Car warranty refers to a program that a car owner would buy into in which makes the warranty company responsible in paying for the regular maintenance and repairs for the vehicle for a particular period of time from the date of sale. The warranty period varies between three months and three years depending on the choice of the car owner. Similarly, warranties are available to used cars. The only difference is that used car warranty is expensive when compared to original warranties.

To protect the used car owners from falling prey to unscrupulous warranties, the US government has evolved a federal law, which has some features. The law protects from the used car owners from being cheated. It is also called ‘lemon law’.

As per the used car law, dealers cannot persuade the car owners to purchase a particular car warranty. Owners have to be given the flexibility of choosing the auto warrant of their choice. Any such move to force an auto warranty, which is not preferred by the car owner, can be questioned.

If the dealer does not provide service as mentioned in the auto warranty, the law stipulates that car owner initiate action against the firm. If a car owner is not satisfied with the service extended by the auto warranty firm or the dealer, he / she have the freedom of discontinuing it and selecting a different service provider.