Car warranties explained

Maria McCarthy / 02 March 2020

The purpose of a car warranty is to provide motorists with a degree of cover if their vehicle develops certain faults and needs repairs.



What's a car warranty?

Sometimes referred to as Mechanical Breakdown Insurance (MBI), car warranties are extremely complex. Most warranties cover the the main parts of the car such as the engine, gearbox, suspension, and transmission, but there are other items they don't cover. These tend to be what are called 'frictional parts' which need regular replacing such as tyres and windscreen wiper blades.

There are also various guidelines the motorist must follow or the warranty can be declared invalid.

It can be helpful to contrast a car warranty with a guarantee for a kettle. If you buy a kettle and it's guaranteed for a year you know exactly where you stand. If anything goes wrong you can get it repaired or replaced.

Car warranties, on the other hand are full of small print. If they were made for kettles they'd say things like, 'Well, we'll repair the heating element but if anything goes wrong with the plug you'll have to pay for that yourself. And you'll have to bring the kettle in every six months to be serviced at our shop. Oh and if you boil it more than 10 times a day then the warranty will be declared invalid.'

Having said that, a warranty, and in particular a manufacturers' warranty can be useful and offer peace of mind in respect to some repairs. But it's important to be aware that they can vary widely in terms of what they cover and that poor warranties are a complete waste of money as they've got so many exclusion clauses the company can wriggle out of paying out.

 

Should you get into an accident, whether you receive points on your license as a result or not, Saga Car Insurance will provide you with a taxi to get you to your destination in the event that your car is too damaged after the accident. Visit the Saga Car Insurance page to find out more, or contact us today.

Car warranty small print

When you're reading the small print of your warranty, here are some phrases it's important to be aware of:

Mileage and servicing requirements

Most warranties require that you don't exceed a certain mileage and follow their servicing guidelines and schedule.

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Consequential loss cover

If something that isn't covered by the warranty (such as the cam-belt) breaks and damages an item that is covered (for example, the engine), what happens then? Consequential loss cover is when the provider will still pay out for repairs to the warranty-covered part.

Excess

This is the percentage of the warranty claim that you will have to pay. 

'Wear and tear' exclusion clause

Many car warranties don't pay out for car parts that fail due to 'wear and tear'.

Different types of car warranties

Here's a rundown of the various warranties available – from the more comprehensive ones you get with brand-new cars right through to the three month variety you might be offered by a second-hand dealer when you buy an older car.

What they've all got in common is that they need to be studied with great care so you're aware of exactly what they do and don't cover and also your responsibilities in terms of keeping the warranty valid.

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Manufacturers' warranties

One of the most appealing things about a new car for many motorists is that it will come with a manufacturers' warranty. These tend to be more comprehensive than those offered by car dealers or many independent warranty providers.

Each manufacturer offers a slightly different type of warranty for their cars, varying on what they cover, ownership periods and mileage amounts. Three years is fairly standard for a car warranty, though there are exceptions to this. For example Hyundai and and Kia offer 5 and 7 years respectively. When a warranty has both a time and mileage limit it will end when one of them is reached. 

To keep the warranty valid you'll have to have the car serviced to the standards and at the frequency laid down by the manufacturer.

Extended warranties

When the new-car warranty has run out, it's possible to buy an extended warranty. You could be offered one by the car dealership or you might want to buy one from a warranty company. It's also possible to buy an extended warranty for a used car you've bought – you can call up a warranty company, give them details of your car and get a provisional quote. If you decide to buy an extended warranty it's vital to shop around as the level of coverage and what you pay can vary dramatically.

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Used car warranties for 'newish' cars

If you're buying a newish car it's likely that some of the original warranty will still be left to run. It's especially important however to check that the previous owner kept to any servicing or mileage requirements because if they didn't, then the warranty will be invalid.

If you're buying a newish car from a dealer they may offer a one-year warranty, but it can get confusing if there's some of the original manufacturer's warranty still to run. In the case of a car with a three year warranty it would work out like this:

• If it's a one-year old car with two years of the new car warranty still to run you'll get that

• If it's two and a half years old you get the remaining six months of the new car warranty and six months of a used-car one (usually less comprehensive)

• If it's three years old you'll get a one-year used-car warranty.

Used car warranties for older cars

If you're buying an older car from a second-hand car dealer they'll generally offer a warranty of about three months. What it covers in terms of parts and labour can vary considerably so check it out carefully.

Invalidating your warranty

Missed and late services are one of the main reasons warranty claims are turned down so it's really important to stay on top of them. Other ways of invalidating a warranty include making modifications to your vehicle or continuing to use it even if a warning light appears on the dashboard. If you have a car warranty, review all the requirements and be sure to follow them.

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Shall I just not bother with a warranty?

Manufacturers' warranties are worthwhile and attractive – some motorists like to only buy cars that have a manufacturers' warranty and then change cars before it runs out. Others who buy older cars prefer to put the money that they might spend on a warranty into a savings account and then draw on it directly if repairs are needed in the future.




The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.