Car warranty

If you’re looking at taking out a car warranty policy, we explain what types of repairs a car warranty will cover you for and look at whether a policy like this is good value for money. You can compare different cover options below as well.

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What is a car warranty?

When you buy a new car, you get a warranty included in the price. This covers the cost of both parts and labour after a mechanical or electrical failure in your vehicle and usually lasts a few years.

However, if the original manufacturer warranty has run out or if you’re looking to cover a used car, you can also car warranty insurance from a third party.

A third-party warranty can cover the cost of repairing your car if it suffers from a mechanical breakdown or electrical failure. Some will even cover you for wear and tear.

Why buy an extended car warranty?

While cars have become more reliable over the years, they’ve also become more complicated machines with increasingly expensive parts.

Some people can change a tire or do some basic checks to their car, but few can repair serious mechanical faults. If you’ve bought your car from new but its warranty’s expired, or you bought it second hand, if something goes wrong you might be left with a hefty bill, especially if it requires new parts. With an extended car warranty, this will be taken care of and can even speed up the repair process.

What’s covered under a car warranty policy?

A car warranty can cover the cost of fixing your car should it break down. Of course, what’s covered depends on your policy, so check the finer details. A good value warranty should pay for the following repairs:

• Engine
• Transmission system
• Fuel and ignition system
• Gearbox
• Steering-
• Suspension
• Clutch
• Brake system
• Electrics
• Air conditioning or cooling system

What different types of car warranty are there?

There are a few types of car warranty available:

• Manufacturer warranty. This is the warranty that comes with the car when you buy it from new, and it’s usually included in the purchase price. With this warranty, the manufacturer will repair any mechanical faults that occur, as long as they happen within a set number of years or miles (usually 3 years or 60,000 miles, though this can vary).
• Dealer used car warranty. If you buy a used car from a dealer, it will usually come with a warranty included. This type of warranty can be expensive and it typically only lasts for up to 12 months (though some dealers might offer longer cover). Note that fault resulting from where and tear are not usually included, although this is the reason for most claims.
• Third party car warranty. You can purchase an extended car warranty from an insurer independently of your car purchase. Some providers include this in their comprehensive car insurance policy, whereas for some this will be an optional extra that requires an additional premium.

Why do you need a car warranty?

You need a car warranty to cover unexpected malfunctions in your vehicle, that can cost you a lot of money if you have to pay for them yourself.

New cars usually come with a warranty included, but it expires after a set time (usually no more than a few years). Second hand cars usually don’t come with a warranty (unless bought from a dealer).

Make sure you shop around when looking for a policy, as prices do vary.

Is a car warranty worth my money?

A car warranty can be expensive and usually comes with a long list of conditions and exclusions, which mean that the provider might refuse to cover the repair.

Wear and tear is usually excluded and there’s a lot of grey area when it comes to what constitutes a mechanical problem and what has been caused by wear and tear.

That said, paying to fix mechanical problems yourself can be very expensive as well. If you have a local garage that you have a good relationship with, you might not need a warranty. It might be a good idea to seek the mechanics’ advice about taking out a warranty (they get paid either way).

If you do decide to buy a warranty, simply choosing the cheapest policy or getting your car warranty from the point of purchase of your car, without considering the alternatives, could see you losing out.

However, if you find the right policy, it could save you a lot.

What’s the average cost of an extended car warranty?

There isn’t a one-price-fits-all policy when it comes to taking out a car warranty. Here are some things that can impact the price.

• Age of your car
• Make and model of your car
• Value of your car
• Annual mileage
• Use of car (business or personal)
• Level of cover you opt for

How to choose the best car warranty?

1. Decide what matters to you. Different people will want different bits of cover. Decide what matters most to you and look for companies that provide that.
2. Check if you’re already covered. Some car insurance policies already include cover for mechanical breakdowns if the car is out of warranty. Others will offer it as an optional extra for an additional premium. Make sure you check your car insurance policy documents to see what’s already included.
3. Compare policy features. Look at what each company is offering. A good car warranty will include at least some cover for wear and tear and allow ample time for the garage to diagnose the problem with the car.
4. Remember that cheapest isn’t always best. Don’t be tempted to just go with the cheapest provider, but make sure the cover on offer is sufficient to your needs.
5. Compare policies and get a range of quotes. It always pays to shop around and compare providers to find a policy that gives you your desired level of cover.

What should I look out for in car warranty insurance?

What is important to one person, may not be to another. When shopping for a car warranty, there are a number of things you should consider in relation to your personal circumstances:

• Which parts and parts costs are covered.
• What maintenance is required to retain validity.
• Which garages you can use for repairs (can you choose for yourself, or is there a list of approved repairers?).
• Are the full garage hourly labour costs covered?
• Is there s a repair excess to pay and, if so, how much is it?
• Is there a mileage restriction?
• Does it cover failures due to all types of wear and tear?
• Is consequential damage or loss covered?
• Will it pay for diagnostic time?
• Does it cover failures due to overheating?
• Are the faults that are identified at the garage during service or MOT covered?
• What is the individual and total claim limit?
• Are there any additional benefits included?

Could my warranty claim be rejected?

Unfortunately, yes. It is up to you to make sure you comply with all conditions to avoid having your claim rejected.

Some possible reasons for rejection include:

• You use your vehicle after a warning light has appeared on the dashboard
• You drive your vehicle in spite of a noticeable mechanical or electrical fault
• You fail to have your vehicle serviced according to the recommended schedule
• You make modifications to the vehicle, or fit non-standard or non-manufacturer approved parts
• You fill up the tank with the wrong fuel or fluids
• You don’t follow the stated warranty claim procedure correctly

If your claim was rejected, talk to your insurer and make sure you find out why and if there’s anything you can do to change the decision (like refill the application).

Bottom line

If your car is out of warranty, buying a warranty can save you a lot of money if your car suffers a major mechanical breakdown. However, if it doesn’t, you might end up throwing a lot of money away, as extended warranties can be expensive.

Before you purchase a policy, check what your car insurance includes, as it may cover mechanical failures for cars that are out of warranty. If it doesn’t, you might be able to add an extended warranty to your cover for an additional fee, which might still be less than you would pay for a separate policy.

Frequently asked questions

• What parts and part costs are covered?

  Parts that won’t typically be covered under a warranty are: “service”, “frictional”, “disposable” or “consumable” parts. These are generally: wheels, tyres, exhausts, batteries, wiper blades, clutch plates and parts routinely replaced at a service.

  As the car ages, some parts might also become excluded from cover. The amount you are covered for might also reduce.

  Some provider allow you to create your own list for what should and shouldn’t be covered under your policy. This can provide some flexibility, but really a good insurer should create this list for you, with your car’s age and mileage in mind.

  Even if the car warranty covers all mechanical and electrical failures there may still be claims limitations, so make sure you read your policy documents carefully and know exactly what is and isn’t covered.

• Does it cove the full garage hourly labour costs?

  Often, labour costs for fixing a car outweigh the cost of parts. This perhaps why many insurers cover labour costs, but cap the amount they are willing to pay. This can leave you with a large bill to pay on top of your regular premiums.

  That’s why you should always check what maximum hourly rate the car warranty company will pay, and whether’s there’s a limit – either on a single repair job, or as an annual cap.

• Which garages can you use for your repairs?

  Some insurers insist that you get your car fixed at one of their approved garages. This is usually due to agreements they have in place with the garages that mean they get discounted repairs. While this works well for the insurers, it means that you have limited options when it comes to repairing your car.

  Before purchasing a policy, check whether there are restrictions that apply to repairs and, if there are, whether there’s an approved garage you can use near you.

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

• Is there a repair excess to pay?

  Many providers will require you to pay an excess towards the cost of your repair. If the amount you have to pay is a high one (anything near or above £100), the policy is unlikely to be worth your while financially. Try finding a policy with an excess of £50 or less to get the most out of the cover.

• Is there a mileage restriction?

  When you take out a car warranty, you’ll be asked by the insurer how many miles your car has on it. Finding a warranty for a car with more than 100,000 on the clock may be difficult, though cover is available up to 150,000 miles.

  You’ll also be asked to estimate how many miles your car does per year. There may be a restriction by the insurer on how many miles you can drive to stay covered, but this is usually a generous one and should be enough for the average motorist.

  In some cases, the benefits you receive from the cover or your excess amount might be affected by your mileage.

• What maintenance is required to keep the warranty valid?

  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.

  Most will also stipulate minimum care criteria for your vehicle. This is usually in line with recommended care for the car, and so includes things that you should be doing anyway.

  However, some companies will require you to have your MOT and check ups done at a garage of their choosing. This can mean paying more for the services, so make sure to check if this is the case before purchasing the cover.

• Will everyday wear and tear be covered?

  Many providers have a clause in their policy documents relating to the exclusion of wear and tear claims from cover. As wear and tear applies to the majority of claims, this can be used by insurers to avoid paying in a wide range of situations.

  In response to criticism, many of the UK’s leading car warranty providers now incorporate car warranty parts protection for wear and tear-related damage. However, don’t assume this is included and make sure to check the policy documents carefully for any exclusions.

  Note that, possibly to cause confusions, different phrases are used to describe wear and tear damage, including “premature”, “gradual”, “general”, “usual” and “normal”.

• Does it cover consequential damage or loss?

  Consequential damage occurs when a non-covered part fails causing a covered part to fail. Something minor can go wrong and end up causing your engine to fail, which is likely to cost a lot of money to fix. If neither consequential damage or whatever part caused the initial damage are included in your cover, then you’ll have to pay for a new engine.

• Will it pay for a diagnostic time?

  Figuring out what the problem is in the first place can take time, and, as they say, time is money. This is especially true if there’s a cap on how many labour hours your warranty covers. A car warranty that doesn’t allow for a reasonable amount of diagnostic time might leave you with a big bill to pay.

• Are the faults that are identified at the garage during service or MOT covered?

  Some car warranties don’t cover these. As the MOT is many people’s only annual trip the garage, this can mean the policy is not worth the money.

• Does it cover overheating failures?

  A good car warranty will cover overheating, as this can often result in catastrophic failure. As ling as you maintain the car properly (like changing the cambelt in accordance with manufacturer recommendation), your warranty should pay for the repairs.