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How an Extended Vehicle Warranty Works & Why You Need It

Its all Insurance February 19, 2025 By Budget Insurance

You're ready to purchase a car and ride into the sunset with it. As it's fresh off the showroom floor, you're confident that your new ride won't be accompanied by a list of age-related issues to watch out for. Most cars start this way, and while it's great to have some reassurance that your car is likely to be free from problems when it’s new, it's no guarantee that issues won't develop later. The best way to ensure your vehicle continues to provide you with its best possible performance as time passes is to invest in an Extended Car Warranty from Budget Insurance. Here's how it works and why you'll need it.

 

5 top out-of-warranty risks and their solutions

 

When buying a car with an inclusive car warranty, it's common to put concerns about repairs and breakdowns out of your mind until you need it. You might also assume that the various parts of your car are unlikely to stop working immediately after the car warranty expires, so you can simply keep it serviced on schedule at an authorised dealer and put off these major repairs and replacements for as long as possible — or make use of your Comprehensive Insurance to cover it.

In reality, how your car ages and when or how a part breaks down will depend on many factors, some of which are beyond your control. Even with the best quality maintenance and conscientious driving, you could find yourself facing a newly expired car warranty — and the following risks:

 

1. Major component repair and replacement costs

 

We’re all aware that we need to account for the replacement of car parts like brake pads or windshield wipers, which tend to break down over time and require replacement. We tend to forget that there are bigger and more complex parts underneath the bonnet of our cars which might stop working without warning. This can include your engine, converters or transmission. The cost of repairing or replacing these critical parts out of vehicle warranty can be eye-watering and, in many cases, run into the thousands of rands. Unlike a cracked passenger seat window or malfunctioning air conditioning system, the car won't be able to function at all (or it would be unsafe to drive) until the necessary repair or replacement is undertaken.

 

2. Electronic component failures

 

Vehicles today are highly complex and have electronic systems operating and coordinating many functions, including safety features. A failure of the electronic system in your car can cost thousands to repair – and it’s even worse if your car is an imported model! An extended vehicle warranty will often cover malfunctions in electronic systems.

 

3. Electric car repair and replacement costs

 

Once reserved for the high earners and environmentally conscious drivers, electric cars are more commonplace than they've ever been on the local car market. Research shows that sales of fully electric, plug-in hybrid and traditional hybrid vehicles are on the increase in South Africa. These vehicles can offer more sophistication in terms of performance but are correspondingly more complex and can require specialised parts and labour for repairs and replacements. Some parts (such as battery inverters or charging ports) might even need to be imported, depending on the make or model of the car. 

 

4. External factors beyond your control

 

External factors can create situations where your car may sustain damage through no fault of your own or result in you facing unexpectedly higher costs than you budgeted for.

One common example of an external fault that can impact your vehicle is potholes. The reality is that South African roads are poorly maintained and often unsafe. Constantly driving over potholes or unpaved roads can cause premature damage to your car's suspension, tyres, rims and wheel alignment. Extended Car Warranty can often cover this premature damage.

Another factor that can increase your costs is inflation. Global politics and other major events all impact inflation, and even if you've budgeted for the price of a certain repair or replacement, South Africa’s rising inflation can dramatically disrupt this without warning. In many cases, an Extended Car Warranty lets you lock in prices and avoid surprises.

 

5. Other concerns

 

An Extended Car Warranty can often solve issues unrelated to your car's parts, making your life easier.

One example of this is choosing a service provider that offers benefits on top of their warranty coverage. Budget Insurance, for example, offers drivers access to roadside assistance in case of a breakdown. Even if the issue isn't car warranty-related, this service can still locate you and help you with towing and repairs in an emergency breakdown.

Another incidental benefit of making use of an Extended Service Warranty is being able to keep your car in superior condition and have proof of this through records. Extended warranties can help ensure repairs are addressed promptly and professionally, helping maintain a reliable maintenance record, which is attractive to potential buyers. Extended warranties thus help maintain the car in good condition, ensuring it retains more value and reliability in the resale market.

 

Get a Budget Insurance quote

 

Peace of mind can be hard to come by as a consumer, and when it comes to a major investment purchase such as a car, it isn't something you want to take chances with. Whether you're planning on buying a new vehicle or a used one with some of its remaining car warranty, Budget Insurance is here to help you ensure that the warranty is extended for as long as you need it. Contact us for a Budget Insurance quote today.

 

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