What is a car warranty and what does it cover?
A car warranty covers the cost of the repair bill if you need to fix a problem with your car. It will often cover parts including the engine, gearbox, suspension, brakes and steering, although details will differ between policies.
Whether you buy a new or a used car, you are likely to come across something called a car warranty.
Car warranties could seem like an unnecessary extra expense to add to all the other costs related to owning a car, but having one could save you money on any expensive repairs you may face in the future.
Find out more about manufacturers’ car warranties and used car warranties, including what cover they offer and what conditions they may come with.
What is a car warranty?
A car warranty is a form of insurance. If your car gets a mechanical issue or fault, such as a problem with the engine or steering, a car warranty could pay for the parts and labour to get it fixed. It means you won’t need to pay for expensive repairs, as long as the fault is covered under your warranty.
Warranties can last for one to three years, although there are some warranties that have shorter and longer terms.
Cars normally have to be below a certain age and mileage to be eligible for a car warranty.
What are the different types of car warranty?
Confusion about car warranties can arise because there are a number of different types available, and even the same types of warranty may have slightly different names. Some warranties will come with your car purchase but you can also take out a warranty separately from an independent provider.
A manufacturers’ warranty, or a new car warranty, will come with every new car. All car manufacturers will offer a warranty on their new cars which typically lasts for three years or up to a certain mileage, but some will cover you for even longer. You don’t need to do anything to get this warranty as it comes automatically with the car.
Wherever you buy your car from, even if you’re buying it second-hand, as long as it is still within the manufacturers’ warranty period, you will be covered by it. The warranty stays with the car even if it’s resold. So, it is always worth checking if your car is still covered by the manufacturers’ warranty before you start looking at other options.
For the warranty to be valid, you will have to meet certain conditions, such as making sure your car is regularly serviced.
Once the manufacturers’ warranty finishes, you could rely on your emergency fund to pay for any essential repairs, or you could take out a new warranty. Some manufacturers will allow you to extend your warranty, but this is not compulsory and you can choose to get a new warranty elsewhere.
Extended car warranty
You can get an extended car warranty once the manufacturers’ warranty expires on a car. This too will cover the cost of repairs to your car, but the terms of the policy may be stricter and have more exclusions as your car gets older.
Manufacturers may offer you an extended car warranty once your existing one expires, but this will depend on the manufacturer and your car.
Alternatively, you can get a car warranty from an independent online provider. These warranties may be called used car or aftermarket warranties.
If you buy a car from a dealership, they may offer a limited car warranty with your car and give you the option to extend it for an added fee. However, you don’t need to take out a warranty from the dealer and, in many cases, it will make more sense to compare the cover with policies from independent providers as warranties from dealers will often be more expensive.
What does car warranty cover?
Car warranties cover the cost of repairs to your car if something goes wrong with one of its systems. For example, parts of the car that can be covered under a car warranty include the:
- Fuel system
- Gearbox and clutch
- Steering mechanisms
- Electrical systems, including in-car entertainment
- Air conditioning
Some policies will cover more parts than this, while others may have more exclusions. Before buying a policy, check exactly what the warranty covers.
Standard wear and tear won’t normally be covered under car warranties, so policies will typically exclude parts of the car that are regularly used, sometimes known as “consumables”. For example, tyres, windscreen wipers, brake pads and batteries won’t normally be covered as you would expect them to wear away with time and need replacing.
Some warranties will include some limited cover for “wear and tear”, such as if parts break or are damaged quicker than they should, but there are likely to be strict terms and conditions if you want to make a claim for this.
Roadside assistance may be included in some car warranties. However, this may only offer basic levels of protection so you might still want to consider taking out a separate breakdown cover policy.
As with most insurance policies, there will be a limit on the amount you can claim under your warranty. If your repairs cost more than this limit, you will have to pay the difference.
Terms of cover
When you look at car warranties, it’s important to check the conditions and exclusions of the cover. Not being aware of them could mean you invalidate your warranty and then not be able to make a claim when you need to. Some things could invalidate any claims you make on your car warranty include:
- Not looking after your vehicle properly. For example, not getting it serviced when you needed to, or not getting it serviced at an acceptable location.
- Modifying your vehicle.
- Continuing to use your vehicle when you are aware of a fault.
- Filling your car with the wrong fuel.
Some other terms to look out for when comparing car warranties are consequential loss and betterment.
If a warranty includes consequential loss, it means that, should a part that isn’t directly covered by the warranty fail and cause a fault in a part that is covered, the warranty will cover the repairs. Not all warranties will provide this cover.
Some warranties will have a “betterment” clause in their policy. This means that, if a repair or replacement part puts your car in a better condition than before the problem and increases its value, you may need to contribute to some of the cost. Other warranties will cover the full cost regardless of its effect on the car’s value.
What happens if I have a problem with my car?
If you see a warning light come up on your dashboard or find a problem with your car, you should stop driving as this could make the problem worse and could invalidate your claim.
You should then call your warranty provider to tell them the issue and to get help.
Once they know the issue, providers should authorise repairs and instruct you to take your car to an approved garage. If the garage is approved by the warranty provider, or is run by the manufacturer or dealer that provided the warranty, the costs should automatically be covered without you needing to do anything except pay the excess. However, you may need to pay towards some of the repairs if they cost more than the claims limit for example.
In some cases, you may need to pay the garage for the repairs upfront and then claim them back from the warranty provider.
Make sure you check your policy so you know how to make a claim if you do find a fault with your car.
Bear in mind that, whether you have a car warranty or not, everyone has certain rights under the Consumer Rights Act 2015 when buying a car from a dealer. If your car is faulty, you may be eligible for a full refund within 30 days, or a partial refund or repairs after this time.
Where can I get a car warranty?
If you buy a brand-new or nearly-new car, check if you are covered by the manufacturers’ warranty. You won’t need to do anything to get this cover as it comes with the vehicle. Once this expires, you may be able to extend this by a year or potentially even longer.
If you buy a used car from a dealership and its manufacturers’ warranty has expired, you may be able to buy a warranty from the dealer. However, dealer warranties can come with strict conditions and you may be able to find cheaper options elsewhere.
This leads us on to independent, online providers. After you have purchased your car, you can take out a car warranty from an online provider, comparing prices and the cover offered by each policy. Looking at the different options can help you to find the car warranty policy you prefer and that is most suitable to you, rather than simply taking the one offered by the dealership.
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Rhiannon is a financial writer for NerdWallet, with a particular interest in personal finance and insurance guides for consumers. Read more