If you are considering buying a used car, you may also wonder whether you need to get a warranty. The nature and scope of these basic insurance policies nowadays mean there’s a lot to consider.
First and foremost, should you take out a used car warranty, you want to make sure that it covers you for everything you think might go wrong. Dealers can often make big promises but if it’s not covered under the warranty, it’s unlikely they will repair your car.
What is a Used Car Warranty?
It’s usually offered by a second-hand dealer, covering you for problems that may arise with the car you are buying. You can also get third party warranties that you pay for much like insurance and which should cover you for certain eventualities for a specific period of time.
What most people need to balance when they consider a warranty on a used car is whether the extra money they are spending is going to be more than the cost of repairs they might have to do. The trouble is that many third-party warranties for used cars can be confusing and difficult to understand. They can also be quite expensive.
You really do have to read the small print when deciding to get a warranty of this type. Some policies, for example, will have what is called a consequential loss clause. This means that damage to a part that is covered may be caused by a part that is not covered under the policy, which essentially means…it’s not actually covered.
If that sounds confusing, the world of used car warranties can be. Research carried out by Which? found that most warranty policies were more expensive than the average household cost for car repairs over a year. With some of the more expensive policies, the watchdog found that the cost could be as much as 10 times the average repair bill.
Cheap vs Expensive Used Car Warranties
An expensive warranty can cost anything over £600 a year while the cheapest ones come in at about £180 to £200. The difference between a costly policy and a very cheap one, you won’t be surprised to learn, is the amount that is excluded and the level to which your covered.
Even with expensive warranties, you may find arguments over, for instance, what is natural wear and tear and what is down to a fault in the car that you have purchased.
Should I Get a Used Car Warranty?
New vehicles come with a manufacturer’s warranty which covers you for a period anywhere between three and seven years. Used cars don’t have this luxury and buyers can often be lured into getting a warranty without really understanding how it benefits or disadvantages them.
It can also be pretty time-consuming going over all that small-print to discover where you are covered and where you aren’t.
Another option is to make sure that you get your used car checked over by a professional who will be able to highlight any potential areas that will cost you in the future. You may be able to use this information to lower the asking price for the car and it gives you the opportunity to put aside money to pay for any future potential repairs should you need them.