Whenever people talk about car warranties and car insurance, they refer to them as two forms of 'protection' for a vehicle. But if they both provide you with protection, what's the difference between the two? Is a car warranty the same as car insurance?
The short answer is no; a car warranty is not the same as car insurance.
In simple terms, a car warranty protects you from faulty car parts that the manufacturer used to build your car. Car insurance, on the other hand, protects your vehicle from damage caused by things like accidents or natural disasters. Both of them work by 'protecting' you from having to dig into your pocket to pay for repairs or new parts.
In this article, we’re going to explore both forms of protection in greater detail. By the end of it, you’ll be able to explain how either of them works, and how both protect your car.
What Is The Purpose Of A Car Warranty?
A car warranty helps you in the case of faulty car parts put in by the manufacturer. With warranty coverage, you won’t have to spend to fix or replace the part yourself. Instead, you’ll bring the car back to the manufacturer, and they’ll sort it out for you.
Who Provides The Car Warranty?
The vehicle manufacturer provides you with a car warranty. Usually, car warranties will last for a specific number of years. Here are some of the best new-car warranties offered by manufacturers. In some cases, you can pay a little extra to get an extended warranty that’ll protect your vehicle for much longer.
A car warranty has certain conditions attached to it. For example, you’ll need to bring your car back to the manufacturer or one of its approved workshops for your regular maintenance. Plus, they might put some restrictions on installing aftermarket parts in the vehicle.
These conditions might differ between manufacturers. That’s why you should always ask all possible questions about the warranty and read the fine print before you decide to buy a car.
A warranty is all about peace of mind. It’s better to have it and not need it, rather than need it and not have it!
Do Used Cars Have Warranty?
Yes, used cars should also come with a warranty.
What’s the difference?
Well, in this case, the dealer who sold you the used car will provide you with the warranty coverage. Typically, warranties for used cars have a shorter duration than brand new vehicles. Still, the warranty has a similar purpose of providing you with peace of mind.
What About Warranty For New and Used Auto Parts?
As a side note, you should also know that new and used auto parts also come with warranties. Of course, the manufacturers of those parts will provide warranty coverage limited only to the part in question.
Careful, though! Before you decide to install any kind of car parts on your own, be sure that it doesn’t break the terms of your car’s warranty. You don’t want to lose that coverage just because you decided to replace one small spare part!
How Does Car Insurance Work?
Car insurance is also a form of protection for your vehicle. The significant difference here is that it doesn’t protect you in the case of faulty parts. Instead, it covers your car from damages it receives under certain conditions like accidents and natural disasters.
When people talk about car insurance, the first thing that comes to mind is road collisions. A typical road accident will involve damage to the vehicles involved, injuries, and sometimes even property damage (like if you crashed onto a fence, for example).
With car insurance, those who are involved in a car accident don’t have to pay for all the repairs or medical treatments themselves. Instead, the insurance company will pay for everything that’s agreed upon in the person’s insurance policy.
Protection Against Natural Disasters
The useful thing about car insurance is that it also covers what people call ‘acts of God’ or force majeure. When you sign up for auto insurance, you can choose to protect your vehicle against flood damage, fires, and other natural disasters.
The more things you protect your car against, the higher your insurance premiums. So, it would be a good idea to focus your insurance coverage on situations that have a higher chance of happening in your area.
For instance, if you live in a flood-prone area, then it would be smart of you to include protection against flood damage.
Which Car Parts Does Car Insurance Cover?
Usually, car insurance policies are broad, covering the vehicle as a whole and not aimed at specific car parts. Instead, most insurance companies will pay for whatever repairs are necessary to get your vehicle up and running again after an accident.
There is one exception, though. With many insurance companies, you can request additional protection specifically for your windscreen. So, if it ever gets cracked or damaged for whatever reason, the insurance company will pay to repair or replace it for you.
Auto Insurance Is Customisable
Always keep in mind that auto insurance is customisable. Aside from the essential protection that it provides in the case of road accidents, you can also pay for protection from natural disasters, theft, fires, riots, and so on.
Of course, the more things you include under that protection, the higher your insurance premiums. But as I’ve mentioned repeatedly, insurance is like going out with an umbrella; it’s better to have it and not need it, rather than find yourself in a situation where you need it but not have it.
In A Nutshell: Car Warranty Vs Insurance
So, let's sum it all up. Car warranties and insurance policies both provide protection. They don’t prevent these mishaps but 'protect' in the sense that you're 'protected' from having to pay for car repairs all from your pocket.
In the simplest of terms: if the manufacturer put a faulty car part in your vehicle, then the warranty will ensure that they replace it without you having to pay for it. If you get into a car accident, or if a flood sweeps your car out to sea (an exaggeration, but you get the point!), then the insurance policy will pay for the repairs or pay to get you a new car.
As always, when it comes to warranties and insurance policies, always read the fine print first!
If you’d like to learn more about cars, check out the blog at Carpart.com.au, where you’ll discover plenty about topics ranging from car insurance to how car parts work. You will also find a useful tool for finding and requesting auto parts and car accessories.
By Ray Hasbollah