Beginners’ guide to warranties for new and used cars

Car warranty is insurance that covers the cost of parts and labour after a mechanical or electrical failure of a covered part. Car warranties last for as little as one month to five years, but you can take out a 12-month policy which renews each year.

Find out more about car warranties, from what they cover to what the alternatives are.

What does car warranty cover?

A car warranty protects against the cost of parts and labour should you car suffer a mechanical or electric failure, but exactly what car warranties cover can be more complicated. 

All car warranties differ, with some protecting things that other policies ignore. Before you buy a car warranty policy, it's important to check what's covered in the small print. 

Most comprehensive policies include the following: 

• The engine
• Fuel and ignition systems
• Electric
• Gearbox
• Steering
• Suspension 
• ABS Braking system
• Suspension
• Clutch
• Ignition system
• Cooling system

What does ‘betterment’ mean?

Some policies come with ‘betterment’ a clause, which means that if a new part is fitted to your vehicle you may be expected to pay towards part of the cost. 

How to keep a car warranty valid

Car warranty relies on you to make sure your car is well maintained; if you don’t keep your car in good working order, then your policy may be found to be invalid in the event you need to claim.

Some policies will stipulate that you have your car serviced regularly, and they won’t cover things that need to be regularly replaced such as windscreen wipers and tyres.

If you miss an MOT or service, your car warranty won’t be valid.

Should you buy a car warranty policy?

Many new cars come with a warranty provided by the manufacturer, but if your warranty has run out then you may want to look into buying an optional car warranty.

Similarly, if you’re buying a used car then a car warranty could give you the peace of mind you need to know that your new-to-you car is covered in the event of a mechanical or electrical breakdown.

Before you buy a car warranty, think about how much you usually spend on repairs and balance that against the cost of a car warranty – if the former is less than the latter, you may not need car warranty.

The pros and cons of car warranty

Buying a car warranty policy can offer a number of advantages and disadvantages. 

Advantages

Specific cover

A lot of car warranty policies are tailored to your needs, so you can be protected for the things that are most likely to go wrong with your car.

Breakdown recovery

If you don’t have breakdown cover, a lot of car warranties come with this. However, check that it’s as comprehensive as you need – for example, the recovery may not be included and things like home start and national cover probably won’t come as standard. 

Savings

While the cost of a car warranty may seem prohibitive, work out whether you would make savings based on how much repairs would cost otherwise.

Disadvantages

There are a number of reasons you might want to skip a car warranty policy.

Claim limits

Before you take out car warranty cover, make sure you check the claims limits that are enforced on the policy. This will determine the amount of money you can be covered for, and may applied to individual repair costs, to the overall cost or both.

Exclusions

Every car warranty policy is different, and some exclude things that others include.  Make sure you check the things that are excluded on your policy before buying.

Another cost

The cost of running a car mounts up quickly; insurance, MOT, services, petrol, etc and adding car warranty to that may be the last thing you need. Before you take out a car warranty 

Alternatives to a car warranty

If you’re unsure about car warranty, there are other types of cover available that could protect your pocket if your car needs to be repaired.

Manufacturers’ warranty

If you buy a new car, most come with a manufacturer’s warranty, usually for around three years. Some however go up to seven years.

As with other car warranty products, the level of cover offered by a manufacturer’s warranty will vary so check that you’re happy with the level of cover you receive.

Many used car dealerships also offer a manufacturer-backed warranty, as before they are sold they go back to the manufacturer to be inspected.

Independent dealer/used car warranty

If you buy a second-hand car from a dealer, a warranty may be part of the package or you may be offered one at an additional cost.

Dealer cover may be sufficient, but don’t feel pressured to take out a warranty if you’re unsure of what it covers or that it’s right for you. Go home and do some research first, before taking out any warranty you’re offered.

After-market warranty

If you’re buying a used car that is out of warranty, you can take out an extended or ‘after-market’ warranty.  As with other warranties, the level of cover offered under these policies varies and you should check with the provider what their protection covers.

Breakdown cover

An obvious alternative to a car warranty is breakdown cover, which in some cases can cover the cost of repairing parts after a breakdown.

Breakdown cover comes with its own caveats, and you won’t be protected if you don’t breakdown or if you breakdown at home and you don’t have home-start cover. 

Unlike some car warranties, our Platinum cover includes failure due to general wear and tear. This however excludes brakes and clutches, which are designed to degrade over time in order to function.

Gold covers a large list of specific items. Silver covers all major parts and items covered by Gold, but only in the event your car is recovered to a garage by a recognised breakdown service.

However, if you have a car warranty and your car breaks down, it doesn’t necessarily mean you’re covered. Each car warranty varies as to what it covers, what it excludes and the circumstances when you’re protected.