Many car dealerships and manufacturers offer warranties on their cars to protect you if something goes wrong, but did you know that you can also but separate warranties that will extend the cover you receive as standard? These warranties can protect various aspects of your car and can help you partially or totally pay for repairs or damage to the vehicle while it’s active. Sounds good, but is a warranty worth the paper it’s written on, or are they just an extra expense you can do without? Let’s take a look.
What is a warranty?
A warranty is a form of insurance that is designed to cover the cost of repairs to your car if something goes wrong. In exchange for a small amount of money, a month for the length of the warranty, the company whose warranty you buy will pay for the cost of repairs to the parts of the car under warranty no matter how much it costs. It is common for new cars to automatically come with a warranty, typically lasting between five and seven years, although some car companies offer ten-year warranties too. These are included in the cost of the car, but you may then want to extend this warranty further. You may also want to pay separately for a warranty on a second-hand car, especially if you don’t have much information about its condition.
What does the warranty cover?
This might sound like an obvious question, but it’s one that you need to ask yourself when you look at any warranty on a vehicle. While warranties can be comprehensive, there are often conditions attached which you need to pay attention to in order to decide whether the warranty is worth buying. For one thing, the warranty might not cover all the parts of the car that you wanted it to and may exclude elements such as the tyres and windscreen while covering elements you’re less worried about such as the fuel tank and exhaust.
A second factor to take into account is that there are often requirements you need to follow to maintain your warranty. Some warranties require you to keep up with annual servicing, which needs to be treated as a regular expense or have mileage restrictions to stop you from driving too far. If this is the case, you need to decide whether these restrictions make your warranty worth the money. If the mileage restrictions are too strict to allow you to use your car as you’d like, or if the cost of servicing is higher than the money you’re likely to save, it might not be worth the money.
On top of these considerations, there is also the excess to take into account. Warranties tend to require you to pay a portion of the cost of repairs regardless of how much it costs, called the excess, which is set when you take out the warranty. Setting your excess low means that you have to pay more per month, but you won’t have many out of pocket expenses if and when you make a claim. Conversely, if you choose a high excess, you’ll have to pay less per month but more of the cost of the repair. Again, your circumstances will determine which you choose. Newer cars that are less likely to have expensive problems with them are good candidates for a high excess because you’ll more than likely never need to claim on it. Older cars that may suffer serious engine or electrical faults may require low excess warranties because any problems that occur are likely to cost more.
Other considerations
While the above considerations make the decision sound like a fairly straightforward weighing up of pros and cons, there are some other things to bear in mind that might sway your decision. One of the best things about taking out extra warranties, rather than relying on free or manufacturer warranties, is that you can tailor the cover to what you think you’ll need. Free warranties tend to cover a pre-determined set of potential problems, but many cars have known faults that tend to occur after a certain number of miles. By choosing an extra warranty, you can be sure that the problematic elements of your car are covered, while other elements that are less sensitive aren’t being paid for.
A second thing to bear in mind is that some warranties come with potentially useful extras that you won’t get as standard with a free warranty. For example, many optional warranties give you free breakdown cover in with the price, which can usually cost as much as one to two hundred pounds a year. Alongside this, the warranty might cover or discount other expenses such as MOT and servicing at selected garages, which on its own can save you enough money to make the warranty worth it.
The verdict
Extra warranties can be a great way to get that peace of mind you need when you buy a new or used car, and potentially to save hundreds or thousands on repairs. Buying an extra warranty gives you total control over your cover, so you’re paying for what you want to be covered and not what you don’t. Warranties also give you access to extra benefits that you can’t get with free warranties, which may be worth the cost on its own. However, it’s important to double-check every aspect of your warranty to make sure that it covers what you need. In some cases, the amount of money that you pay each month for the warranty can exceed the cost of potential repairs, or the excess that you’ll have to pay to make a claim is too high for it to be worth the cost. On top of that, warranties tend to cover certain expensive parts of the car and not other cheaper areas that break more frequently, so you may find that you are paying for cover that you never end up using. All in all, it very much depends on your circumstances and the age of your car as to whether it’s a sound investment.
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