The Value of a Warranty

 
When buying or leasing any vehicle, either new or used, there will be or at least should be some type of warranty, which can either be a manufacturer’s warranty and/or a dealership warranty all of which can vary considerably in terms of what they offer and their terms and conditions.
Many people simply assume that a warranty covers everything they need it to, in the same way that many people assume that any type of auto or home insurance will simply look after them if they have any problems. Sadly this is not the case.
A warranty is effectively an insurance policy on certain mechanical issues relation to the car, and there can be significant costs involved if there is a misunderstanding or confusion about what the warranty covers or doesn’t.
It is certainly fair to say that a manufacturer’s warranty, is designed to provide major protection against any type of mechanical breakdown or defect for a fixed period of time. There may be certain exclusions which should be noted and replacement cost estimated if need be. It should also be noted that there will be certain conditions placed upon the warranty in terms of servicing and maintenance plans.
This is normally fairly straightforward in one sense, in that it normally stipulates that all servicing and maintenance work to be done by an authorised dealer, and that official manufacturers parts should be used more work. Any authorised dealer is likely to do this as a matter of course. Of course there are costs involved in this as it rules out any cheaper option or the individual doing the work themselves.
There may be other costs involved in a warranty, depending on whether the warranty will include any breakdown insurance or not, and any additional costs involved in any type of accident or malfunction of the car.
A manufacturer’s warranty will be for a fixed number of years, and should normally be transferable within that period if the vehicle is sold on or traded in for another one. In addition, a dealer may well offer some type of extended warranty, especially if the time left on the original manufacturer’s warranty is limited. Extended warranties of all types need to be examined very carefully as whilst they can seem quite attractive, they can actually end up being quite costly and not really that effective in terms of what they offer.
If an individual is leasing or buying a new vehicle then come the full manufacturers warranty. There may well be room for negotiation with the dealership for the costs involved in the fixed servicing and maintenance plans that are likely to be offered as well. The value of these plans as well as the value of a warranty is not simply that they just offer a fixed price, but they also offer a degree of security and reassurance in terms of the individual knowing what these costs are going to be in the long-term, it provides real peace of mind.

Peter Main is freelance writer who has almost forty years experience of the car industry, and a wide knowledge base of personal finance. He writes extensively about Auto Finance, with companies such as Honda and related issues such as auto insurance.