Used car warranties versus new car warranties

Whether you’re buying a used car or a new car, it’s likely that it’ll come with a warranty of some kind. Independent dealers may offer used cars with optional third-party warranties, while used cars from franchised dealers will come with a warranty backed by the manufacturer. New cars will always come with a warranty, and you’ll usually get the chance to extend this as an added extra.

But what’s the deal with warranties? Are they worth having, especially on a new car when there really shouldn’t be any problems?

Let’s drilldown into the detail and find out the difference between new and used car warranties, as well as if a warranty on a new car can be carried over to cover a new owner.

Download our guide to the Ins and Outs of Used Car Warranties

New car warranties

All new cars come with a manufacturers’ warranty that should cover most faults except wear and tear of parts such as tyres and brake pads. Most manufacturers will require you to keep your new car serviced, on time at regular intervals, at an approved dealer or repairer.

When the manufacturer’s warranty expires, you can:

  • Build up savings to cover unexpected costs
  • Sell your car and buy one which has a warranty
  • Purchase a new warranty

As your car ages, it’s worth remembering that according to industry data 40% of cars aged between five and nine years suffer a breakdown each year - so extending your warranty is probably a good idea.

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Extended warranties

Standard used car warranties tend to cover a three-month period. You’ve probably got a warranty of some kind on your car, and if you opted to extend that cover beyond the usual three months then you’re not alone. According to the latest data from the RAC, customers are extending their cover for longer periods. A six-month warranty is now becoming the norm in many dealerships, and some motorists are extending their cover for even longer periods.

The RAC Dealer Network found a 5% increase in warranty length when comparing figures year-on-year. In May 2018, the typical warranty sold was 9.3 months in length but the equivalent figure for the same month this year has risen to 9.8 months.

The statistics for car supermarkets are even more pronounced, with a rise of almost 15% from 12.2 months to 14 months.

In total during 2018, warranty provider, Assurant, had recorded a reduction of around 10% in sales of three-month cover and a corresponding increase in six months cover.

What’s covered

Generally speaking, a new car warranty should cover all mechanical and electrical faults and also guarantee against the appearance of rust for a minimum of three years. Different brands’ policies vary in some respects, though.

Depending on the policy of the selling garage, used cars are sometimes sold with a warranty as part of the deal. A used-car warranty typically lasts for three, six or 12 months, with older cars often supplied with shorter policies. Cars sold by franchised dealers are typically marketed under an ‘approved used’ scheme and are generally covered by a 12-month warranty.

If you find a good aftermarket policy and you’re happy with the cost, you’ll be reimbursed for any repairs needed over the duration of the warranty. Although, be aware that third-party warranties tend to have more exclusions than manufacturer’s warranties; some only cover issues with the engine and gearbox, for example.

There are three types of car warranty: manufacturer policies, dealer policies and third-party cover. All new cars come with a manufacturer warranty, although you’ll have to go through one of the brand’s dealers if you need to make a claim on this.

They can cover a lot, so find out everything you need to know by reading our blog on what’s included in a car warranty.

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Who underwrites warranties?

If you’re buying from a franchised dealer, any warranty is likely to be dealer-backed. Smaller dealers often use third-party companies for their warranties and some charge extra if you want to take out a policy. If this is the case, it’s well worth reading through the paperwork carefully and getting a second quote elsewhere. Shop around; it may be possible to buy a more comprehensive warranty for less money.

You can also find warranties provided by motoring organisations such as the AA, RAC and Green Flag. Insurance companies frequently offer breakdown cover as part of their packages, which might be provided by one of these organisations.

Warranty tips

When it comes to car warranties, bigger is generally better. Nothing shows a manufacturer's confidence in its build quality like a lengthy guarantee that covers you against major failure.

As warranties are transferable because they stay with the car not the owner, having a few manufacturer-covered years left on the clock can do nothing but help the residual value of your car.

A five-year warranty is a pretty good deal. If you're buying new, then the chances are you'll have changed your car before it expires. It's transferred to any subsequent owners too, so second-hand buyers can also benefit from the remainder of the cover.

Don’t forget to check the terms and conditions of your warranty, which typically limit the mileage you can cover, and which vehicle parts are included under the terms. For example, the class-leader in warranty length, Kia, have a seven-year warranty that’s limited to a maximum of 100,000 miles. The battery and air conditioning refrigerant are only covered for 24 months, and cracks in the exterior glass are only covered for the first 100 miles or three months.

Ford offers a standard 3-year/60,000-mile warranty on all its new cars. While Ford Direct have a selection of used cars that benefit from a two-year Ford warranty, and extended warranties are available on both new and used vehicles. These can be extended to cover a fourth and fifth year when the car is sold, which is especially beneficial to the new owner.

When you buy a car from a dealer like Junction17, third party warranties can extend these periods of cover even further. When your warranty is about to run out you can buy a third-party warranty through the dealer for added peace of mind. Happy days!

Download our guide to the Ins and Outs of Used Car Warranties