Used car warranty explained

How to get cover for an older vehicle to mitigate potentially expensive repair bills.

What is a used car warranty?

Every new car sold should come with a manufacturer warranty. This is typically valid for three years and 100,000km, but there are some famous ones (like the Hyundai five-year/unlimited mileage and the Kia seven-year cover) that go for longer. Most manufacturers also offer the ability to extend their warranty on a year-by-year basis for an additional fee, once the original expiry date is approaching. You’ll find that sellers of a lot of nearly-new second-hand cars will make a big deal about whether it has any manufacturer warranty remaining or not, as it’s a key driver in used-car sales; it brings extra peace of mind to the customer.

However, let’s assume a car has come out of its manufacturer warranty – this means it is no longer covered for unexpected repair bills and maintenance. Warranties tend to cover everything but ‘consumables’. This phrase means things that are designed to wear on a car, like tyres, windscreen-wiper blades, brake pads and discs, engine oil and so on. However, failures of larger components – like engines, gearboxes, electrical systems, suspension and so on – would be covered, and these are the things that will cost a car’s owner dear if they’re not under warranty. A used-car policy covers these things.

So how does it work?

Very much in the same way as a new-car warranty, only you have to pay for the privilege; you automatically get a standard warranty without any extra expense when buying a new car, but it’s not a given on used vehicles. However, some trade sellers will offer their own short-term warranties (e.g., three months of cover, limited mileage) as an incentive to buy, while many garages and second-hand independent car showrooms will provide longer warranty cover for an annual fee. Otherwise, there are third-party warranty companies which will sell you a policy that covers the large, unannounced repair bills.

Presumably there are conditions to be met?

Absolutely. You’ll be very lucky to find a warranty company that will offer to cover a vehicle that’s more than ten years old or which has done 200,000km, while you need to check all the small print of any warranty you’re looking at very, very carefully – we’re not trying to say aftermarket warranty companies are dodgy, but many will try anything they can to wriggle out of paying up in the event you actually have to make a large and substantial claim on a faulty used car. Many will also stipulate that the car you are buying must have a full service history when you purchase it, and they may also demand that you service it at specific outlets during your ownership for the warranty to be valid.

Is it worth having a used-car warranty?

Oh yes, definitely – if you get the right one at the right price. Unfortunately, we can’t talk about what you’ll pay here, because it will vary from car to car, depending on their year, condition, usage and so on; each warranty quote is individual, as it’s like an insurance policy. But if you get one from a reputable company and the price is acceptable to you, it will give you the ‘mental safety net’ to go for that second-hand car you’ve got your heart set on.