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Extend your manufacturer’s vehicle warranty
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What is car warranty and what does it cover?
Its all Insurance
February 17, 2023 By Budget Insurance
Insurance terminology can often seem as if it was designed to be as confusing as possible. You can also feel that some insurers push you to commit to a product before you know what half these terms mean. This approach doesn't help anyone and will only result in confusion and irritation later on.
Budget Insurance offers a range of car insurance products, including an extended vehicle warranty and a standard motor warranty. If you have a car you want to insure and have ever asked yourself, “What is car warranty insurance?” or “What does car warranty coverage include?” keep reading to familiarise yourself with the different types of coverage you can include in your vehicle insurance portfolio.
What is car warranty for pre-owned cars, and what does it cover?
Coverage offered by a car warranty can differ from insurer to insurer. If you are wondering what is covered under car warranty insurance for used vehicles, it's always a good idea to find out how your insurance provider of choice defines different forms of vehicle warranty coverage.
When you buy a new car off the dealership parking lot, you'll be driving off with a complete warranty on a predefined list of parts. These parts are usually determined by the manufacturer and require you to undertake any replacement or repair work using original manufacturer parts at an authorised dealership.
If you buy a pre-owned car, its warranty could be partially or completely expired. Many people completely forget about this when they buy a pre-owned car, especially if the car is in impeccable condition and has no history of major repairs or replacements. It means that should something — anything — break down, they could find themselves at the receiving end of a hefty bill and no means to get around until they pay it.
This is where an extended car warranty comes in. In exchange for a monthly fee, it offers an extended warranty on a vehicle. The exact coverage your car will receive will depend on its age, condition, make, model and mileage.
What is an extended car warranty and what does it cover?
If you're asking yourself, “What does an extended warranty cover on a car?” it helps to understand the core difference between this product and the one listed above. The short answer is that an extended car warranty is a product you can choose that automatically kicks in once your vehicle's existing warranty runs out.
Like a pre-owned car warranty, the exact coverage you enjoy will depend on the make and model of your car, as well as how many kilometres are on the clock. However, a major difference between pre-owned and extended coverage is that extended coverage has much higher cover limits — with some components having no cover limit at all.
What don't extended or pre-owned car warranties cover?
To get the most value from either warranty product, you'll need to know exactly what each type of warranty includes and excludes. You'll find that, in many ways, it's similar to renting a house.
When you enter into a rental agreement and take occupancy of a flat, you expect it to be in the same condition as you saw it when you decided to choose it. From this point forward, you and the property owner will have certain responsibilities. The property owner will expect you not to make any major alterations to the property and to clean it regularly. They will also expect you to take reasonable steps to keep it in good condition. You will also be expected to make reasonable replacements, such as inserting new light bulbs when the old ones no longer work.
Say, for example, you constantly flush inappropriate goods down the toilet and rarely try to clean or clear it. One day, the plumbing packs up, and the pipes need replacement. The plumber determines that you caused it through improper maintenance. In this case, the property owner would be unlikely to pay for this repair. However, if you've ensured that you only flushed acceptable waste and the plumber determines that the damage has been caused by a hidden tree root, the financial responsibility for the repairs will fall on the owner.
Car warranties operate on similar principles. You'll be expected to repair and replace items that wear out quickly or often, like your tyres and rims. You'll also be expected to keep your vehicle in reasonably good condition by parking it in a cool, dry space and paying immediate attention to any issue that arises.
Your warranty won't cover any alterations you have made to the vehicle. It will not cover you for vandalism-related issues, normal wear and tear or accident damage and repair. Your primary car insurance can cover these, which is why it's best to think of warranty coverage as a helpful extra and not as your primary form of protection.
What is the difference between a motor warranty and a car service plan?
Broadly speaking, a car warranty is specifically for mechanical breakdown claims, while a service plan covers the replacement of certain service parts, such as sparkplugs, fuel and oil filters, and sometimes cambelts.
If you've purchased a new car or a relatively new pre-owned one, you will know that most car manufacturers give their cars a warranty and a service plan that become void after a certain number of years or kilometres driven.
The benefits of an extended warranty have been discussed above, so we’ll concentrate on service plans here. As service plans can range between one and five years, your new or pre-owned car could still be within its service plan. You can complement this by including a car service plan to cover your vehicle when its existing one runs out.
An extended car service plan will take place at predetermined intervals and give your car a thorough once over, covering minor repairs and replacements as required or notifying you of larger issues that need attention. It's invaluable, as it allows you to prevent major issues from developing or to detect them before they become very costly to fix. It also means that if you sell your car in the future, you'll be able to show the prospective owner that you have looked after it as intended.
Get a car warranty cover from Budget Insurance
Keeping your car in great condition involves more than paying for the mandatory comprehensive insurance you had to take out when you financed your vehicle. To extend its lifespan and prevent unexpected costs from wrecking your finances, it's worth your while to investigate a warranty and a service plan that suits your budget. If you still have questions, contact us today for helpful advice and a no-obligation quote.
The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.
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