Five car warranty myths, debunked!

By Stuart Johnston

There is a lot of confusion about what a car warranty is, what it covers on a new vehicle, and what the differences are between various warranties and servicing schemes. Here are five popular warranty myths ready for detonation.

Myth One: A car warranty is the same thing as a guarantee

There is a very subtle difference between a warranty and a guarantee. A guarantee represents a promise that a consumer good, or product, will live up to its expectations. And if not, the maker guarantees to provide a replacement or give you your money back. There is normally a time period attached to this guarantee, although some relatively expensive consumer goods, like waterless cooking pots, for instance, have a lifetime guarantee!

A warranty is more of a conditional guarantee. In a complex piece of machinery like a motorcar, a warranty is provided that guarantees, for a certain period, that any or all proven defective parts will be repaired or replaced under the warranty period. This warranty period normally has a distance expiry date and an expiry date related to a time period after purchase. A new-car warranty may include the replacement of a vehicle, should it prove to be defective in one or more ways, and impossible to rectify after repeated attempts by the company’s service agents.

The warranty also stipulates certain responsible behaviour from the driver, or owner of the vehicle. If a car is not serviced, for instance, under the warranty period, this invalidates the warranty. Proven abuse of the vehicle, using it for purposes other than what it was intended for, such as racing it, will also invalidate the warranty.

It is important to note that certain wear-and-tear car items are usually excluded from the warranty contract, such as tyres, battery, wiper blades and brake pads. These excludable items are detailed in the fine-print of the warranty. So read it carefully.

Myth Two: A warranty and a maintenance or service plan are the same thing

When shopping for a new car, read the details of the warranty period and the maintenance or service plan period. They rarely have identical time periods or mileage limits, and they are separate contracts, if you like, that you enter into when signing up for a new car.

As an example, a new BMW will come with a warranty with an unlimited distance, which sounds fantastic. However, that same warranty expires just two years after purchase. Audi has a similar unlimited kilometre clause in its warranty contract, however an Audi warranty expires just one year after purchase!.

When it comes to maintenance plans, however, that same BMW has a  five-year/100 000 km maintenance plan as part of the purchase price. The Audi also has a five-year/100 000 km maintenance plan as part of the purchase price.

It is important to note here that a maintenance plan covers the cost of  labour at service and any spares and fluids  that might be needed to keep the car running perfectly under the agreed period. And, importantly, these  include wear-and-tear items. A less-expensive service plan provides labour costs free of charge, as well as stock replacement parts listed by the manufacturer at each service, but does not include the replacement of wear-and-tear items.

The warranty covers mechanical, body and trim items that may fail during the warranty period. But there are often important exclusions in some of these warrant contracts. So it is in fact worthwhile to read the warranty terms of conditions carefully on each car that you are considering buying. Particularly if you are financing that car over a period of up to six years!

Myth Three: Only the manufacturer can provide a warranty for a motor vehicle

There are many companies that sell so-called aftermarket, or top-up vehicle warranties. These are ideal products that provide a warranty for the mechanical components of an older used vehicle. In essence, these are insurance policies, similar to those covering accident damage. In this case, the “accident” may happen inside the engine or gearbox, or to the brakes or suspension. These aftermarket warranties give the buyer of an older used car peace of mind, but at a price, of course. Again, read the fine-print of these aftermarket warranties, and even more carefully than you would the warranty of a manufacturer. Do your research on-line to ascertain which aftermarket warranty companies have the best reputation.

Myth Four: All car warranties are basically the same

There is a huge difference in the structures of warranties for cars sold in South Africa. The shortest warranty periods, as mentioned previous, are attached to Audis, with BMW running them a close second. It is interesting that all three luxury German brands, Audi, BMW and Mercedes-Benz, offer very short warranty periods, but long maintenance contracts.

Hyundai, on the other hand, offers an excellent five-year overall warranty/or 120 000 km, whichever comes first, but any new Hyundais also come with a seven-year/200 000 km mechanical warranty as part of the purchase price deal. That’s confidence for you!

Nissan also offers an excellent warranty, at six years/150 000 km. These longer warranty periods benefit the owner of a car who only plans to sell it after four or five years.

Myth Five: Car Warranties cover every aspect of a car

We have stressed the importance of reading the fine-print of warranties. For instance, in some warranties, a water-pump, say or a diesel pump, perhaps,  may be excluded from the warranty, for reasons known only to the manufacturer! Read the fine-print carefully, and if there are important (i.e. expensive) exclusions, ask the sales person why this is so. If you don’t get a satisfactory answer, find out if you can get a similar vehicle, built by a rival manufacturer,  with a more inclusive warranty.