New vehicles are sold with a warranty that can vary in duration. Most manufacturer warranties for brand new vehicles lasts for at least 3 years – this means that mechanical and electrical faults are covered for at least 3 years from the time the vehicle is purchased.
Some newer vehicle brands, especially South Asian brands, may offer a warranty for as long as 7 to 10 years. In all cases, it is also mileage dependent. For example, the warranty may state 3 years or 60,000km which means that it ends either in 3 years from the time of purchase or when the mileage reaches 60,000km – whichever comes first.
However, South Africans are keeping their cars for longer and eventually these manufacturer warranties may expire. Approximately 42% of vehicles in South Africa are over 10 years old. Vehicle owners have to decide if they wish to continue with a motor warranty cover once the manufacturer warranty expires. They will have to opt for an extended manufacturer warranty, if available, or opt for a third party motor warranty cover. It is important to understand the pros and cons of both options.
Extending the Manufacturer Warranty
Most manufacturers will allow you to extend your motor warranty for a few years after the initial purchase warranty expires. Vehicle owners can even buy an extended warranty at the time of the vehicle purchase, or later but before the purchase warranty expires. However, not all manufacturers will offer an extended in-house warranty after a certain age or mileage of a vehicle for various reasons.
The reality is that age and use causes mechanical and electrical wear and tear in the life of any vehicle, be it a car, SUV, bakkie or motorcycle. While manufacturers are willing to stand by their product in the first few years of its purchase and with reasonable usage, mechanical breakdowns and auto electrical failures are inevitable with an older vehicle. Without a warranty, the cost of maintaining the vehicle rises.
Vehicle manufacturers are focussed on producing and selling new vehicles. The increased risk and cost of covering an older vehicle may not be in their best interests. They may therefore limit the ability of extending their in-house warranty beyond a certain age or mileage. Most dealerships, however, do offer third party motor warranty cover especially for used vehicles on their floor. This may be the only option for an older vehicle, where the owner wishes to extend the warranty.
Do you need a motor warranty?
It is the owner’s choice to cover their vehicle under a motor warranty plan. Bear in mind that the breakdown of mechanical components and even electrical faults can be expensive to repair or replace. Consider the costs of overhauling your car engine, replacing the gearbox or repairing the transmission and differential. Without funds for the relevant repairs and replacement of parts, your vehicle may not be roadworthy or operational.
A motor warranty plan starts from a few hundred rands per month, depending on the make, model, age and mileage of the vehicle. While most plans over cover repairs and replacement to a certain limit, it can nevertheless be a financial lifeline in ensuring your vehicle stays on the road.
Third Party Motor Warranty Cover
The alternative to the manufacturer’s extend warranty is third party cover through a registered financial service provider. Most short term insurers offer motor warranty plans alongside car insurance. It is a separate policy and is usually limited to cars less than 15-20 years old, with a mileage less than 200,000-250,000 kilometres. These criteria varies among insurers. A full service history of the vehicle is usually necessary to qualify for motor warranty cover. Furthermore, ongoing vehicle services at recommended intervals is a requirement to maintain the cover.
The repairs or replacement of components will have to be done at an industry-approved workshop for the insurer to approve and pay claims. It is therefore important to understand the motor warranty policy and speak to the insurer about policy restrictions. Third party motor warranty plans may not be extensive as the original manufacturer’s motor warranty plan. However, it will give you the peace of mind in knowing that your vehicle has some degree of financial cover for mechanical breakdowns and electronic faults.