If you zone out a bit and start dreaming of tropical beaches when your car dealer starts talking about warranties, you are not alone. They sound like an awful lot of jargon that will cost you money, and you probably feel convinced you won’t see any benefit. Understanding warranties and the difference between a manufacturer warranty and extended warranty can help you decide whether you should be paying extra for this.
What is a car warranty?
A warranty is more than just a piece of paper; it is in agreement that if certain things go wrong, they will be rectified at no cost to you, the vehicle owner. They are designed to offer peace of mind, and therefore manufacturer warranty is a standard offering on a brand-new vehicle. Carmakers understand that sometimes with mass production, errors can occur, and they will take responsibility for these and put things right. Of course, the more a vehicle is used, the older the parts become, and mechanical failure becomes more possible. What you need to understand is what will be covered under the terms of your warranty and what won’t, especially if you are considering paying for an extended warranty or purchasing an aftermarket warranty with a second-hand vehicle.
Not for Accidents
One of the most common misconceptions is that a warranty will cover accidental damage. Whether you reversed into a wall or were involved in an accident, this is not something your warranty will cover. Accidental damage falls under the remit of your car insurance, and you will have to weigh up the cost of your excess, plus an annual increase in making a claim and decide whether it is worth pursuing through the insurance or whether you should pay for it out of your pocket. A warranty is designed to cover mechanical failure, and the terms tend to be quite specific. Factory defects, for example, will be covered, but consumables like tyres will not. Manufacturer warranty will generally require you to take the vehicle to the dealership for any work to be carried out; an extended warranty may give you an option of using a variety of garages.
Extended Warranties
Extended warranties can often be more flexible provided they are purchased via a third-party, not the main dealer. Manufacturers tend only to offer extended warranties on a limited basis, and the terms and conditions are quite strict. Shopping around for third party extended warranty Will reveal a whole new world well you will be able to customise the cover to suit your needs. Some companies will allow you to pay monthly for your premium, others will insist on payment upfront. You might find that recovery and towing costs are included with some but not all, and these are just a few of the differences. If you have weighed up the pros and cons and decided that an extended warranty sounds like a good idea, you then need to play super sleuth to make sure that you are getting the best deal for your money.