With nearly 30 million cars in the UK, we Brits really do love our four-wheeled friends… but this love affair comes with a big price tag. Apart from the car itself, other significant costs include petrol, car insurance, road tax and MoT. But maintenance is also a huge potential cost – especially if your car suffers a serious mechanical problem. That’s where car warranties come in.
What is a car warranty?
A car warranty (also called mechanical breakdown insurance) is a type of cover that protects you from the cost of fixing certain mechanical problems. The warranty is valid for the term of the policy (anything from one to seven years), or in the case of new cars, for the term of the policy or until the car hits a certain mileage (typically 100,000 miles), whichever comes first.
Car warranties come in two basic types: manufacturer’s warranty and used car warranty.
Manufacturer’s Warranty
One perk of buying a new car is that it comes with a manufacturer’s warranty included in the price. This warranty will cover the car for most problems and will make the necessary repairs at no charge to you.
However, as with car insurance policies, there will be exclusions, so be sure to read the warranty to find out exactly what’s covered (see ‘What’s Covered?’ section below for more details).
One welcome trend with manufacturer’s warranties is that, as cars become more reliable and competition more fierce, certain car makers have introduced longer warranties. The typical warranty cover period is still three years, but some manufacturers such as Hyundai and Fiat, now include five year warranties with their cars. Better still, South Korea manufacturer Kia now offers an industry-beating seven year warranty on its Cee’d model.
It’s also worth noting that these warranties are usually transferable to a new owner when the car is sold on, for as long as the warranty period is still valid. However, the warranty’s validity will depend on the manufacturer’s conditions continuing to be met, e.g. repairs will need to be carried out by an approved garage.
Used Car Warranty
A used car warranty is sometimes called a dealer or after-market warranty, depending on whether you bought the cover from the dealer or if you sourced it yourself afterwards. As well as protecting used cars, this type of warranty can also be bought to extend the protection on a car bought from new, once its manufacturer’s warranty has expired.
As with manufacturer’s warranties, there will be certain exclusions, so be sure to read the small print to find out exactly what’s covered (see ‘What’s Covered?’ for more info).
What’s Covered?
Don’t assume that all car warranties are the same, as different warranties will likely have differing levels of cover. Some, you’ll find, will cover a comprehensive list of mechanical faults, whilst others will cover the bare minimum. The best way to find out exactly what is covered is to read the policy small print before buying.
A typical policy will cover the car’s main working parts, like the engine, drive train and suspension. Such things as the air conditioning can also be included. Parts that you’d expect to wear away – brakes, exhaust and tyres etc – tend not to be covered as standard (though some companies do offer tyre replacement as an added extra). The car warranty will also state the policy term, i.e. the length of time during which your vehicle is covered.
A good, comprehensive warranty will cover parts, labour and consequential loss. ‘Parts’ can include mechanical items to do with the clutch, gearbox, timing belt, oil seals and gaskets, suspension, cooling system, steering, ABS, wheel bearings, ignition, fuel system, engine management system, electrics, air-con, electric windows and central locking.
Typical Exclusions
This part of a policy sets out conditions which may invalidate the warranty, for example:
- Failure to keep to the car’s recommended service schedule
- Modifying the car
- Using an unauthorised garage for repairs
- Repairs arising from the replacement of parts, fuel or lubricants not approved by the manufacturer
- Damage caused by owner neglect
Do I Need a Car Warranty?
Unlike car insurance, a car warranty is not compulsory, though it’s certainly well worth consideration. Although a warranty is an additional cost (e.g. typically around £200 a year for a four year old Renault Megane 1.4), it offers the peace of mind in knowing that you won’t have to fork out the full cost of repair should your car suffer an expensive mechanical fault, such as engine failure.
However, it’s worth knowing that you do have a level of protection under your statutory rights, but these only protect you for a short while after the car’s purchase. Read the article ‘Buying a Used Car? Then Know Your Consumer Rights’ for more information.
Where Can I Buy a Car Warranty?
A new car will automatically come with a manufacturer’s warranty. If buying a used car from a dealer, you will be offered a warranty at the point of sale, or it may even be already included in the price. However, you are free to search online or phone a warranty company directly to find a better deal. If buying a car privately, or your existing warranty is about to run out, you can also choose the online or telephone method of finding a car warranty.
Note: when buying a car warranty, you will probably be asked to prove that the car has a current MoT Certificate (if the car is over three years old) and that it has been properly serviced within the past year.
In summing up, whether you drive a top of the range beemer or a beat-up banger, cars can and do sometimes go wrong. So one way to keep a lid on potentially expensive maintenance costs is to protect yourself with a warranty. And even though there will be a relatively small outlay when buying a warranty, it will likely be a whole lot cheaper than the repair bill should something major go wrong.
