What should you consider when agreeing on a car warranty?

If you’ve just bought a new car, upgraded your old one, or are thinking of doing either in the near future, then you may already be thinking about getting a new car warranty; and you wouldn’t be alone.

It's only natural to want to protect your new car by getting a warranty to cover any mechanical and electrical faults that could develop within the first year or two, but not all warranties are the same.

A good warranty can be an extremely valuable part of a new car deal, especially on a used car, but it's important to know what warranties cover and whether they’re right for you.

Much like car finance and insurance, it's often a balancing act between cover and cost, meaning it's always best to shop around till you find a warranty that is best suited for your needs.

What is a car warranty?

A car warranty, or mechanical breakdown insurance, is a contract that helps to cover the associated costs of specific car parts, and the labour time required for mechanics to fix faults in your car. They cover a set list of parts, period of time, and mileage limit within which you can make a claim.

In other words, a car warranty provides a financial safety net should something go wrong with your new vehicle.

What does car warranty cover?

The coverage of warranties on both new and used cars can vary greatly. However, you’ll likely find that most will cover some or all of the following parts:

· Engines

· Transmission systems

· Fuel and ignition systems

· Cooling systems

· Electrics

· Gearboxes

· Steering

· Suspension

· Non-frictional clutches

· Brake system parts

Before you commit to any warranty, you should always check the specific terms and conditions of a policy you’re interested in to see what is and isn’t covered.

Failure to do this may very well mean that your car ends up needing a repair that you’re not covered for.

How does a car warranty work?

Making a claim on your car warranty is designed to be as simple a process as possible. All you have to do is reach out to your associated warranty provider and ask them to cover the required costs of your car repairs. This payment will then be sent to the associated garage or reimbursed to you.

However, bear in mind that a warranty might not cover the full costs of required repairs and labour, so it’s best to make note of any claim and labour limits that could dictate maximum cover costs.

And whatever you do, do not go to a third-party repair service before making a claim or you will invalidate your warranty.

What is excluded from a car warranty?

What’s excluded from a car warranty is down to the terms and conditions of the policy that you sign up for. While a car warranty will cover many parts of your car, in most cases, it will not cover parts that tend to break due to ‘wear-and-tear’. This means you often won’t be covered for parts such as:

· Clutches

· Brake pads

· Exhausts

· Tyres

· Catalytic converters

· Bodywork

· Paintwork

· Glass

· Headlights

You’ll also want to consider what’s known as consequential damage. This is when a part fails and that failure causes damage to another part of the car.

Under many policies, this type of damage is not covered. So, once again, it is crucial that you read through and understand the full terms and conditions of any policy that you’re thinking of taking out so you have a full understanding of what’s covered.

How much does a car warranty cost?

As you may expect, car warranty costs can vary greatly between insurers, making it difficult to put an accurate average price on a traditional policy.

Generally speaking, the cost of your policy will be dictated by a variety of factors, such as:

· Your car’s age.

· Your car’s manufacturer

· Your car’s model

· Your car’s mileage

· Your car’s service history

For the best deal, you’ll want to pick a reliable car with low mileage and good service history. However, even if you don’t have these, shopping around for policies will usually help you find a reasonably priced deal that will cover what you need.

How long does a car warranty last?

Traditional warranties on new cars tend to extend to a minimum of 3 years, while extended warranties generally last for 12 months from most manufacturers and third-party providers. However, there are sometimes exceptions to this, and you may very well find policies that extend their warranties over longer periods.

Is a car warranty worth it?

There really is no straightforward answer to whether or not it’s worth getting a warranty for your car; it all depends upon your personal circumstances and your attitude to risk.

If you have the money in the bank to deal with any unexpected costly repairs, you may think that purchasing an extended warranty isn’t necessary. However, if you’re on a budget, paying out a fixed yearly amount to cover yourself for any larger repairs might make financial sense.

When it comes to deciding on getting a car warranty, it’s best to look at the advantages and disadvantages they offer.

Car warranty advantages include:

· The ability to budget your car expenses more easily

· The total cost of a warranty being far less than you would usually pay for a major repair

· A wide choice of policy options, enabling you to get a good deal

Car warranty disadvantages include:

· Potentially wasting money if your car never needs to be repaired

· Policy limitations that don’t cover you for everything that could go wrong

· Potential limits on using certain repair providers that may not be local to you

If you’re undecided as to whether or not you think you need a car warranty, the best option is to find a range of quotes for extended warranties from your car’s manufacturer or third-party providers. Once you have some prices in front of you and have been able to read in detail what each policy covers, you’ll likely find this decision much easier to make.

Of course, if budgeting is your primary concern when it comes to covering the cost of a car, then our car finance experts may be able to help. From PCP finance to bad credit car finance, our expert team is on hand to help you afford the car of your dreams.

Get in touch with us today to see how we can help and don’t forget to visit our blog for more insightful articles like this one, such as what other costs you need to consider when buying a car.