Purchasing a car can be an exciting time, despite having many things to think about during the process. Often a vehicle’s warranty is not a priority, but buyers should definitely spend time thinking about this important factor.

A vehicle warranty is not as straightforward as that for other consumer products, plus there are many differences between providers. So, it pays to give them good consideration.

The first step in understanding vehicle warranties is knowing what types of warranties are available and what the differences are.

A manufacturer (or factory) warranty comes with the purchase of a new car, is included in the price and is often used as a selling point to offer a buyer security and confidence when purchasing a new vehicle. These warranties are usually fairly comprehensive and are backed by the manufacturer of the car. They will often have a timeframe of three years or 100,000 kilometres, whichever occurs first. It’s not uncommon for certain services to be carried out to maintain the validity of the warranty, such as specifying the vehicle is serviced at a specific location and at particular intervals.

Beyond this, you can purchase extended warranties at an additional cost. There’s often an option to purchase an extension of the manufacturer’s warranty, which either offers an expansion on the timeline, or offers the same terms to the original but not as inclusive or comprehensive.

A car dealership can also offer a separate warranty with different terms. These dealers’ warranties can vary a lot and will likely not be as comprehensive as the original manufacturer’s warranty.

When buying a newer used car, the manufacturer’s warranty may still be valid. In this case, you may not need to purchase anything additional. If your manufacturer’s warranty expires, you can also opt for alternative forms of cover such as mechanical breakdown insurance for mechanical or electrical failures.

Coverage

Vehicle warranties offer you cover and protection against the costs of certain faults or repairs required for your vehicle. They don’t usually cover wear and tear, accidents or regular maintenance and servicing. As much as a salesperson or dealer may lead you to believe that everything you need is included in your warranty agreement, it’s only what’s explicitly stated in the contract that matters.

A warranty will typically cover:

  • General repairs
  • Faults or defects
  • Vehicle systems

And exclude:

  • Wear and tear
  • Accidents
  • Regular maintenance
  • Servicing
  • On-road costs

As a rule, the more expensive a warranty, the more comprehensive it’s likely to be. Check to see what is offered above the Consumer Guarantees Act (CGA). This is particularly important when purchasing used cars with dealers’ warranties where the warranty may offer few benefits not already covered by the CGA.

Check the fine print

Knowing what your warranty doesn’t cover is just as important as what it does. Many warranties have exclusions and clauses for services required to maintain the validity of your warranty. For example, many manufacturer’s warranties stipulate that any repairs or replacement parts must be genuine and that the vehicle needs to be regularly serviced and maintained.

If you’re unsure about whether your warranty will cover a particular scenario or not, it’s worth asking before your purchase. It’s best to spend time understanding the warranty you’re purchasing at the time of purchase, rather than leaving it until you need a repair.