Extended car warranty: is it worth it?
Is it worth taking out an extended car warranty? See our full guide and prices
In an ideal world, every used car listed for sale would be immaculately maintained, perfectly clean and fit to drive for many years to come. Unfortunately, however, we've all heard the stories of used car purchases gone wrong and there’s no guarantee of how long used cars will continue driving for. An extended car warranty is a protection plan designed to keep used cars operating at their best.
If you've already bought a used car, there are warranty options to ensure your vehicle investment doesn't turn sour. Extended warranties are available The best extended warranty packages will cover any problems with your car's mechanicals and electronics, as well as additional features like air-conditioning and airbags. Comprehensive packages also cover the cost of labour, which can help you save hundreds of pounds in the case of a problem.
All new cars include a warranty, so if you're buying a used car that's only two or three years old, there may still be several years of that initial warranty left on the car. Most manufacturers provide cover for three years, while some offer a five-year or even a seven-year period of protection. It's worth checking whether the car has any remaining cover before you start looking into an extended car warranty.
Is an extended used car warranty worth it?
Like most insurance policies, an extended warranty is something you pay for in the hope that you’ll never need to use it. For many owners, it’s worth paying the price for peace of mind; even if your car is built by a brand renowned for its reliability, there's always a risk that something could go wrong. And if things do go wrong, then a single claim could be worth more than the entire premium.
Honda is rated as the most dependable manufacturer by Warrantywise, but on the odd occasion that something goes wrong, the company says that the average repair cost is £538. Other brands rated highly for their reliability include Toyota, with an average repair cost of £596 and Suzuki at £580.
These prices are generally higher for more upmarket brands: Mercedes is rated by Warrantywise as having average reliability, with a £751 average repair cost, while Audi has a similar reliability score and a £620 average repair cost.
Considering you can get yourself a used-car warranty with BuyaCar for £299 per year, it doesn't take much to see how much money you could save if the worst were to happen.
What does an extended used car warranty cover?
The best policies will pay for repair or replacement to all mechanical and electrical components that suddenly and unexpectedly fail. This includes the most expensive parts, such as the engine, gearbox, suspension and the car’s computer (known as the ECU).
Other parts such as the air-conditioning system, dashboard screens and airbags are also partly covered by the most comprehensive warranties, which is useful as these components can be expensive to repair. Ideally, these parts will be repaired or replaced at full cost to the warranty provider - apart from any excess that’s agreed at the start of the policy.
Some companies apply betterment to the warranty, meaning you may be required to pay a proportion of the cost in situations where a new part is thought to improve your car’s condition or value.
Parts excluded from extended warranties
Several parts are not normally covered, including frequently damaged items such as windscreens, wheels, tyres and the car’s bodywork: your warranty won’t cover you if someone scrapes your door in a car park, for example.
Worn out components aren’t covered either: extended warranties aren’t designed to cover old and well-used parts, which have come to the end of their working lives. This includes parts such as gearboxes, clutches and braking components, which are generally covered if they fail in other circumstances.
The expensive batteries in hybrid and electric cars may not be covered by an extended warranty either. Manufacturer battery cover is usually extensive, lasting for five or more years, but if this has expired, then you may require a specialist policy - potentially from the manufacturer.
You’ll need to ensure that your car is serviced on time and that you report issues, such as strange noises or dashboard warning lights, immediately or the warranty company may refuse to pay out.
How do you claim on an extended car warranty?
Warranty companies typically have an emergency phone line to report problems or breakdowns and there’s normally an out of hours service.
Call centre staff should arrange for your car to be repaired or recovered at the roadside, if needed, and will also be able to advise on the company’s car hire and hotel expenses policies.
Repairs or inspections need to be agreed in advance. Your warranty company will usually pay for these directly if they are carried out by a repair firm that’s approved by them.
You may have the option of choosing your own repair company. If this is the case, then you’re likely to have to pay for the work yourself and then claim it back later - but you’ll still need to get it authorised first.
Extended car warranty: age limits
As vehicles get older and increasing numbers of components wear out, it gets more difficult and more expensive to take out warranty cover.
In many cases, policies will also offer less protection. For example, Warrantywise will only offer protection against sudden and unexpected failure due to wear and tear on vehicles that are less than ten years old, and with under 100,000 miles on the clock.
Once your car has reached 15 years old, or has covered 150,000 miles, then it no longer offers any warranty protection.