Driver Knowledge Tests

Is a car warranty worth it?

When you are buying a new car, one of the decisions you have to make is whether or not to buy an extended warranty from a company like CarShield. When purchasing a vehicle it’s common for people to spend as much money as is in their budget on the actual car without leaving any extra for auxiliary costs. These costs include what are often called ORC or on-road costs, and include things like registration and government charges, unless you are quoted a ‘drive away’ price.

A warranty is a cost that sits on top of that, but one that functions like an insurance policy in case anything goes wrong. This can make it a tough decision as you’ll need to understand the CarShield cost and warranty exclusions before you commit to purchasing the vehicle. Here’s what to consider

What car warranties don’t cover

Most warranties will cover major components of your car, such as the engine, transmission and drivetrain. However, there are usually exclusions such as:

1) Wear-and-tear components

Wear-and-tear components, such as brake pads and air filters, fluids, windscreen wipers, and seat coverings are typically not covered, since these are part of a vehicle’s everyday wear and tear.

Before purchasing an extended warranty, ask about what components are covered and which repairs you will pay for out of your pocket.

2) Aftermarket or modified parts

Many car owners take pride in personalising their vehicles. There are plenty of aftermarket parts available to help them do just that. However, any modifications to your car can void your extended warranty. This can be a real problem if something goes wrong with a part you have modified because you will be stuck paying for the repairs yourself.

Examples of modifications that can void your extended warranty include changing the exhaust system, ‘chipping’ the engine (i.e. making it more powerful), lowering the suspension or putting in substandard cheaper parts. So before you make any modifications to your car, be sure to check with your warranty provider to see if the extended warranty will still cover it.

3) Damage caused by environmental factors

Environmental damage is often excluded from coverage as it would be covered under an insurance claim. This can include damage from flooding, hail, or exposure to excessive heat or cold.

4) Damage caused by lack of proper maintenance

These plans do not typically cover damage caused by a lack of proper maintenance. If you neglect to change your oil, you’ll be stuck paying for any resulting damage yourself. Of course, keeping up with the required maintenance can be a hassle and sometimes even expensive, but it’s often cheaper to pay for regular maintenance than to end up with a costly repair bill down the road.

5) Unauthorized repairs

Always get pre-authorisation from your warranty provider before having any work done on your car. Otherwise, you may pay for repairs out of your wallet. In addition, it’s important to keep track of all the repairs made to your car. This will help you keep track of what is and is not covered by your warranty. By taking these precautions, you can avoid unpleasant surprises down the road.

What are the benefits of having an extended warranty?

You can save money on automotive repairs

When your car breaks down, it can be a significant headache. Not only do you have to deal with the inconvenience of being without a vehicle, but you also have to come up with the money to pay for repairs. Those repairs can really add up if you don’t have an extended car warranty.

Many people think that extended warranties are a waste of money. If you do your research and find a good one, they can be pretty valuable. Make sure to read the fine print and understand what is not covered before you purchase an extended warranty to know what you’re getting.

Peace of mind

Car breakdowns are also covered in some extended warranties, where there’s a roadside assistance package included. This may include rental car reimbursement and towing fees. This can provide peace of mind on the road. 

The bottom line

If you’re still on the fence about whether or not to purchase an extended warranty, consider talking to your mechanic or researching online. As warranties come at various price points, your decision will be impacted by your budget versus the services provided. There are many resources available that can help you make an informed decision.

Darren is an expert on driving and transport, and is a member of the Institute of Advanced Motorists

Posted in Advice