Buying a used car is always a trickier prospect than buying a new one.
New cars come with more built-in protections (express warranties) and Iowa laws regarding new cars are stricter.
But, while it’s always riskier to buy a used vehicle, especially in Iowa which has minimal laws protecting used car buyers, there are some ways to get around the Iowa “as-is” used car policy if you’ve gotten a real clunker.
Iowa Used Car Warranty Laws
Iowa does not require used cars to come with warranties.
All used vehicles in the state may be sold as-is.
Some used cars may come with warranties as incentives, but warranties are offered on an individual basis by dealerships and not state-mandated.
One major exception to this is if a vehicle is still under its original manufacturer’s express warranty.
Most express warranties stay with the car, not the buyer, which means if you buy a lightly-used vehicle still under the original warranty, that warranty generally remains in effect.
The lemon law in Iowa also applies to used vehicles.
As long as a car is still within 24 months (2 years) of delivery to its original owner or under 24,000 miles, it has some protection from major defects.
See What To Know About The Iowa Lemon Law for more information.
Iowa Used Car Return Laws
Since used cars in Iowa are covered by the lemon law, there is some right to return a used car in the state.
If a car has a major defect within the first 24 months (2 years) or 24,000 miles of delivery to its original owner, it may be eligible for return (or replacement) under the lemon law.
Iowa also has a detailed “damage disclosure” law.
This law requires car sellers (even private-party sellers) to disclose if a vehicle was salvaged, rebuilt, or in a flood.
It also requires disclosure for any vehicle that had severe damage for which the repairs cost over 50% of the fair market value.
While the law doesn’t go so far as to say the seller must take the vehicle back if they fail to disclose such an issue, it does state that failure to disclose is a form of fraud.
So, if you have proof the seller failed to disclose major damage, you can request they refund your money before taking the matter to court.
If they refuse, you can file a lawsuit based on this law and your reward (if you win) will be determined by the court, but almost always covers the full buying price of the vehicle.
Used Car Warranty & Car Return General FAQ
To further your understanding of used car warranties and return rules here are some answers to frequently asked questions.
Do used cars come with warranties?
Many do, but not all.
And in most states, used cars have no requirement to be warrantied.
Used cars may be sold either with a warranty attached or “as is.”
Those with warranties may also have very limited warranties, with either a short time/mileage window or only a few parts of the car that are covered.
All this said, dealerships often offer warranties as incentives to buy their pre-owned vehicles.
And, if they don’t, you can certainly negotiate one into your purchase contract.
Does an express manufacturer’s car warranty transfer to a new owner?
Generally speaking, yes, an express manufacturer’s warranty transfers to a car’s new owner as long as the warranty is still in effect (though, the rules or coverage period of the warranty may change).
But this isn’t always the case.
If a vehicle’s warranty does not transfer, this should be clearly spelled out in the vehicle’s paperwork, and the seller is also required to tell you.
Do extended vehicle service plans count as warranties?
Yes, in most cases, service contracts are considered a form of warranty under the law.
However, they’re unlikely to do you much good if real issues arise.
Service contracts typically don’t provide much more than general maintenance, so if your car breaks down it is unlikely the dealer will have a duty to repair it.
However, if they refuse to do your oil change, rotate your tires, or anything else actually included in your service plan, you can certainly seek justice under warranty laws.
Is there a federal law that deals with used car warranties?
Yes. In a way.
The Magnuson-Moss Warranty Act applies to all warranties, regardless of whether those warranties are attached to new or used products.
The law is not specific to vehicles, but can be used to enforce any warranty on a used vehicle.
What’s in the Magnuson-Moss Warranty Act (as it applies to vehicles)?
The Magnuson-Moss Warranty Act includes several key points that pertain to vehicle warranties.
These points are:
- No product is required to have a warranty (and many used cars don’t).
- The terms of a warranty must be fully disclosed in simple, understandable language.
- Any ambiguity in the language of a warranty is held against the warrantor (in this case, the manufacturer or dealer).
- Warrantors cannot require only branded parts be used with their products for a warranty to remain valid (Ford can’t require only Ford parts be used on your vehicle).
- Service contracts must follow these same rules.
Basically, if you feel like you’ve been duped by a warranty, you may have a case under the Magnuson-Moss Act.
And if your used vehicle does come with a warranty, the dealer/manufacturer must repair any defect for free and to satisfactory condition, or you can seek justice under your local (or the federal) warranty law.
What about the Federal Trade Commission’s Cooling-Off rule?
The FTC’s 3-day cooling-off rule or “right to cancel” does not apply to vehicles.
For more on the FTC’s rule and how (and why) it doesn’t apply to vehicle sales, see Does The FTC’s 3-Day Right To Cancel Apply To Car Purchases?