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Updated: 22 Mar 2022

Should you buy a used car warranty?

Is a used car warranty essential or is it cheaper to pay for repairs upfront? Our guide explains how used car warranties work and whether they are worth the expense.
Daljinder Nagra
How to buy a used car warranty 1

Many new car warranties only last a few years – three years is the most common – so if you have, or buy, a car older than this, by default you'll need to cover the cost of repairs yourself. One alternative to this is buying a used car warranty.

Whether you’ve reached the end of the new-car warranty supplied by your manufacturer or you’ve just invested in a used car, there's a glut of third-party warranties available to buy. 

Used car warranties profess to give you financial peace of mind by taking care of the garage bill if you encounter any issues with your car, but we've found that many come with too-high prices and limiting restrictions. 

Find your perfect second-hand car by viewing our used car reviews.

What does a used car warranty cover?

You might assume that used car warranties would cover any repairs that aren't obviously down to wear and tear (a standard exclusion). But when we've analysed several third-party warranties in the past, we've discovered terms, conditions and caveats aplenty, all designed to limit when the provider has to pay out.

The reams of small print can be baffling and contradictory. For example, if a warning light prompts a trip to the garage and a fault is discovered, your warranty may not cover it. But if you ignore the warning and let the part break, this can invalidate your claim – a catch 22 and one of several confusing examples we came across.

Our A-Z of terms and conditions further down the page should help you decode the lingo. 

Unlike used car warranties, car insurance is a legal obligation. Discover how to compare car insurance quotes and get the best deal.

The cost of car cover

Our previous research also found that many used car warranties cost more than the average repair bill for a used family car.

Most warranties can be tinkered with, but improving the package will increase the price, and once you’ve fine-tuned the cover to what you want you may find yourself with a plan that can’t compete with low average repair costs for most used cars.

Conversely, don’t be lured into a cheap deal that weasels out of coughing up your repair fees by including a list of terms and conditions as long as your arm.

A good alternative to buying a used car warranty would be regularly setting money aside for future repairs, and finding a good, local mechanic that also offers value for money. If, however, you want the peace of mind that a warranty might offer, make sure you read the small print carefully before signing on the dotted line.

You can reduce the risk of needing a warranty by choosing a car that's less likely to need repairs. Our unique survey reveals the most reliable cars in the UK.

Should you buy a used car warranty?

It’s difficult to justify the cost of many used car warranties when you consider typical exclusions and pricey premiums alongside the low average annual expense of car repairs.

A car in the garage is already a stressful time and arguing over what constitutes wear and tear with your warranty provider to try and get your garage costs reimbursed is an extra headache you could do without.

If having a warranty to cover your car as it ages is important to you, consider buying a manufacturer extended warranty when you buy a new car. These tend to have fewer exclusions than their third-party rivals.

Avoid getting stranded at the side of the road for hours. Check out the best car breakdown providers. 

Toyota’s extended car warranty scheme

Until recently, Toyota offered a five-year warranty as standard on all new Toyota models – longer than the three years offered by some manufacturers. 

As of 1 June 2021, it's introduced something a little different from most manufacturer warranties. 

First the bad news. It's reduced its standard warranty period to three years for new purchases. It claims most buyers will be unaffected due to the typical length of lease deals taken out, but if you plan to keep your car for the long-haul, it initially seems like  a straight reduction in cover.

But there is a silver lining. It's now possible for Toyota buyers to extend their cover up to ten years in total. For every subsequent year after the initial three-year warranty expires, Toyota will add a year’s warranty – on the condition that that scheduled maintenance is carried out within the Toyota dealer network. You can carry on extending cover up until the car’s tenth birthday or it reach 100,000 miles.

Obviously the catch is that, to take advantage, you are tied to having your car serviced by Toyota, rather than being able to shop around for a cheaper deal elsewhere. But you may consider this a price worth paying to avoid the risk of having to pay for expensive repairs. 

Extended warranties for used Toyotas

Crucially, the scheme – dubbed ‘Relax’– is open to any Toyota vehicle of qualifying age and mileage, regardless of its previous service history or whether you bought it new or used. 

So if you buy a second (or third or fourth) hand Toyota up to 10 years old and with less than 100,000 miles on the clock, and get it serviced at a Toyota dealer, you’ll receive a year of manufacturer-backed cover.  

This is something not to be sniffed at, particularly if you’re looking at particularly old or well-worn examples. If the car is in a particularly bad state, though, you may need additional work to bring it up to a safe standard before the warranty is applied.

You can find out full details on Toyota's website.

From dealerships to classifieds, discover the best place to buy a car

A-Z of terms and conditions

Wading through the seemingly endless terms and conditions of most car warranties is an exercise in patience even before you try to get your head around the vague terms that are open for interpretation.

Unfortunately, reading your policy is a necessary evil if you want to know exactly what cover you’re paying for. This A-Z guide will help you decipher the jargon.

  • Age limit – warranties have a pre-set age limit for the car. If your car is approaching it then a warranty may not be worth it.
  • Betterment – if a repair or new part makes your car more valuable, you may be expected to foot some of the bill.
  • Claim limit – the maximum amount of money you can get per claim – ideally up to the value of the car, but not always.
  • Consequential loss – where one car part failing damages another; an added expense not all policies cover.
  • Excess – the percentage of each warranty claim you will have to pay. Some policies increase the excess as your mileage goes up.
  • Garage choice – some providers have ‘approved’ garages. Using an alternative could leave you paying some of the labour rate.
  • Labour rate – how much of a garage’s hourly rate the providers are willing to pay. Most don’t stretch to the amount  franchise dealers charge, leaving you to pay the difference.
  • Mileage – check to see if there’s an annual or overall mileage limit. If your car’s above it the warranty won’t pay for repairs.
  • Pre-existing faults – any issues your car had before the warranty started may not be covered.
  • Regulated provider – make sure your provider is regulated by the Financial Conduct Authority and you get a 14-day cooling-off period if you change your mind.
  • Servicing schedule – you must keep your car serviced to the manufacturer’s schedule and keep any paperwork. Failure to do so can invalidate the warranty, as can fitting non-standard parts.
  • Time limits – some warranties only allow you to claim after a certain period (e.g. 90 days). Any issues arising during that time would not be covered.
  • Warning lights – If you ignore warning lights on your car’s dashboard the provider may refuse to pay out.
  • Wear and tear – car parts that fail due to wear and tear are usually not covered. Even when they are covered, 'consumables’ such as tyres and brake pads won’t be included.

New or used, find a car that delivers on performance, reliability, safety and comfort with our expert pick of the best cars