wear to be certified, which is why off-lease vehicles feed many CPO programs.

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Related:

Tips to Buying a CPO Car