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Is a Used Car Warranty Worth It?

By: Scott McBride - Updated: 23 Nov 2010 | comments*Discuss
 
Is A Used Car Warranty Worth It?

It is an expensive business buying a used car. As well as paying for the car itself, a buyer may have invested in a car data check, professional inspection, breakdown cover, insurance, road tax and fuel. The last thing needed is a big repair bill.

It seems prices for car repairs following mechanical or electrical breakdown are ever increasing. It now costs over £1,000 per year in repair, breakdown and servicing costs for the average family car, according to the RAC.

Of course, those able to buy a new car get the peace of mind that a warranty gives. For a price, the same reassurance can be had by those buying a used car and it can make sense to invest in a warranty to manage repair costs and avoid unexpected bills.

Used Car Warranties

Used car warranties can be brought from dealers, but better value can often be had by dealing direct with one of a number of specialist warranty companies. Obviously it is worth shopping around to get a good deal, but bear in mind that the cheapest is not necessarily the best. Different warranties will offer different levels of cover, so it is just as important to ensure the level of cover is adequate as it is to pay a low price.

Many used car warranties will include replacement car hires, European cover and vehicle recovery following a breakdown, but policies will vary so it is vital to read the documentation carefully and be clear on just what is and what is not covered. The car owner will be expected to keep the car serviced at the intervals recommended by the manufacturer but the result can be comprehensive cover for costly parts.

Mechanical Failure

For those not sure if a used car warranty is a worthwhile purchase, consider analysis by one warranty specialist that claims 25 per cent of cars suffer some degree of mechanical failure during years four and five of ownership. This is normally soon after the manufacturer’s UK standard warranty expires.

Used car warranties are usually available for most makes of cars, although in general the car has to be under 10 years old and have covered fewer than 100,000 miles. The average cost of protection is a little over £200 per annum, but prices will vary considerably as there is a vast range of different warranties available.

Look for a warranty that covers mechanical and electrical parts, labour costs and wear and tear. There should be no limit on the number of claims and the claim limit should be up to the value of the car, with a low excess. Ideally, the policy should contribute to recovery, car hire and overnight accommodation should the worst happen.

Consequential Loss

It is rare to find a warranty that will include consequential loss, but it is worth hunting one down. If an uninsured part fails and damages or breaks an insured part, most warranty companies will refuse to settle a claim. However, if the policy includes consequential loss, the costs attributed to the replacement or repair of the insured part will be covered.

Large bills can fall into the consequential loss category. For instance, if an alternator belt comes off and tangles up in the timing belt, it can result in damaged valves and pistons in the engine. As the alternator belt is a service item, it will not be covered and unless the warranty covers consequential loss, the driver will be left with a massive bill.

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