Sunday, 14 April 2013

Used Car Warranty!! Is It Worth It?

If you have just took out a 'Used Car Warranty' you may want to hit the back button on your browser... This may hurt a little bit!

It has become a regular occurrence at the Garage. The customer drops of their car explains the fault, then as they are about to leave they mention that they took out a 'Used Car Warranty'. This then usually leads to the customer asking if the fault will be covered by their warranty policy. 

Before we go any further let me clarify that this article does not include the warranty policies offered by the main dealer or manufacture, when you purchase a used car through them! This article covers the used car warranty you may be offered when buying a car through an independent seller or the type of warranty you can buy for any used car. Google the term 'Used Car Warranty' and you will find plenty.

I have dealt with a whole range of different providers, so I am not going to pick any individuals. I will tar the usual suspects with the same brush!!!

Lets take a look at an example of how it works when you would like to make a claim...

          1. The warranty company is called to report the fault with the car. This 
              This may be anything from the rear brakes to complete engine
              failure.

          2. The warranty company responds informing us that the cause of the
              fault needs to be determined before a claim can be made. This 
              involves stripping the car down, locating the faulty component and 
              then have their assessor look at it and tell us if it is covered. If it is 
              not covered this will be at the customers expense.  
              
              Think cylinder head gasket, stripping the cylinder head off, finding 
              the cylinder head is cracked. The assessor 'determines' the cause of 
              fault makes the warranty void'. You would then be liable for all 
              costs up until that point, also you are liable for the repair costs.

          3. For a claim to stand any chance of being successful you will need to
              provide full and I mean full service history.

          3. The claim is unsuccessful and the customer feels ripped of by the 
              Warranty company.

 So why do people even bother to take out these seemingly useless 'Used Car Warranties'... Well for a start not every claim is unsuccessful. Be aware that most of the warranty companies will not cover you for 'wear and tear'. However they normally cover you for mechanical failure. Also there are some really reputable companies.

So you have decided that you want some warranty or at least find a reputable company.... Please, please, please do your research. Customer reviews, not on the warranty sellers website but on the forums around the internet are a treasure trove of information. Read and re-read the 'Used Car Warranty' sellers covered items and policy. Ensure you keep your car maintained to the standards that the warranty provider expects, this can mean, on time services and also ensuring the previous owner/owners had the car serviced on time. If not this will come back to bite you. Also ensure you have the money to pay for the repairs yourself and be prepared for hassle and stress when trying to make a claim, chances are it will be kicked out anyway if you have not done your research. If your car does breakdown stop immediately any further driving will likely void your claim. As mentioned before most used car warranties do not cover wear and tear. Also ensure your vehicle does not or is not likely to exceed the maximum mileage in the warranty sellers policy. Following the above will not guarantee a successful claim but it may help your cause.

Please also be aware that out of the last 10 claims I have dealt with only 1 was successful... That is a 10% success rate. 

If you want my advice put the money you were going to spend on a 'Used Car Warranty' into a separate bank account each month, earn interest on the money and you can pretty much guarantee a successful claim when you car breaks-down. Don't gamble your hard earned wages on a flaky warranty policy.

To save you some time here's the link to the Google results page for used car warranty: Used Car Warranty Results

Have you had any experience with used car warranties? Drop a comment below!

      
  

3 comments:

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  3. If you are worried about extreme out-of-pocket expenses from repair bills for old cars, I recommend you buy the manufacturer's own extended Warranty. Do not buy one from the dealer, though, because those are often third party too.

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