Used car warranty: Should I buy one and what are the benefits?

Although cars are more durable and reliable now than ever before, they’re still prone to the odd breakdown or malfunction. And this is something that drivers can never predict. You’re not legally required to have a warranty on a used car. However, opting to buy one when the manufacturer’s warranty comes to an end, will ensure complete peace of mind.

According to Lancashire-based aftermarket vehicle warranties provider, Warrantywise, 85 per cent of UK drivers are likely to be driving without a warranty. The company’s data shows a larger number of motorists are taking lease extensions due to lack of new car availability. This is a result of global semiconductor shortage causing production delays.

Presently, the wait on new cars can be up to 12 months. Therefore, it’s no surprise that the used car market has seen a rapid growth of 16.4 per cent in 2021. Furthermore, demand from motorists who are forced to keep their older cars, teamed with Covid-19 pressures, has all added to the increase in used car sales.

The concern then, is that many motorists with used cars are also facing high repair bills. These could be largely reduced, or free, if they had a valid warranty.

In addition, a This is Money study found that drivers in the UK are also keeping their cars for longer. Up to 20 per cent of cars are reaching a healthy age of 13-years-old. Whilst manufacturer warranties cover vehicles against electrical and mechanic failures over a pre-agreed term – usually for anywhere between three to five years, or up to 60,000 miles.

So, the question remains: should you buy a warranty for your used car? Let’s look at how aftermarket warranties for used cars work and if they could be the right answer for you.

Used car warranty: Why do I need one?

If you’re thinking of buying or leasing a used vehicle, or currently own or lease a second-hand car, getting a warranty is a sensible thing to consider. A valid warranty will protect you from the financial shock of unexpected repair bills. So, in the long run, a warranty is a good investment and offers value for money too.

Warranties cover vehicles of all makes and ages. Having a valid warranty ensures that most, if not all, repair costs will be covered by your provider.

The alternative is that you are comfortable with paying any future costs of repairing your car yourself.  

Used car warranty: What are the benefits?

Cars are made to be highly efficient. With regular servicing and M.O.T checks, most will run like clockwork and have a good lifespan. However, it’s very rare for any car to never have a problem. Especially when you’ve been driving it for so many years. RAC’s Breakdown Britain Report revealed that they attend over 2.5 million roadside assistance callouts every year.  

A mechanical failure can’t be predicted. Even the most reliable make and model will need some TLC as it ages. The solution? A used car warranty. Here, are some of the benefits:

• Car tech and parts have become a lot more advanced and sophisticated, which means that the cost to replace faults is very expensive too. A warranty for a used car made in the last decade or so would help to cover high costs in the event of a repair.
• Some cars, especially higher spec models, may require replacements for specialist parts, which could be a costly situation if you don’t have a warranty.
• Major mechanical failures to clutches, brakes and the exhaust are all covered for defects, ensuring everyday peace of mind.  
• A warranty can be paid for monthly or as one annual payment. This allows you to budget and control your finances accordingly.
• Most warranties will come with good extras too; breakdown cover, car hire allowance and cover while driving abroad – all of which can also help to bring down your car insurance price as you won’t need to add these options onto the premium.
• If you do face a repair, you can rest assured that it will be carried out by specialist engineers who will use manufacturer-certified parts.  
• Your provided may even offer discounts on MOT and servicing too.

Used Car Warranty: How much does it cost?

Once you’ve decided that you’re ready to buy a used car warranty plan, it’s time to start your search. A good place to consult is the car manufacturer themselves, as many offer extended warranty options.

Independent warranty providers will ask you to fill out a criterion, like when you’re searching for car insurance. This includes make and model of the car and if it’s been modified, the annual mileage, what the car is used for, and so on. This helps to determine the cost for your used car warranty.

The price of a used car warranty depends on the level of cover that you opt for. Basic cover for a small car can start from around £30 per month, whilst more comprehensive cover is likely to rise to anywhere up to £50 per month.

To ensure that you find the best warranty plan and price for your vehicle, here are some useful tips:

• Shop around and get quotes from several different warranty providers.This way you can compare what’s included in the plan and the prices, to find the best value for money based on your vehicle’s requirements.  
• Read through the different levels of cover so that you know exactly what you’re paying for and what’s included if you were to make a claim.
• Does the policy include extras like breakdown, or car hire, and European cover? It’s always good to check if there’s a little something that makes a policy stand out.
• Have a phone call with the warranty provider and ask plenty of questions.
• Read customer reviews, especially from those who have had a policy with the provider for a while or made a claim.

All of the above should help with finding a warranty that gives you the right cover for your individual vehicle and driving requirements.  

Remember, cheaper warranty cover means that more serious repairs will have to be paid by yourself. You can check the reliability index website for average car repair costs and see if getting a higher-level policy would benefit you in the long run. But check that the cost of a warranty is not more expensive than paying the cost of repairs yourself.

Used Car Warranty: What does it cover?

The cover you opt for will depend on the policy you choose. Usually, a vehicle warranty will cover repairs for:

• Air conditioning or cooling system
• Engine
• Electrics
• Gearbox
• Fuel and ignition system
• Non-frictional clutch and brakes
• Steering
• Suspension
• Transmission system

Similar to a car insurance policy, it’s imperative that you check the documents for your policy. Look out for any specific exclusions which may be important for you. A good example is the car’s electrics. Some warranties that include electrical repairs may not include cover for the stereo system. The terms and conditions are up to the provider’s discretion so it’s vital that you read through the documents and understand the cover that you’re getting.

Some extras that may be included in your policy:

• Breakdown and recovery
• Car hire when yours is being repaired
• Overnight hotel expenses while repairs are carried out
• Emergency travel expenses, e.g. taxis, or other public transport
• European cover for driving your car abroad

Checking your summary of cover before purchasing a policy or getting on the phone to an agent for further clarification will ensure that you have all the right components included in your cover.

Used car warranty: What isn’t covered?

This is important information to know. Often, customers are surprised and frustrated when it comes to repairs of the below, when they find out that their warranty doesn’t cover these components.

Again, what’s excluded also varies from one provider to another. Here are some of the main things that warranty cover does not include:

• General wear and tear (which may be an extra option for an added price)
• Batteries, and worn-out brakes and clutches
• Wheels and tyres
• Exhausts and catalytic converters
• Damage caused by oil leaks
• Cars that are used for private hire, taxis, commercial purposes, or competitions
• Updates or improvements to unbroken parts
• Any damage caused by frost, friction materials, blockages, contamination, or sludge
• Repairs because of inadequate workmanship or faulty components

At this point, read up about the car your drive and what sorts of things are likely to go wrong. Ensure that your checklist coincides with your warranty cover. Select a policy that ticks all your requirements. Even if it’s a little pricier, it may be a better option than having to fork out the costs for future repairs.

Used car warranty: Are there any conditions to be aware of?

Once more, like all insurance policies, warranties have conditions. These are terms that need to be met otherwise the cover is invalidated. Some of these conditions include:

• Age limit: Cars that are older than 10 years will usually not be covered.
• Claim limit: This is usually based on the value of the car, and the figure is the most that your provider will pay for repairs.
• Mileage limit: Most providers will not offer warranty for vehicles that have done more than 60,000 miles, however, more and more warranty providers are offering a limit up to 120,000.
• Pre-existing faults: Any issues and faults that already existed before your policy begins will not be covered.
• Warning lights: If you’ve had warning lights for a problem and have been ignoring the signs, your claim may be invalid.
• Maximum hourly rate: This is the amount that the provider will pay for labour costs.
• Regular servicing and MOT: You must keep up with regular maintenance of the car and each service and MOT should be done at an approved garage or dealership and recorded in the logbook.
• Insurer authorisation: Repairs to the vehicle must be approved prior to a claim being paid out.
• Authorised garages: Any approved repairs should be performed at a garage that is authorised by the provider.
• Car modifications: If you modify your car in any way, you must inform the provider of the changes. Depending on what the modification is, your policy may be invalidated.
• Maintenance: Always take care of the vehicle in compliance with the manufacturer’s handbook.
• Time limit for claims: Once you find a problem with the vehicle, you must inform the provider within seven days of spotting it.

This is where it’s important to comb through your policy documents in detail, because if you fail to meet all their conditions, they can refuse to pay any future repair claims or completely void your cover. Read the insurer’s policy documents for a full list of conditions before you pay for cover.

Used car warranty: How and where can I get cover?

If you’ve bought your car from a dealership or directly from the manufacturer, the likelihood is that you will be offered a warranty extension at a cost when your standard warranty cover runs out. However, this is often more expensive than getting a warranty from an independent provider.

The best way to ensure you’re getting the right deal, is to compare car warranty quotes and to always read the fine print.

Most used cars will include a 12-month warranty or may still be within the manufacturer warranty, which can be anything from five to seven years. It’s wise to check your purchase or leasing documents to ensure if the car you’re driving is under warranty already.

At Hippo Leasing, all our used cars come with a complimentary three-month fully comprehensive warranty, which is also available with Hippo Protect lifetime service and warranty for £39.99 per month.