A car warranty is a type of insurance that covers certain components of your vehicle against mechanical fault or electrical failure. Also known as mechanical breakdown insurance (MBI), it is available for various time periods, ranging from a single month to several years.
Most one-year policies are renewable every 12 months – much like a regular car insurance product.
Car warranties vary a great deal, so it is crucial to read the terms and conditions of your particular policy before you take it out.
Most comprehensive warranties will cover the following components on your car:
- The engine
- Fuel and ignition systems
- Electric systems
- Cooling system
- Steering system
- Clutch and brake parts that are unaffected by friction
Warranty providers may also offer you other cover options, which may include:
General wear and tear
Wear and tear is not covered by all warranty products. If it is, you may be required to contribute to parts and/or labour.
This is when a covered part is damaged by the failure of a non-insured part. A comprehensive policy should allow for consequential loss – but be sure to read the small print carefully.
When taking out a warranty be sure you understand if the following issues:
Some policies will require you to make a contribution if a replacement part is significantly better than the part it is replacing.
Damage from oil leaks
A covered part may be damaged by an oil leak from a part that is not covered. Be aware that not all policies will include cover for this.
Most warranties will not include cover for wear and tear on certain parts of your car, including wheels, tyres, exhausts and frictional parts of brake and clutch. Other exclusions may include bodywork damage and catalytic converter failure. Your air conditioning system may also not be covered.
How to avoid warranty invalidation
Your warranty provider may not cover you if you do not strictly adhere to the policy requirements. These stipulations might include using unapproved garages for repairs; missing scheduled maintenance; and carrying out certain modifications.
The type of warranty you take out depends on if you are buying a new car, a used car, or if you want a warranty on a car you already own.
Most manufacturers will provide a warranty of three years, while some will provide cover of up to seven years.
There may be limits and stipulations to a manufacturer’s warranty. There may be a mileage limit, for example, and you may well be required to maintain your vehicle to a certain level. Any scheduled maintenance may need to be carried out at an approved garage – which in itself could well be more costly than using an independent garage.
You can tailor your warranty by opting for an after-market policy, although the age, brand and model of your vehicle will affect eligibility and premium cost.
For cars aged three or more years, a valid MOT will be required, along with a maintenance document from a VAT-registered garage proving your car has been serviced within the last 12 months.
Advantages of taking out a car warranty
- You will be covered against any unexpected repair bills
- You can tailor a policy to your needs by choosing an after-market product
Disadvantages of taking out a car warranty
- There will be limits to how much you can claim for, usually taking the car's total value as an upper limit
- It's a significant annual cost in addition to other running costs – but could save you money if you do suffer a mechanical or electrical fault
- It's easy to fall foul of exclusions and strict requirements such as regular servicing at approved garages (which as stated can be more expensive than independent garages)
Choosing the right car warranty for your needs
It's a good idea to spend some time shopping around before you settle on a warranty. Be sure to read the small print carefully to avoid any unwanted surprises. You may also find that buying a new warranty is less costly than renewing an existing one.