Many new cars come with a three-year warranty as standard, with some firms offering as many as seven years guarantee against mechanical failure on your car. But if you’re buying an older car, then you still have the option of taking on an additional warranty on top of the purchase price. Is it worth the extra expense, and what does it cover?

What Does it Cover?

Most warranties are also known as mechanical breakdown insurance and that describes the aim of the policy very well. Warranties are about covering the basic mechanical issues which might go wrong with your car. So it would cover something like the clutch failing, the radiator blowing up or the exhaust dropping off. It doesn’t cover the “wear and tear” aspects of owning a car such as replacing worn out tyres, or changing things like oil or air filters. Warranties aren’t the same as insurance, and won’t pay out to repair your car if you are involved in an accident. They also don’t cover routine servicing, or the cost of booking your car in for its annual MOT test.

Other Exclusions

There will be a long list of other things which your car warranty policy doesn’t cover and the only way of finding out will be to read through the terms and conditions. Don’t assume that all policies are the same. Check also whether there is a cap on the amount of money the warranty will cover for each issue. If you modify your car in any way, even something as minor as adding a new spoiler, the warranty policy might refuse to pay out.

Is a Warranty Worth It?

There is no right and wrong answer to this question. Make your decision based on the type of car you are buying, and its value. A more expensive car will cost more in repairs, as the parts will cost more and the engines may be more complex. If you are planning to do a high mileage in the vehicle, this may push up the price of the warranty to a point where it just isn’t worth the money. Similarly, if your car is very old and therefore more likely to break down, then the price of the warranty will also be elevated. Balance up the cost of the warranty against the possible cost of repairs should something go wrong.

How Much Does a Warranty Cost?

There are lots of companies offering extended warranties for used cars, so don’t feel pressurised into taking the policy the car dealer is offering. Try to shop around and see whether you can strike a better deal elsewhere. The average cost of a one-year warranty policy covering all mechanical issues, parts and labour is around £300. If you find a much lower price then check carefully to make sure that you are comparing like with like. Cheaper policies are usually cheaper for a good reason. Finally, consider whether it’s really worth buying a policy, or whether the best course of action is to try to build up savings to meet the cost of any repairs.