There are two types of warranties that may come with the purchase of both new and used cars: express warranties and implied warranties. Express warranties are warranties which apply to specific items or the performance of the car. They can be written or oral, but they must be communicated to the buyer in some way. Most express warranties are in writing and may come in special packages, but all express warranties do not have to be mentioned in the special package. An express warranty can be created by a description of the car. For example, if the contract describes the car as a 1988 Spitfire, the dealer or manufacturer is warranting that it is what the contract says it is. If the car is, in fact, a different model or a different model year, the express warranty has been breached.
While an oral representation by the dealer or a salesman may be an express warranty, you should not automatically assume that such a representation is a warranty. The representation may be considered by the courts as nonspecific or mere "puffing." For example, if the salesman says "This car is a real cream puff," he has made no direct representation about the car's performance and the statement is not a warranty. Also, even if the salesman makes a more specific statement, it may be difficult to prove the statement was made. Further, the written warranty will often state that the written warranty is the only warranty and oral representations are not a part of the contract or the warranty.
Almost every new car and many used cars come with some type of written warranty. You should take the time and the effort to read and understand exactly what is covered and what is not covered under the warranty. You should also understand whether it is the dealer's or the manufacturer's duty to make any repairs covered by the warranty.
Understand that an extended service contract is not a warranty. Both a warranty and a service contract may require someone to repair problems with the car, but they are not the same. A warranty is an affirmation of fact or a "promise" about the performance of the car and is a part of the sale. An extended service contract is a separate contract and is sold for an additional price.
Implied warranties apply to the sale by law. There are three types of implied warranties: the warranty of title, the warranty of merchantability, and the warranty of fitness for a particular purpose.
The warranty of title says that the dealer or manufacturer has good title to the car and can transfer this title to the buyer. This warranty also says that the car does not have any liens that the buyer has not been told about.
Under the implied warranty of merchantability the dealer or manufacturer warrants that the car is fit for the ordinary purposes for which cars are used, that it is fit for driving. Minor problems, such as a broken automatic door lock, may not be considered as a breach of this warranty.
Under the implied warranty of fitness for a particular purpose, the dealer or manufacturer warrants that the car is fit for a specialized purpose. For this warranty to arise, the seller has to know what the specialized purpose is for which the buyer wants the car and that the buyer is relying on the seller's skill or judgment in recommending something fit for that purpose.
Most dealers and some manufacturers put clauses in their contracts that try to limit warranties or prevent them from being given. These clauses are called disclaimers. The law allows them to use disclaimers, but they must do it properly. Express warranties cannot be disclaimed. Implied warranties of fitness for particular purpose can be disclaimed if the contract provides clearly and conspicuously that all implied warranties of fitness for particular purpose are disclaimed. You should read all disclaimers in the contract before signing it.
You need to be especially careful when buying a used car because the warranties are more likely to be limited or disclaimed completely. Federal law requires dealers to give basic warranty information on a window sticker that must be placed on the used car. If this sticker says the car is sold "As Is," the dealer is giving no warranty at all. This means that the dealer does not even warrant that you can drive the car off the lot.
For more information, you may want to read LawLine on Extended Warranties and Service Contracts
This information was prepared to give you some general information on the law. It is not intended as legal advice about any particular problem. If you have questions about the law you should consult a lawyer. If you do not know a lawyer, you can call the South Carolina Bar Lawyer Referral Service weekdays between 9 a.m. and 5 p.m. The number is 799-7100 in Richland or Lexington Counties, and 1-800-868-2284 from other parts of the state.