Should I buy an extended warranty for my new car? 

Mouthy Money Your Questions Answered panelist, Iain Reid, answers a reader’s question on whether extended warranties are worth buying with new cars. 

Q I’ve just bought a brand new car and the dealer asked if I also wanted an extended warranty. Should I get one? 

A When you’re changing cars – whether you’re going for a new or used model – a warranty offers peace of mind, which is hard to put a price on.

However, when it comes to paying for an extended warranty, there are a few things to consider before deciding whether it’s worth making the investment. 

For most people you don’t need an extended warranty if you have a valid manufacturer’s warranty. It’s widely known that all new cars sold in the UK come with a manufacturer warranty, provided by the company that built your car.

This provides protection against having to pay for the cost of repairing or replacing faulty components for a certain number of years, and/or a certain number of miles. 

The industry standard manufacturer’s warranty lasts for three years or 60,000 miles, but some car makers offer longer guarantees – Kia, for example, offers up to seven years or 100,000 miles. 

If you’re not planning on keeping your car beyond its manufacturer warranty, then an extended warranty probably isn’t for you. But if you want to keep your car for longer, or you’re buying a used car, an extended warranty could still be on the cards. 

There are three main types of extended car warranty, a manufacturer’s extended warranty, a dealer warranty and a third-party warranty. 

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Manufacturer’s extended warranty 

A manufacturer’s extended warranty covers the cost of repair or replacement after the standard warranty has expired. You can purchase this in addition to the original warranty when you buy a new car, or before the original warranty runs out. 

This is a good option if you’re buying a new car and want to keep it on the road for longer than the manufacturer warranty covers you for, as you might feel the pinch if you have to pay for labour and parts yourself when the time comes. 

If you’re buying a second-hand car that’s relatively new, it may come with the remainder of the manufacturer’s standard warranty and again, it will be up to you whether you want to extend it.

However, some manufacturer warranties can’t be passed on to new owners, so if you are buying a car that on the surface still has some of its manufacturer warranty left, you need to check if it’s still valid for you as a second or third owner. 

Some manufacturer warranties are now service linked, such as Toyota, Lexus and Suzuki. This means you get the bog standard three years or 60,000 miles as standard, but after that you unlock a further year every time you take it in for service.  

Dealer warranty  

If you’re buying a second-hand car that’s out of its manufacturer warranty period, the dealer might offer their own warranty with the vehicle, while some ‘approved used’ models from well-known dealers come with their own guaranteed warranties. If neither of these options are available, they might sell you a used car warranty. 

Older cars tend to have shorter warranties (rarely less than three months), but if you buy an approved used vehicle from a franchised dealer, you can expect up to two years’ protection. 

Don’t forget that even if a dealer only offers a three-month warranty, the Consumer Rights Act tends to provide six months of legal protection against defects. If a dealer offers to sell you less than a six-month warranty, you may not consider it worthwhile given the protection automatically provided to you by law. 

Used-car warranty protections are much less clear-cut than their manufacturer warranty counterparts and it is important to read the terms and conditions before buying, to avoid any surprise exclusions should you ever need to make a claim.

They rarely cover ‘wear and tear’ items such as clutches, windscreen-wiper blades and tyres, nor do they typically cover faults that were present when you bought the car. 

If a warranty isn’t included with the car you’re buying, the price you’ll pay for one on top depends on the age and mileage of the car, the model of car, and the level of cover provided. 

Third party warranty  

The final option is a warranty operated by a warranty company, completely independent of the dealer. It is a rough rule of thumb that the more you pay for a third-party warranty, the more comprehensive it will be. However, a third-party firm might not provide cover for cars over a certain age or mileage.  

Iain is Head of Editorial at Carwow, the online car-changing marketplace. Ian has been an automotive journalist for almost 20 years, working for the likes of What Car? Auto Express and CarBuyer. He’s also helped produce content for Toyota and Lexus. Prior to this he worked in various motor sport websites and had a stint at Cosmopolitan magazine, too.  

Photo credits: Pexels