I wish there were a way to tell the kid to change out the oil in the MT! It sounds like the dealer KNEW there was a malfunction & reset the check engine light.... which I think should be considered fraud. I don't know if that's a full disclosure state. Some are, some aren't.
The MT is likely filled with the wrong oil. Many places that don't know better will put gear oil in them. The FIRST indicator is 5th gear. If caught in time & changed, it could be fine. So there may be nothing wrong with the car! (the MT could've made the check engine light come on)
As for a warranty that isn't.... it's common practice at these "buy at wholesale" dealers. They take the rejects from reputable places, clean 'em up & slap a for sale sign on them. There's a fairly new Ody that's being wholesaled at the dealer my prince works at just because the leather in the front seats is a bit crumpled & an arm rest needs to be replaced! It's worth over 20k & they don't want to hassle with spending 2K or less to fix it. But it's so hard to know when THOSE deals are what's found! They are rare!!
When buying any warranty you MUST read it! Most claim bumper to bumper, but aren't. We NEVER buy warranties on things. Not on appliances, cars, TVs... nothing. We did a couple of times & they've never been backed. (electronics)
So what would I do in this kid's situation? Change the MT oil. Take it to a shop & have it diagnosed. Send the fly-by-night dealer the bill. Make sure the news station stays involved. He should get the additional funds back for the warranty since his car didn't qualify with too many miles & use that to pay for a proper diagnoses...but still send a bill.
Next time he buys ANY car, he should have it inspected by a tech someplace else. They generally don't charge too much.
Just my 2 cents.
