Car Warranties
Made Easy

Cars have become increasingly reliable but, at the same time, increasingly complex. Diagnosing what’s wrong can take an age and when they find the problem, curing it can often prove difficult, parts are expensive and the cost of an hour’s labour has been known to exceed £200.

If you’re not a car buff and your car does go wrong, chances are that you’ll be in a world that is completely alien to you and asked for decisions by the repairer that you’re unqualified to make. And what choice will you have? Leave the car where it is and walk home, move it elsewhere and start again, or just pay the bill and put it down to experience. Most of us do the latter and drive away miffed! Add the possibility of parts shortages to cause even more delay and the thought of a breakdown gets seriously worrying. That’s where an extended car warranty can help, and you can buy one today for the car on your drive.

A car warranty is a guarantee, or insurance, that covers the cost of repairs and maintenance work on a specified product.

Car warranties are among the most common and are specifically designed to pay the parts and labour costs for sudden and unexpected repairs to the vehicle they cover.

A car warranty won’t cover accidental damage or work required resulting from an accident - this will be covered by a comprehensive car insurance policy. Neither will it cover consumable, frictional or service parts such as brake pads, wiper blades, clutch plates and filters, unless they are found to be faulty from new.

Manufacturer warranty

A car warranty is a guarantee included in the new car price when first registered. The manufacturer will rectify faults that occur within a set number of years or miles (3 years or 60,000 miles being most common).

New car warranties that extend beyond 3 years will often contain caveats to retain their validity and you will find that the extent of the cover often deteriorates as the car ages or reaches higher mileages. Don’t let this catch you out later into your ownership or you might find yourself with a bill you weren’t expecting.

Dealer Used Car Warranty

Used cars bought from dealers will normally come with a car warranty included. Main dealers will tend to be tied-in to the manufacturer’s extended car warranty cover for the cars of their marque. This cover will be reasonably extensive, last for twelve months, with realistic claim limits, but it won’t cover parts that fail due to wear and tear and this is where most claims arise.

Dealers also take in part-exchanges and these will be sold with either the dealer’s own car warranty or one sourced from a third-party provider, whereby coverage and limits will be aimed at reducing the dealer’s future exposure. This will possibly be even more apparent if you buy from an independent garage or used car supermarket. In every case, you will need to check if you are obliged to return to the seller for any repairs – not much fun if you live 100 miles away! You might also find yourself with the residue of the manufacturer’s car warranty, topped-up by a less comprehensive extension, so be aware of shortcomings!

Car warranties offered by Independent garages will often have very short cover periods of 3 or 6 months, with larger Independents sometimes offering 12, but the price of the car is likely to increase alongside the period of cover included. Consider accepting a shorter car warranty period and seek out an extended car warranty from a specialist provider because their cover is often better and more likely to pay-out when problems arise.

The main attraction of a car warranty is that it protects you from unexpected and sometimes very expensive repair costs should something go wrong with your vehicle.

Most manufacturers now include new car warranties as standard with the sale of brand new cars.

However, if you own a car without a car warranty or are about to buy second-hand and you think you might struggle to cover the cost of something major going wrong, then a car warranty is likely to be a good idea.

When looking around, be aware that cover and price will vary, so be careful about the company and cover you choose so not to end up with a car warranty that doesn’t pay-out when you need it.

Simply choosing the cheapest policy or getting your car warranty from the garage you purchased your car from, without considering the alternatives, could see you losing out.

Here’s our list of things to check so that you’ll have the best combination of price and cover if the worst happens.

What parts and parts costs are covered?

Which garages can you use for repairs?

Does it cover the full garage hourly labour costs?

Is there a repair excess to pay?

Is there a mileage restriction?

What maintenance is required to retain validity?

Will it cover failures due to all types of wear and tear?

Does it cover consequential damage/loss?

Are faults identified by the garage at MOT or service covered?

Will it pay for diagnostic time?

Does it cover failures due to overheating?

What is the individual and total claim limit?

What additional benefits are included?

‘Service’, ‘frictional’, ‘disposable’ or ‘consumable’ parts won’t be covered. These are generally: wheels, tyres, exhausts, batteries, wiper blades, clutch plates and parts routinely replaced at a service.

You may find that the parts covered, or the provider’s contribution towards the repair costs, reduces as the car ages or completes higher mileages.

Even if the car warranty covers all mechanical and electrical failures there may still be claims limitations that will stop you getting paid for that engine or gearbox! So, knowing exactly which parts of your vehicle are covered by a car warranty is vital.

Some car warranties allow you to ‘pick and mix’, or add to the basic cover levels. A good car warranty provider should be offering appropriate cover for the age and mileage of your car and not leaving you to create your own list. But, if you decide to ‘build your own’ check out all the parts that can be protected and check that your selected plan or policy meets your needs before you buy.

Many repairs cost more in labour than they do for parts. A car warranty will often restrict you to a maximum labour rate for any work and, particularly if this includes VAT, you may find yourself having to contribute a significant amount to get your car back on the road.

Many companies will cover labour costs but cap the amount they are willing to pay.

This means you need to check the maximum hourly rate that the car warranty company will pay, and whether a maximum claim limit applies - either on a single repair job, or as an annual cap.

You’ll also need to double check that this limit is sufficient to cover repair work at your preferred garage, otherwise you’ll need to make up the difference.

Finding out exactly what is wrong with a car can also take considerable time and many car warranty policies don’t extend their cover to pay for the labour costs involved with diagnostic testing. As a result, you need to check that this would be covered by the garage completing the repair work, or make sure it is covered by your car warranty, or you could face having to pay for several hours of labour costs before the repair work even begins.

Some car warranty companies restrict where you can take your car for repair work. This is usually due to business agreements companies have with certain garage networks that means they get discount repair rates. However, more importantly it can restrict where you can take your car to get it fixed.

For this reason, you must check whether you get to choose which garage you take your car to, or whether you are only able to use a garage that forms part of the car car warranty company’s restricted network of garages. If the latter applies then you’ll need to check that there is an approved garage near you, and that the cover for labour charges, provided by the car warranty company you are looking at, is sufficient.

If you are unhappy with the choice of garages available through a car warranty provider, consider looking elsewhere for more flexible cover.

Car warranties often stipulate an excess that you will need to pay each time you claim. The amount you’ll need to cough up will vary significantly from provider to provider and will ultimately affect whether a policy is worth having.

For example, if you have to pay the first £250 of any claim, then you are unlikely to see any real financial benefit should something go wrong, even if it is a cheap policy in the first place.

Instead you need to look for a policy that offers suitable cover at an affordable price with the lowest excess; £50 or less is commonplace to make the cost of making a claim worthwhile.

When you take out the cover you will be asked for your current mileage. If it’s over 100,000 miles then getting suitable cover may be more difficult, although cover is available up to around 150,000 miles. Once accepted, the annual mileages allowed may vary but any restrictions are normally generous and plenty enough for the average motorist.

Some car warranty providers also offer tiered levels of cover where the amount of benefits you receive or the amount you would have to contribute to repairs depends on the number of miles you drive.

Most car warranties will stipulate minimum care criteria for your vehicle.

Any car warranty you take out will only be valid if you have an up to date MOT and have had a service in the last 12 months.

Some providers, usually franchised dealers, will require you to have your MOT and service completed at a listed garage, rather than your choice of independent garage, for the duration of the car warranty. This is often a good way for the provider to guarantee repeat business but can mean that you pay more for these services than you would ordinarily.

Check if this is the case and whether you’re happy with the servicing arrangements before you buy. Some providers may even help you by providing low-cost service and MOT arrangements.

Many car warranty documents include a clause in their terms and conditions which specifically excludes claims deemed to be caused by wear and tear. As this can be applied to such a wide range of problems, it can be used by car warranty providers to avoid paying for repairs. It is estimated that some 70% of claims can be attributed to wear and tear.

However, in response to complaints about rejected claims received in the past, several of the UK’s leading car warranty providers now incorporate car warranty parts protection for wear and tear-related damage.

That said, you still need to carefully check each car warranty policy for conditions relating to wear and tear before you buy. To confuse, there are different definitions of wear and tear: ‘premature’, ‘gradual’, ‘general’, ‘usual’ and ‘normal’ wear and tear are often phrased to avoid claims by seemingly bona fide car warranty companies. Everything is bound to wear out eventually and the best car warranty providers understand this and accommodate this risk, relying on age and mileage cover restrictions to protect them from a certainty of claims. If you are unsure exactly what would be covered, contact the company directly to check so you know exactly where you stand before you make your choice.

Consequential damage occurs when a non-covered part fails causing a covered part to fail. A failed alternator belt tangling with a cambelt could result in a blown engine and a big bill. The car warranty is unlikely to cover the alternator belt so if consequential damage isn’t covered the bill is likely to be yours!

Some car warranties don’t cover these. Amazing, but true! This may be your only annual trip to the garage so if the faults found here aren’t covered you might be in trouble.

Diagnosis often takes longer than the actual repair. A car warranty that doesn’t allow for a reasonable amount of diagnostic time might therefore leave you with a hefty bill.

A good car warranty will cover overheating which can often result in catastrophic failure. If the cambelt snaps the engine is likely to overheat and ultimately fail. As long as the cambelt has been changed when recommended by the manufacturer, a good car warranty should pay for repairs.

If you buy a car warranty with a £500 claim limit it will be cheap, but it won’t cover many repairs. You may also find that an annual limit is set or that only a certain number of claims are allowable in a given period. Ideally, the claim limit should be as high as the value of your car.

Aside from repairing faults and paying for work needed for your car, many car warranty policies now include a number of other benefits designed to ‘sweeten the deal‘.

While these added extras can be beneficial and often make your life that little bit easier, you should avoid picking a car warranty solely on the additional features it offers.

Instead you need to focus on what the car warranty covers, its costs and any exclusions, only looking at the following additional benefits as the final piece of the puzzle.

Breakdown cover

Several independent car warranty companies include a breakdown service with their cover. This is designed to extend the cover offered by a car warranty from the garage forecourt to the roadside, and covers the costs of transporting your car to a garage for repairs.

As with other features, however, you need to check exactly what’s included and whether it truly stacks up to dedicated breakdown cover offered by mainstream providers.

You also need to be happy that the extra you have to pay for the cover actually represents value for money or whether you would save money by getting the extra cover elsewhere.

Car hire

Car hire if your car is off the road is now available with some policies. While this may be a nice extra, ask yourself if this is a benefit you would realistically need to use and whether it’s worth any extra cost.

Overnight accommodation

Some providers have extended their cover to include accommodation costs should your vehicle fail and you have to check into a hotel as a result. As with other extras you need to ask whether you are ever likely to use this feature or whether you would simply prefer to pay for a hotel room, if you ever need to.

Many car warranties, especially from franchised dealers, can be quite expensive and sometimes cost more than many standard repair jobs.

An extended car warranty will probably prove excellent value if your engine blows-up but less so, if you never claim on it. The peace of mind, though, can be a real plus, just knowing that you won’t suddenly have to pay a big bill. Of course, you may end up paying upfront for repair work that your car never actually needs. It’s not dissimilar to contents insurance for your home, or taking out cover for your boiler, but probably much better value.

Getting the best car warranty for your car isn’t simply a matter of choosing the cheapest car warranty or most comprehensive policy. Instead you need to consider what you need from your car warranty and how long you need cover for.

You shouldn’t just buy it from the garage that sells you the car, instead you need to compare the car warranty they offer with those available from independent car warranty providers.

Although you hope that you won’t encounter any problems when you own or are about to purchase a car, it makes sense to do a bit of research on the model involved. This research can be particularly useful when you come to compare car warranties.

Try to find out what are the most common problems other car owners have encountered in the past and at roughly what mileage they start to occur. This way you can list the most common faults that your car is susceptible to and check that car warranty repairs would cover the costs should you encounter the same problems.