What does a Warranty cover?

There are 4 main warranty options:

• An Extension of the manufacturers new car warranty
• A used car warranty, bought at the time you purchase the car from a dealership
• A warranty that is an Insurance Product.
• A warranty that is a Contract Warranty.

Many insurance companies have warranty products and many different versions to cover most vehicles.There are also a number of specialist warranty companies that just look after warranty cover, and have close ties to car dealerships in Australia.

You will also need to check what is covered with each warranty product offered to you so you know what components are covered, and if there will be the liklihood of any out of pocket expences, should a covered component suffer a failure.

A warranty does not cover cosmetic items such as trims or paint work, nor does it cover any item that requires replacement as part of normal vehicle maintenance such as spark plugs, filters, tyres, globes, break pads, batteries etc.

Benefits of a Manufacturers Warranty

A manufacturers warranty offers the best level of cover, and many offer more than 4 years cover, in an attempt to show consumers how confident they are of the vehicles reliability.

An Extended Manufacturers Warranty offered by a warranty provider, is the next best level of cover, many covering the same components that the manufacturers waranty covers.

These warranty policies also generally supply a list of covered components, so you know exactly what is covered in the event of a claim.

Benefits of a Used Car Warranty

Used cars start to become less reliable, and over the years with a higher number of kilometres travelled, you can start to expect to see some mechanical problems appearing.

It is therefore sensible to have some level of protection from mechanical failure, and a used car warranty does that.

In this market there are 2 options:

• A warranty that is an Insurance Product.
• A warranty that is a Contract Warranty.

A Warranty that is an insurance product will cover a list of included components, and will repair or replace them in the event of a mechanical failure.

A Contract Warranty, sometimes called a Discretionary Warranty, covers a list of covered components to a dollar limit. The warranty provider will pay out at its sole discretion, meaning they may or may not pay the claim.

Used Car Warranty products will have limits on the vehicles age and kilometres travelled, and as the vehicle gets older, the coverage will become less comprehensive, and the premium will be relatively higher.