Among the litany of things to consider when buying a new car, your warranty just might be the deciding factor.
The Australian Competition and Consumer Commission (ACCC) defines manufacturer warranties as “voluntary promises made by the manufacturer about what it will do if something goes wrong with a new car.”
“Manufacturer’s warranties are for a fixed period of time and may be in addition to automatic consumer rights under Australian Consumer Law warranties,” the ACCC explains.
“Manufacturer’s warranties come with terms that limit coverage and what consumers can claim.”
NOTE: This story was first published on April 19, 2020.
But while the basic principle may be the same across the board, the appearance of a warranty can vary widely from brand to brand.
Typically, manufacturers’ warranties can range from three years or 100,000 kilometers of coverage (whichever comes first), up to seven years or unlimited kilometers.
Luxury brands tend to have shorter warranty periods, but Mercedes-Benz’s shift to a three- to five-year warranty period has seen its peers follow suit. Indeed, two days before this story was filed, Volvo did.
But, when it comes to warranties, there’s no denying that a little research may be required in order to confirm that you’re getting the best deal possible.
According to the 2016 Lemon car report According to consumer advocacy publisher Choice, 66% of new car buyers experience problems with their new cars within the first five years of their ownership – with 14% of new car buyers facing what they see as a major problem.
So how long is long enough? And what types of things are covered?
For advice, we turned to Graham Cooke, Insights Manager at financial comparison site Finder.com.au, for his take on some frequently asked questions.
What is the minimum warranty period I should look for?
“Under consumer law, that’s as long as you expect the product to last and you expect a car to run for 3-4 years without any major issues,” Mr. Cooke.
Australian Consumer Law applies to vehicle purchases just like any other good or service. In addition to the manufacturer’s warranty, your vehicle must “be of acceptable quality (including that it is safe, durable and free from defects)”, this protection extends “for an unspecified but reasonable period of time”.
Like your new car warranty, ACL protection does not cover normal wear and tear, user damage, neglect, or scheduled replacement items. Making a claim may take time and effort on your behalf, but ACCC can advise you if you think you have an out-of-warranty claim.
What kinds of things should my car warranty cover?
Warranties generally cover any mechanical failure resulting from faulty or defective design or parts. Roadside assistance, towing costs, or a car loan may also be covered if your car breaks down due to a warranty issue.
However, Mr Cooke says the key is to check if there are any “payment limits” set in the guarantee.
“There will be maximum payouts covered on things that can go wrong,” he says – adding that it’s always advisable to check the fine print. If towing or accommodation is part of a warranty offer, there may be a cap on distance or a price cap for accommodation.
What does my car warranty not cover?
“Anything related to human error will not be covered, wear and tear will not be covered, and the coverage may disappear if you drive a certain distance,” says Cooke, urging consumers to clarify those details with their manufacturer before committing to a car.
Mr. Cooke says that some issues outside of the specified warranty coverage terms might instead be covered by insurance, depending on the nature of the issue and the terms of your warranty policy.
Can I void my warranty by skipping a scheduled maintenance?
Mr. Cooke says that in some cases skipping scheduled maintenance could call your warranty into question.
“In some cases this can be true. You have to exercise a minimum level of caution – you can just ask the dealer, most dealers will be happy to let you know of the repercussions, ”he says.
Are used cars also guaranteed?
According to Cooke, a longer warranty is “definitely something you sacrifice for the lower price of used cars.”
“They will generally have shorter dealer warranties than new cars. Often times, they will come with the dealer’s warranty, not the manufacturer’s warranty.”
When buying a used car from a dealership that is outside its manufacturer’s warranty period, you benefit from a legal warranty.
Typically, a statutory warranty is a three month or 5,000 km (whichever occurs first) warranty available if a car is less than 10 years old and has not driven more than 120,000 to 160,000 km.
The period and criteria of the legal warranty vary from state to state, so contact the consumer organization in your state for more detailed information.
Are warranty extensions worth it?
“You have to pay attention to the details to find out,” says Cooke.
“A lot of new cars come with fairly long manufacturer warranties, so if you’re looking for an extended warranty, it should extend to the period when the car is more likely to break down.”
If you go for a manufacturer’s warranty, Mr Cooke says, “Be careful that if it’s a warranty offered by the dealer, it’s often not as good as the manufacturer or a third party because dealers are encouraged to sell them. It’s the same with car loans. “
Extended warranties, unlike new car warranties, are often structured like an insurance policy. Certain terms and conditions regarding the use and maintenance of the vehicle may need to be followed, there may be exclusions, claim limits may apply and a deductible may be payable. Careful consideration of the terms and conditions is essential.
Are warranty extensions transferable?
Be aware that extended warranties, unlike manufacturer warranties, are generally not transferable when it comes time to sell your car.
“Typically, if you sell your car while it is still under the manufacturer’s warranty, the remaining warranty period is automatically transferred to the new owner (unless the warranty provides otherwise),” says Consumer Affairs Victoria.
“However, an extended warranty does not normally pass to the new owner. In such cases, you may be able to void the extended warranty and get a refund for any coverage you had left. You may have to pay a fee. early cancellation, but this should be limited to a reasonable amount.
Again, arm yourself with information before signing up. If you don’t intend to keep a vehicle longer than the length of the extended warranty, a shorter policy may be a more cost-effective option.
What if I have a problem outside of my warranty period?
Cooke says establishing a relationship with a service center or manufacturer could help in this case.
“This is where building that relationship with a dealership or brand really helps,” he explains, adding that under these circumstances some dealers or manufacturers will be willing to extend the warranty as a token of good grace.
If you have a warranty issue outside of your warranty period, you still have protection under Australian Consumer Law.
What does each manufacturer offer?
Below is a breakdown of each manufacturer’s standard warranty for new and private cars. Please note that some of these warranties may differ due to limited time offers on certain models.
Alfa Romeo: 3 years / 150,000 km
Alpine: 3 years / unlimited km the first 2 years, limited to 100,000 km the third year.
Aston Martin: 3 years / unlimited km
Audi: 3 years / unlimited km
Bentley: 3 years / unlimited km
BMW: 3 years / unlimited km
Citroën: 5 years / unlimited km
Chrysler: 3 years / 100,000 km
Ferrari: 3 years / unlimited km
Ford: 5 years / unlimited km
Genesis: 5 years / unlimited km
Great Wall : 5 years / 150,000 km
Haval: 7 years / unlimited km
Honda: 5 years / unlimited km
Hyundai: 5 years / unlimited km
Infinite : 4 years / 100.00km
Jaguar: 3 years / 100,000 km
Lamborghini: 3 years / unlimited km
Land Rover: 3 years / 100,000 km
Lotus: 3 years / unlimited km
Mahindra: 3 years / 100,000 km
Maserati: 3 years / unlimited km
Mazda: 5 years / unlimited km
McLaren: 3 years / unlimited km
Mercedes-Benz: 5 years / unlimited km
Mitsubishi: 5 years / 100,000 km as standard, or 10 years / 200,000 km in the event of exclusive maintenance within the Mitsubishi dealer network.
Nissan: 5 years / unlimited km
Peugeot: 5 years / unlimited km
Porsche: 3 years / unlimited km
Rolls Royce : 4 years / unlimited km
Renault: 5 year / 200,000 km warranty for the commercial van range, including the new Kangoo, Trafic and Master; 3 years / unlimited km warranty for Kangoo ZE (5 years / 100,000 km warranty for battery / powertrain); 5 year / unlimited km warranty for new Koleos, Mégane RS and Kadjar; 7 years / unlimited km for Koleos
Skoda: 5 years / unlimited km
SsangYong: 7 years / unlimited km
Subaru: 5 years / unlimited km
Suzuki: 5 years / unlimited km
You’re here : 4 years / 80,000 km (battery and drive unit warranty varies by model – more info here)
Toyota: 5 years / unlimited km
Volkswagen: 5 years / unlimited km
Volvo: 5 years / unlimited km on vehicles sold on April 1, 2020 or after
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