Now you might ask what has a used car warranty (or extended warranty) got to do with car care. The key to this question however lies in the fact that when it comes down to our cars many of us will readily admit we concentrate more time and attention on the look of our motors than we do the mechanics.
It is however the mechanics of our cars that can give us the biggest headaches and dents in our wallets. This is where the used car warranty can form a vital part of your overall car care regime. This was recently brought home to us after Ali changed her much loved, but aging VW Golf Mk3 (she loved that car so much) for a newer model.
A painful £1000 lesson…
Now in the 15 years she had owned her Mk3 the most we had to pay out in anyone time was for a new exhaust, after the old one decided to stay on the drive one-day as she reversed off! The only other major issues in all that time were a drivers side electric window mechanism and a starter motor – not bad for 15 years motoring.
Having had so much joy out of here MK3 VW Golf, there was only one choice for her – yes you guessed it – another Golf, but this time a newer model. Not a new one but one with far fewer years on it.
Now I am not sure if previously we had just been very lucky or that the more modern the car the more can, and ultimately will go, wrong with it. But despite it having been looked over by an experienced mechanic before buying, things gradually started to go wrong and within a matter of weeks we found ourselves parting with close to another £1000 in parts and repairs.
The benefit of hindsight…
Some of the problems included a major issue with the cooling system after over-heating at the top of a Welsh mountain and similar to the old Golf the electric window mechanisms.
Unfortunately as it had been a private sale there was no recourse back top the seller. However what would have helped enormously is if we had taken out a used car warranty as soon as we purchased the car. As the saying goes – hindsight is a wonderful thing.
So having been through the pain of this experience I decided to do some research and in this article I take a closer look at what such a used or extended warranty would normally cover, together with 5 top tips on choosing the right one for you.
To begin with lets look at:
What does a used car warranty cover?
When it comes to choosing a used car warranty there are a number of suppliers and differing levels of cover available (a list of the key ones can be found at the end of this article). Depending on the provider and level of cover you opt for warranty cover is available for various parts of your car from just the engine to more comprehensive policies which also include parts such as:
- Gearbox (manual & automatic)
- Differential & Propshaft
- Wheel Bearings
- Fuel & Cooling Systems
- Steering & Brakes
- Electrical & Engine Management Systems
How much can I claim on a used car warranty?
On average the claim limits also tend to vary from as low as £3000 up to £7000 per claim. However some will only cover you for a maximum of the “value of your car”. So if you have an 8 year old Ford Focus 1.8 FFV LX which you purchased for £1000 via Autotrader you could potentially only claim up to the £1k per claim, even if the repair would cost you £2k.
Although some policies have the cars value as the basis of the amount of cover per claim some will maintain this level of cover even if your car subsequently reduces in value over time. As the majority of cars do.
Age and mileage of your car
Again this tends to vary from supplier to supplier, with ages of vehicles covered from a maximum of 4 to 12 years and mileages up to 150,000.
Will I have to contribute to the repairs?
A used car warranty is essential an insurance cover against anything going mechanically wrong with your car. As is the case with most insurance policies may extended warranty covers will be subject to an excess.
On average many of the warranties available will carry an excess of £50. A few providers do not automatically apply a compulsory an excess, although almost all will allow you to choose an excess in exchange for a reduction in the cost of your cover.
What a used car warranty does NOT cover…
Although this will vary for each provider there are a few common threads running through the polices that are generally available on the open market. These include:
- Parts which have failed due to incorrect servicing, oil or coolant leak, negligence, neglect or misuse
- Items fitted to your car after the date of manufacture i.e towing equipment etc
- Parts which has been modified and are not to the manufacturer’s original specification
- Vehicles without a current valid MOT certificate
- Bodywork and trim such as seat belts, windscreen & window glass, sunroof, fuel tanks, wheels, tyres and airbags
- Leads, plugs, filters, blades, lights, bulbs, belts, looms and spark plugs
- Exhaust systems
- Worn or leaking seals and cylinders
This is not an exhaustive list but hopefully gives you a flavour of the type of things that would be excluded under a used car warranty. Again you would need to check with your supplier as to exactly what they do and do not cover in their policy.
Some Facts & Figures
According to figures released last October (2013) by the RAC, the top 10 claims made during the previous 12 months were all fairly expensive items to replace and with the top 4 items all being electrical:
4. Starter motor
5. Water pump
6. Lambda sensor
8. Exhaust gas re-circulation valve
9. Window motor
10. Cylinder head gasket
Interestingly their research also identified almost 7 out of 10 of their used car warranty claims were made in the first six months of cover, while nearly 4 out of 10 were made within the first three months.
In other research conducted last year, Warranty Direct, one of the UKs leading used car warranty providers believes that each year 43 % of cars between four and nine years old will break down with an average repair cost of around £376.
However based on a survey by Which? of 57,000 car owners there is a considerable difference in the cost of repairs between cars at the luxury end of the market compared with those at the cheaper end.
Examples cited included owners of Land Rover Discovery 3’s aged over 3 years spend an average of £478 on a repair compared to the owner of a Kia Picanto, whose average repair bill is a startlingly modest £13. A difference 37 times less than the Land Rover owner.
5 Tips For Choosing A Used Car Warranty
If you are considering buying a used car or extended warranty for your vehicle here, after all the research I have done, are my top 5 tips on things to look-out for or consider when choosing your provider:
1. Do some research on your car
Most cars of the same make and model will tend to suffer from the same types of faults at various times in their life-cycle. Use resources such as Parkers and the forums relating to your car to find out what type of faults are more common and how much they usually cost. This will give you some indication as to how much you are likely to end up needed to spend at some time in the future.
This way you can decide what level of cover you are likely to need when choosing your used car warranty.
2. Print or download a copy of the policy before buying
Most warranty providers will enable you to download or view and print a copy of the wording before you buy. Ensure you do this to make sure you will have the cover for the parts or failures you are most concerned about.
Also check out their requirements on servicing or annual mileage as well as start date. Some providers will provide cover from day 1 whereas others may have a 30 day or 1000 mile restriction before cover will start.
Also check what their terms are for failure due to “wear and tear”. Again some will have this as an exclusion whereas others will not. And as I mention further up in the article just do a quick check on what, if any, the compulsory excess is and decide if you can afford a voluntary excess.
Also check what their policy is on “Betterment”. This is insurance industry jargon for you ending up in a “better” position after the repair i.e increasing the value of your car. Where possible choose a policy that does not contain this clause as if it does and you find your repair subject to “betterment” you are likely to have to make a contribution towards the cost the repair.
3. Check the warranty providers status and service
Ensure that the warranty seller and if relevant their underwriters are full Financial Services Authority (FSA) registered and regulated.
Also ensure they publish details of their claims procedure and service times and expectations either in their paperwork or on their website and make sure you are happy with them. i.e do they provide 24/7 claims reporting, are they contactable at weekends etc.
4. Consider the value of any extras
Some policies will come with a number of “extra features” added on i.e cover whilst travelling in europe, vehicle recovery etc. Now if you do not need these consider if you are paying extra for them within the cost of the policy or look to see if any savings can be made to specifically exclude such added features.
5. Shop around and get a number of quotes
Above all shop around and get a number of quotes as well as full terms and conditions and compare each one based on your own needs and using all or some of the tips mentioned above.
As a starting point I have created a useful list of some of the leading UK providers of used car warranty products which you can used to take a look at their websites and obtain a quote.
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