Are you getting a new car? Congratulations! But do you know that even new cars can disappoint us sometimes? They do, and that doesn't stop us from wanting and buying them. So go ahead and buy that car, but make sure you get a warranty for it. A warranty is the surest way of securing a significant investment. There are three types of car warranties:
1. New car warranty
2. Extended warranty
3. Statutory warranty
New Car Warranty
When you buy a new car, the manufacturer gives you a guarantee or a promise that the vehicle will perform as advertised and has no defects. If faults do arise within a specified number of years and kilometres (the standard is 3 years or 100,000 km, whichever comes first), the warranty ensures that the manufacturer will shoulder the repair or replacement of covered damages.
Most automakers now offer longer thresholds. For instance, Ford, Honda and Hyundai offer 5-year unlimited km warranties, while Kia outdoes them all with its 7-year unlimited km coverage.
All conditions are articulated in the warranty, including the limits as to the type of damage covered. Consumable and highly-wearable parts, such as brakes, fluids, wipers, bulbs, and the like are not included in the warrantied parts. If you notice creaks and squeaks in the interior trims, you'd better head on to the mechanic because they are also not covered. Tyres are generally covered by their own manufacturer's warranty.
For the full list of uncovered parts, check out the fine print in your car’s warranty and look for Exclusions.
You may extend the time of the manufacturer's warranty through an extended warranty. Extended warranties will vary in price and length of coverage depending on the manufacturer or dealer.
Why should I take an extended warranty? Unlike the manufacturer's warranty, the extended warranty will cover additional mechanical and electrical components with customer-centric initiatives like roadside assistance.
The thing about this type of insurance is that you can make arrangements for it when buying the car. You may, if you do not initiate it during purchase, take it up later on while the manufacturer's warranty is still valid. When the manufacturer's warranty ends, the extended warranty then takes effect.
Why choose this warranty? It will help you avoid costs (or at least reduce) associated with fixing broken down cars, which happens more often to vehicles beyond the initial warranty period.
Are Extended Warranties Worthwhile?
Manufacturer's warranties limit the faults for which the manufacturer is liable. An extended warranty, on the other hand, gives you more options and essentially reduces your expense on repairs and maintenance.
Do you typically drive long distances and end the year with high-kilometre readouts on the odometer? If so, it would be best to get a warranty that suits you instead of pre-determined kilometre conditions on the manufacturer's warranty.
NOTE: Before you settle for an extended warranty, take time to read and understand the terms. You don’t want to be caught unawares about provisions restricting your choices, such as which mechanics to go to and what parts to use.
A statutory warranty is provided by Australian law under the Trade Practices Act of 1974 at no extra cost to you. If the car you got turns out to be faulty, the warranty will protect you from financial headaches.
To avail of a statutory warranty, you have to buy your car from a licensed dealer or a licensed chattel auctioneer. There are conditions required for the statutory warranty to apply, and these conditions vary by state.
In Queensland and Victoria, for example, a car is covered by statutory warranty only if it is less than 10 years old and has not travelled more than 160,000 km. In QLD, the warranty ends in 1 month or 1,000 km, whichever takes place sooner, while in VIC, the warranty lasts for 3 months or 5,000 km.
In Tasmania, the warranty covers cars less than 7 years old with no more than 120,000 km on its odometer. It will expire in 3 months or after 3,000 km, whichever comes first. The thing to remember is to find out what the law in your state provides.
Just as the manufacturer's warranty, the statutory warranty does not cover car parts highly susceptible to wear and tear, including tyres, car accessories, batteries, and defects from accidents or general misuse of the vehicle.
We hope we have enlightened you about what warranties cover and what they don't. Now it's your turn to check which type of warranty you have. And always remember, warranties only help cover some expenses and does not in any way cushion you from accidents. So drive defensively and keep yourself safe at all times, it's your responsibility.
Apart from these warranties, you also need to know about how the Australian Consumer Law protects you. More on this in our next article, so keep yourself updated by following Carpart.com.au.