The advantages and disadvantages of car warranties

As with most things in life, car warranties have their pros and cons. We've outlined what they are so you can make a more informed choice about whether a car warranty is right for you.

Advantages

• Peace of mind and financial assistance
  If you buy a used car, a good car warranty can provide valuable peace of mind and financial assistance in the event of mechanical or electrical faults or failure. If you are buying a new car, or importing a new car from Europe, an after market warranty can extend the cover provided by the manufacturer's warranty.
• Tailor cover to your needs
  With an after market warranty you can tailor the cover level so that it is adequate for your needs.
• Breakdown recovery
  Most car warranties include some form of breakdown recovery cover however it will be your responsibility to organise the recovery and reclaim the costs (subject to conditions). When you buy a warranty, the warranty company may offer you breakdown recovery membership and it can prove cost-effective to purchase the two together.
• Savings on other products
  Some warranty companies have access to other motoring and leisure products and these can represent good value for money and offer significant savings.

Disadvantages

• Claims limits
  Normally, the total of all claims is limited to the value of the car or a specific limit for each item. Independent dealer warranties tend to have a maximum limit per claim, usually £250.
• Increases the cost of car ownership
  Buying a warranty will increase the cost of car ownership, although if you do need to claim it will prove to be money well spent.
• Validity and exclusions
  Failure to adhere to the terms and conditions, which for a manufacturer's warranty can be stringent, may invalidate your cover. Likewise, the validity and extent of the cover can be affected by usage and modifications.

Other things to look out for

When you buy a car warranty you should be able to choose where to take the car to be repaired. If you have a newer car that is still covered under the manufacturer's warranty then you will probably prefer to take it to a franchised dealer. Using a franchised dealer for repairs, rather than an independent garage, is likely to increase the cost of the warranty.

Before you buy, check the small print for clauses affecting the transfer of the policy including any administration charges. Not all warranties are transferable so if you do plan to change your car during the policy period then you'll need to ensure you buy a warranty that can be transferred to another vehicle.

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