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.
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.
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.
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.
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.
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.
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.