Everything you need to know about extended car warranty
Car warranty explained
All cars fresh from the factory, under EU law, have to have a manufacturer’s warranty for a minimum of 2 years. This warranty protects new owners from having to pay for repairs to fix mechanical or electrical faults, this includes labour costs and replacement parts. Without a warranty, these repairs can be very costly.
How long your car’s manufacturer’s warranty lasts differs between manufacturers, but most come with a 3 year or 60,000 mile limit. Meaning you’re covered for faults until whichever one comes first – the end of the period, or you go over the mileage limit.
After the warranty runs out
When you purchase a brand new car, it will come with a manufacturer’s warranty as explained above. If you purchase a used car, the car will typically come with a warranty from the dealer for a certain time period, i.e. 3 months. After this time, when the warranty expires, with both your new car or your used car, you have several options:
- Put money aside to cover any unexpected repair costs.
- Sell your car or trade it in for a new one with a new car warranty.
- Take out a new warranty, called an extended car warranty.
If you aren’t sure if you need to take out an extended car warranty know this – research by Green Flag (2018) showed that the average UK driver spends £574 each year on car repairs. This report also revealed that 21 million cars were being driven on British roads, despite having a fault, with 33% of these drivers ignoring a known fault and driving the car for an average of 10 weeks before taking it to the garage to have the fault repaired. 57% of drivers said they would wait to take their car to the garage for repairs because of cost reasons.
Head of Automotive Technology at Green Flag, Nick Reid said: “Not only is it dangerous for you, your passengers, and other drivers on the road; not getting issues seen to only makes them worse, which means a bigger bill for you,”
So how do you keep yourself, your passengers and other road users safe, and get any faults dealt with as soon as they occur, without having to pay for them yourself? One way is to look at taking out an extended car warranty.
What does an extended car warranty cover?
Every extended car warranty differs, with differing terms and conditions. Some warranties are set, whereas others are flexible, offering varying degrees of cover suitable for each policyholder.
Why would you want flexible cover? Because not every car owner requires the same things as the next person.
This varying cover also means that the costs for warranties can vary too. Some are considerably cheaper than others. But, the cheapest policy isn’t always going to be the best policy as it may not cover what you need it to cover, in fact, the cheaper the policy, the less it covers.
It’s also worth noting that policies sold through dealerships can be more expensive than policies sold through third party providers. And while the dealership policies may be more expensive, they don’t typically provide more cover.
Always read the small print of your extended car warranty to ensure you know exactly what it covers. If you aren’t sure, ask your warranty provider to tell you.
Covered in most extended car warranties are:
- The engine
- The fuel system
- The clutch and the gearbox
- The suspension and brakes
In order to keep your extended car warranty valid, you may have to adhere to the rules of your policy. Failure to do so will likely render it void, leaving you to pick up any repair bills.
Typical stipulations in a car warranty include:
- The maximum mileage you can travel in a year
- How often you need to service your car
- Where you need to take your car to be serviced
Always check the wording on your warranty to see what is and isn’t allowed. If you have any doubts, always speak to your policy provider – you don’t want to do anything that could invalidate your warranty.
Warranties can be accidentally voided by making the simplest mistakes, such as:
- Using your vehicle even after the warning light shows on your dashboard
- Using your vehicle despite knowing that it’s got a fault
- Not servicing your vehicle at the recommended servicing intervals as suggested by your car’s manufacturer
- Modifying your car in anyway
- Using non-standard parts to repair your car, or non-manufacturer approved parts
- Using the wrong fluids when changing the oil, for example
- Not adhering to your extended warranty’s terms and conditions
Remember, your car warranty doesn’t replace the legal rights you have under the Consumer Rights Act 2015, which says that you have the right to reject a faulty car and receive a full refund within 30 days of purchasing it.
You also may be eligible for protection under section 75 of the Consumer Credit Act 1974 if you paid for your car with your credit card, or bought it on hire purchase. Section 75 says that the credit card provider or the hire purchase finance provider are also jointly responsible should any issues with your car arise.