Drivers are keeping their cars longer than ever, due mainly to the economic downturn but also because cars are far more reliable than they ever have been. If a modern car is regularly serviced and well maintained there is no reason why it shouldn’t last a long time and although modern day technology and gadgetry is evolving quickly most cars these days will now have essentially comfortable features as standard, such as power steering, CD player, electric windows and maybe even a/c. Whilst deciding to keep a car which may fall out of the initial manufacturer’s warranty, which is usually 3 yrs but some give more, it is important for peace of mind to have a warranty policy which covers potentially expensive items which could conceivably cost you more than the value of the car! So what warranty should you go for and how much should you pay for the level of cover you require? These are the $64,000 questions asked everyday and customers, and bizarrely some sales people or service advisors who sell these products, are still unsure what is covered themselves. Although great strides have been made to ensure that policies are less ambiguous it is still hard for some drivers to make an informed choice as they may have absolutely no knowledge of how a car works and are therefore in the hands of the experts to lead them in the right direction.
Generally of course most customers, when asked what kind of level of warranty they want, will opt for the cheapest whilst still expecting it to cover everything and if a policy is not explained correctly and a customer brings the car in to make a claim, they cannot understand why it may not be covered. How many times have you taken your car in with a problem to be told that your warranty does not cover this part or that component? This inevitably leaves you with the feeling that it’s not worth the paper it is written on when in reality you may not have the level of cover you require for the age model and driving conditions for which the car is used for. For instance there is no point having a maximum claim limit of £500 on a large 4wd which, when anything serious goes wrong, could cost many times that. Also if a customer has a car which is worth less than £5,000 and may not have air con and electric packs or other potentially expensive repair items they may not need top of the range cover whereas more expensive cars with more sophisticated systems electrical problems are more likely than mechanical ones and therefore the cover and cost and claim rate must reflect that need.
Unfortunately from a customer’s point of view it is still hit and miss as to what warranty you end up with because the selling of warranty policies depends on the knowledge and experience of the person selling it. One thing is for sure, if a warranty is being upgraded to cover the potential time a customer will have a car or that their budget can stretch to, it is well worth ensuring that before you buy such a policy you are happy the person selling it knows what they are talking about. Ask questions which are important to you, how many claims can I make? What is and isn’t covered and can I have an overview in writing? Is it parts and labour? Is there any excess to pay? Does it come with breakdown cover?
Remember cars will always go wrong otherwise manufactures wouldn’t need to give 3 year warranties on brand new cars and with the ever increasing sophistication of modern cars it is important that when covering the cost of potential component defects that you know what your exposure could be.
For greater piece of mind it is probably better to have a respected name to back up a warranty product but bear in mind that products in the name of the RAC or the AA are more likely to be actually operated by a third party so it will pay to read the key facts to see who is actually underwriting and managing the policy. Whatever the case it is likely these products will offer some recourse and hopefully a clearer understanding of what is involved, but as with many ‘distress’ sold products it is always worth reading the small print to understand every aspect of a policy and, more importantly, its limitations before buying it.
The key thing is to try and balance the exposure to the cost of repair against the likely risk of failure and the cost of the warranty premium. Why have a £5,000 claim limit if the average cost of repairs is £600? This is particularly the case if the premium itself costs around the £400 mark. It’s probably better to look for a warranty that enables you to choose the claim value yourself, rather like insurance excess in reverse.
As always do your homework, shop around and get the best deal you can.
