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Car warranty advice

Understanding your warranty policy

Check your terms and conditions to make sure you understand when you're covered – and when you're not

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If you buy a new car from a showroom, you’ll get at least three years warranty (or up to seven in some cases) for at least the next 60,000 miles (or more) and, therefore, peace of mind that if your car breaks, you’re covered.

But what if you’re buying a used car?

By its very nature, a used car has had a life before you bought it. That brings inevitable wear and tear, and quite possibly some mechanical trauma that has yet to surface.

A near-new vehicle, like an ex-demonstrator or an ex-rental car, will probably still have a couple years still left on its new car warranty. But what happens when that runs out, or the car you’re buying is already out of it manufacturer warranty?

As cars get older, the chances of something going bang inevitably increases. Car dealers know this, which is why older cars usually come with a very limited warranty policy – or even no warranty at all. Even assuming that the dealership is conscientious about inspecting and preparing its used cars before selling them, it’s still very easy for faults to go unnoticed until after the buyer has driven off the forecourt.

What about buying your own used car warranty policy?

So you consider taking out a used car warranty yourself. Even though it’s going to add to the cost of the car buying experience, the peace of mind alone may be well worth the outlay. And, if you do have to make a claim in the event of a problem, it could well save you a lot more than you paid in premiums.

But just how protected are you really?

A car warranty – or mechanical breakdown insurance – is designed to protect you in the event of an unforeseen failure. While the actual level of cover can vary from policy to policy, car warranties will usually cover the most important parts. Being covered by a car warranty means you aren’t left alone to deal with the mess.

And a warranty policy don’t just take care of the cost of replacement parts. They can also cover labour and (depending on your level of cover) important extras such as car hire. So, for many motorists, particularly those that drive long distances or rely on their car every day, it can prove a smart investment.

Time to check the fine print of your warranty policy

Before you sign up to any warranty policy, what should you look for? What is covered and what is not included? The important thing is to take your time checking the terms and conditions of the policy you’ve been offered.

Plenty of people buy a used car warranty without properly looking at what they’re getting, then find themselves disappointed when it comes to making a claim. That’s according to warranty specialists ALA Insurance, one of the largest suppliers of motor insurance-related products in the UK (and a commercial partner of The Car Expert).

The team at ALA say there are important details you should look for or consider when thinking about a used car warranty. They include:

  • Make sure you choose a level of cover that you are comfortable with and you are clear on what is included. If in doubt, ask for advice and don’t agree to anything until it has been explained to you.
  • Ensure you know what’s not covered. These will include: serviceable parts that wear out; accessories; items claimable under a manufacturer’s warranty; and any repair that is greater than the purchase price of the vehicle.
  • Look for cover that includes consequential damage – where one part of your car breaks down and causes the mechanical failure of another part. Many warranty providers will exclude this type of damage from cover.
  • Always check the claim limit – many policies are restricted, perhaps to £5,000 or even £1,000 regardless of the damage. Make sure you know what you would get in the event of a big repair bill.
  • Stay away from betterment clauses. Ensure your warranty does not contain a betterment clause, where the insurer considers that a replacement part is greater quality than the broken part it is replacing and is therefore ‘better’. Under these clauses you could be asked to contribute towards a repair.
  • Find a policy that is only restricted by the vehicle’s value – it’s a real positive and gives you greater peace of mind.
  • Maintain your car well. It’s important to keep your vehicle in good condition because you could lose out on a claim if you haven’t carried out routine maintenance such as oil changes or regular servicing.
  • Keep all the receipts of any products you’ve bought or any work you have had done, just in case you’re asked to offer proof.
  • Ensure you have an up-to-date full service history or, at least, some partial history documents, and that you are familiar with them.
  • Read the Ts & Cs thoroughly, understand them and ask the provider to explain anything you are not clear not on. There’s no such thing as a stupid question.
  • Take your time to go through and read any literature provided.

“When buying a warranty policy, the important thing is not to be rushed and to consider your options,” says Simon England, managing director of ALA Insurance.

“There should be no pressure to purchase any product. Certainly at ALA, even if one of our team has been discussing and talking through a policy with a customer for an hour on the phone, there is still zero pressure. It’s important that customers can make an informed, unbiased decision that is right for them and their circumstances.”

Tom Johnston
Tom Johnstonhttp://johnstonmedia.com/
Tom Johnston was the first-ever reporter on national motoring magazine Auto Express. He went on to become that magazine’s News Editor and Assistant Editor, and has also been Motoring Correspondent for the Daily Star and contributor to the Daily and Sunday Express. Today, as a freelance writer, content creator and copy editor, Tom works with exciting and interesting websites and magazines on varied projects.