A car warranty is effectively an insurance policy covering your car against selected faults and problems. It’s also a legal contract between buyer and manufacturer, with each party having responsibilities to fulfil.
New car warranties
For new cars, a manufacturer's warranty will cover mechanical and electrical problems, and other long-term quality-control issues such as corrosion or parts that wear out prematurely. The manufacturer is expected to pay for or carry out repairs if the items covered by the warranty go wrong within prescribed time periods.
These warranty periods vary between manufacturers. Most new car warranties offer three years cover, but some are as long as seven years. Others – ironically, often the more expensive marques – are considerably shorter.
Used car warranties
For used cars bought from dealers, a short warranty will often be added on if the car is outside its manufacturer warranty. This, too, will generally cover mechanical and electrical breakdowns, but will last for a much shorter period of time – as little as a month from smaller garages, although as much as 12 months with unlimited mileage. Other benefits may be offered as part of a manufacturer’s approved used car scheme.
Every warranty will have a list of parts that are covered. These lists can vary widely. Not all car warranty providers cover consequential damage, which is where a covered part fails as a result of the failure of another part that’s not on the warranty list.
It’s a good idea to read up on what is and isn’t covered by your car’s warranty. Motor warranties protect you against unexpected failure but they’re not always maintenance contracts, and they don’t always cover breakdowns that arise through normal wear and tear. If a warranty provider claims to cover wear and tear‚ check whether it covers normal deterioration: some parts may have a life span of only one year.
Warranty documentation needs to be read very carefully for used cars in particular, because the level of coverage is less comprehensive than for new cars. If items that you feel should be covered don’t seem to be, you need to clear this up before committing to the purchase. Arguing the point after the car has been bought is very unlikely to generate a positive result.
Sticking to the rules
Warranties are written by lawyers. That means your warranty will be invalid if you don’t follow the rules. New car warranties can be invalidated if you don’t stick to the service intervals specified by the manufacturer. That interval might be every 20,000 miles, but with today’s ‘intelligent’ servicing it could be fewer if your car has had a hard life since its last service. Remember, though, that it’s no longer compulsory to use a franchised dealer for servicing, so if you shop around you can follow the manufacturer’s rules without having to pay more than you have to.
Obviously, it’s impossible to hit a fixed service interval point bang on. There’s some leeway, but never assume that a few hundred miles over the nominated point will be all right. Communication with the manufacturer is key.
If the idea of your car’s warranty expiring makes you nervous, you can buy aftermarket cover, either to dovetail from your existing warranty or at a later point. As with new car warranties, used warranties will require you to stick to a service schedule. However, as with new warranties, you should be at liberty to choose where that servicing is carried out.
Aftermarket warranty prices vary, but so do the terms and levels of cover, so always compare like with like. It’s usually cheaper to deal with warranty suppliers direct than through a car dealer or warranty broker. You can usually transfer your warranty to a new owner as long as they’re a private owner and not a dealer.