The idea of a car warranty is to give drivers protection against any unexpected costs for both labour and any parts which are required to repair their vehicle. This is the case whether the car suffers an electrical fault or mechanical failure. With bills for repairing vehicles often running into thousands of pounds, many drivers hedge against this risk by paying for a warranty to cover against a large, unexpected expense.
Warranties, like insurance policies, differ depending on the company which sells them. Companies will put their own terms and conditions on their warranty policy. Often there will be a cap on the maximum mileage you are allowed to drive, or a requirement to have the car maintained and serviced in a specific way. Always read through the terms and conditions of any warranty product before buying, or accepting a new or used car. Don’t be afraid to ask for a further explanation if you are unsure what the warranty covers or excludes.
Usually, the customer will have to pay a certain sum towards the cost of the parts and labour to have their car fixed. This is the sum known as the excess and although it varies between policies, you can expect it to be a few hundred pounds. This is the money you will have to pay out of your own pocket and savings before the policy kicks in. Make sure that you are comfortable with the idea, and that it is set at a level that you can afford without difficulty.
New and Second-Hand Car Warranties
When buying either a brand new or second-hand car from a dealer, a warranty is usually included as part of the deal. Warranties are not a legal requirement though, so don’t assume and always double check what you are actually being offered. This is especially the case with second-hand car warranties. If the dealer does not offer any form of warranty, then you may choose to buy a separate warranty insurance product from a third-party supplier or the seller.
Every policy varies in detail, but most will cover the same basics for car ownership. Always shop around when thinking about buying a warranty and it’s not just the terms and conditions which can vary hugely – the price can too. There are lots of price comparison sites to help, and many will provide a simple table to help you quickly compare the features and benefits of the different policies. Most car warranties for new or second-hand vehicles will cover elements such as:
Sometimes, you may be able to pay extra to upgrade your warranty to cover more of the mechanical and electrical issues experienced with a vehicle. Dealers may also offer the option to extend the warranty after the one offered on the purchase of the vehicle expires. Sometimes, warranties offered by dealers can be very expensive, and some customers choose instead to put some money aside each month to cover any repairs which their vehicle may require. This is quite a risky strategy as there is always the chance that your repairs cost a lot more than the money you have saved.
Advancing technology means that any new car bought today is far more reliable and long-lasting than a car bought new 10 or 20 years ago. But that doesn’t mean nothing ever goes wrong. Choosing to purchase from a manufacturer which offers a good level of protection on a warranty can give you peace of mind and several years of stress-free motoring. Peace of mind comes from knowing that you have a degree of protection if something goes wrong with your vehicle. A modern car can be expected to clock up at least 150,000 miles without difficulty, and are much less likely to rust than cars in the past, due to advances in rustproofing techniques. But on the other hand, a modern car has far more gadgets and electrical components than an average car 20 years ago, with air conditioning, on-board computers to manage exhaust emissions, parking cameras, cruise control or touchscreen systems to manage the radio or satellite navigation. Just like any other electrical component, these can sometimes fail.
Engine Control Units, or ECUs are the computer systems which manage the way the car runs, and when they are functioning properly, they keep performance high. But when one of those warning lights flashes up on the dashboard indicating that something has gone wrong fixing it yourself isn’t always an option. The vehicle has to be taken to the garage so they can firstly hook it up to their diagnostic unit to work out what has gone wrong, and then fix it. This can be really expensive, and demonstrates perfectly why having a warranty is such a good idea.
All new cars sold in the UK will have some sort of warranty, but don’t make the mistake of thinking that every manufacturer covers the same things. A typical warranty will cover the first three years, or up to 60,000 miles on the road, whichever milestone comes first. A warranty is designed to cover the unexpected failing of any part of your new car during this time period. What it is not designed to do is to cover you for components on the car which require replacing from time to time – things like tyres, windscreen wiper blades or brake pads – as these are classed as wear and tear items or consumables. Warranties generally won’t cover these items, and you’ll be expected to pay for them yourself.
Legally, main manufacturers and second-hand car dealers don’t have to offer any warranty at all on a used car. However, many will choose to offer some sort of warranty as a marketing tool, and to reassure customers that buying a car from them comes with some sort of guarantee. A warranty makes us perceive that the seller can be trusted. If a used car doesn’t come with a warranty, then there is the option of buying a separate one to cover you for any unforeseen mechanical faults.
As manufacturers set their own rules about what warranty they will offer, there’s quite a variation between the different brands. Sometimes, the warranty offered will even vary between different models produced by the same manufacturer. Although the standard warranty for a new vehicle is 60,000 miles or 3 years, some manufacturers offer much more. Kia, the South Korean manufacturer, broke the warranty barrier by being the first to offer a 7-year or 100,000-mile warranty. Other manufacturers also go above and beyond the 3-year standard. SsangYong and Hyundai also offer a 5-year warranty on their vehicles, and British manufacturer MG are taking on Kia with a 7-year warranty. Maximum mileage varies from 80,000 miles for the MG warranty up to 150,000 miles for SsangYong. The average British motorist covers just 8,000 miles a year, so unless you are driving considerably more than the average driver, you shouldn’t have any concerns about hitting the maximum mileage. In most cases, warranties which come with a new car are transferred over if you sell the car to someone else before the maximum period of the warranty is reached.
Many manufacturers who offer the standard, or a less generous warranty policy, will offer customers the opportunity to buy an extended warranty. This, as the name suggests, extends the period of the warranty and continues the cover. The cost of these policies can vary hugely and as you are free to shop around, it’s wise to look at what third party providers are offering rather than defaulting to what the manufacturer is trying to sell you. Cover varies also, so always double-check exactly what you are covered for, especially if you come across a policy being offered at a surprisingly cheap price. You don’t have to buy an extended warranty if you don’t want to – it’s an added extra, and isn’t compulsory.
Each used car dealer will have its own policies about what warranty the offer on a used car. If you are buying, for example, a 3-year old Kia, you will get the remaining 4 years of the original 7-year warranty with your purchase. If the original warranty has run out, then the typical used-car warranty lasts for a matter of months, rather than years. 6 or 12 month warranties are common on used cars, but on older models, you might be offered a 3 month warranty only. If you are considering buying a used car from a large dealer franchise for one of the main manufacturers, then these are often sold with 12 months’ warranty.
If you are buying from an independent used car dealer, then they are unlikely to underwrite their own warranty policies. They will instead buy their used car warranties from a separate insurance company, and cover varies. Always ask to check the terms and conditions of any warranty you are offered before signing on the dotted line as some warranties offer a much higher level of cover than others. Despite what the pushy salesman at the dealership might tell you, buying any sort of warranty with a used car isn’t compulsory. If you’d prefer to reject the garage’s offer to organise a warranty and source your own, then you are free to do so. You are also free not to have any sort of warranty at all, taking the risk of expense if something goes wrong with the vehicle.
Even if a dealer doesn’t offer any sort of warranty on used vehicles which they sell, they are still obliged to make sure second-hand vehicles are of “satisfactory quality” under the terms of the Consumer Rights Act, which also uses the term “fit for purpose”. If this isn’t the case, then the dealer is legally obliged to repair any faults, and if they can’t fix the problem, refund your money. This legal right is easier to enforce within the first six months of owning the vehicle. It can still be tricky to get a dealer to agree to repair a fault relying on the Consumer Rights Act – they may well argue that minor faults are to be expected on an older vehicle, and that something like a broken catch on the glovebox doesn’t stop the car being of satisfactory quality. Is the cost of the repair worth taking them to court over, given the expense and time required?
Car warranties should cover all faults, whether mechanical or electrical, and guarantee against rust for at least three years, assuming you are purchasing a new vehicle. Some brands go above and beyond with rust cover; BMW for example gives 12 years’ rust protection, as long as the rust hasn’t developed as a consequence of a stone chip.
If you are buying an electric or hybrid car, you will want to check out the warranty on the battery pack. Most of these warranties will guarantee no deterioration in the performance of the battery pack for the lifetime of the warranty. Others will state that a replacement battery will be offered if it deteriorates to a certain percentage of its original state.
Car warranties can be split into three main categories, depending on the type of vehicle you are buying.
Third-party warranties, also sometimes known as aftermarket warranties, are available for cars up to around 12 years old. Understandably, the older the car, and the higher the mileage, the more it will cost to buy a warranty for it. A warranty for a vehicle which was very expensive when new will also cost more. Always shop around for any warranty, ensuring that you are clear what each product offers.
Warranties work by reimbursing you for any repairs which are required during the time the warranty is in effect. There might be terms and conditions about where you can have the work done, so check first before committing to expensive engine work. Most aftermarket warranties cover fewer items than those offered by manufacturers, and some of the most basic will only cover engine and gearbox problems.
Usually, you will be asked to get a quote for repair work, so that the warranty company has an official record of the diagnosed fault, and to make sure the cost is covered by warranty. Always contact the warranty company before getting quotes as you may end up having to pay for the mechanic’s diagnostic time if you’re not covered.
One of the main issues with aftermarket warranties is the limits they place on labour charges for repair work. The hourly rate is often capped at £50, which might not cover the mechanic’s charges at all garages. If it doesn’t, you’ll be expected to make up the difference. Other warranty companies might only pay a percentage of the repair and parts on a sliding scale depending how old the vehicle is; so 80% for a car which is 4 years old, 60% for a car which is 5 years old and so on. It’s very important to read the terms attached to any policy which you are thinking of buying. That great price might not be so great when you discover that you are expected to contribute towards the repairs to potentially the tune of hundreds of pounds. It’s a good idea to check that the company you are thinking of buying a warranty from is accredited by the Motor Industry Code of Practice for Vehicle Warranty Products. Around 70% of the products on the market are approved, and have to stick to guidelines about honest advertising and giving information about cover in a plain English fashion. Products accredited by the Motor Ombudsman also give you a 14 day “cooling off” period, so if you read through the cover again and decide that the warranty isn’t for you, then cancellation should be simple and without penalty.