Every new vehicle comes with a manufacturer warranty as standard which is valid from three to seven years (depending on the manufacturer).

This warranty is transferable to the next owner if it is still within the mileage and yearly limit. However, as soon as those conditions are surpassed, it is no longer valid.

A vast majority of used cars don't come with a warranty, so it can be worthwhile to purchase an extended warranty.

WHAT IS AN EXTENDED WARRANTY?

An extended warranty can be thought of as a form of insurance policy that covers you for repair costs after the manufacturer's or retailer's guarantee has expired.

For your car, there are three types of extended warranty available:

  • Manufacturer's Own Extended Warranty
  • Independent Provider's Extended Warranty
  • Used Car Dealer's Extended Warranty

WHAT DOES AN EXTENDED WARRANTY COVER?

The level of cover provided by an extended warranty varies by provider. You need to be careful and read the small print of any warranty agreement to see what will be covered.

A good extended warranty should protect you against the unexpected failure of certain large components, such as the engine. Parts that are typically covered include the engine, transmission, electrics, steering and suspension.

Some providers will have varying levels of cover for you to choose from so you can determine the items that you want to protect.

Before you commit to any extended warranty, you should decide what you need and read the policy information until you fully understand it.

KEEPING THE WARRANTY VALID

Once you've bought an extended warranty, you need to hold up your end of the deal and stick to the terms and conditions set out in the agreement.

Normally this means keeping to the warranty provider's service and maintenance schedule and not modifying the car.

You should check the policy for any stipulations regarding where the vehicle is serviced. Some can specify that the work has to be completed by a franchised dealership.

KEY TERMS AND PHRASES

There are three key phrases that you need to understand and be wary of:

Betterment refers to a scenario in which a repair or new part increases the value of your vehicle. If your extended warranty doesn’t allow for this, you could be facing a bill for thousands of pounds, especially if it's for a major component such as an engine.

Consequential failure, also known as consequential damage or consequential loss, refers to the damage a failed item can cause to other components. Some providers will make you pay for repairing the parts not covered by the warranty, so it’s in your interests to have it.

Wear and tear refers to the natural and inevitable depreciation of parts caused by normal usage or aging. It is advisable to choose a policy that includes a wear and tear clause and to understand what level of cover you have.

IS AN EXTENDED WARRANTY WORTH IT?

This is the ultimate question and the answer depends on the type of extended warranty you choose and what it covers (or doesn't cover).

Opting for the cheapest option on the market probably isn't worth the paper it's written on if something major goes wrong with your car.

However, at the top end of the scale, Warrantywise covers consequential damage to other parts of your car and has a labour limit of £200 per hour, so you could take it to a franchised dealer.

Research from Which.co.uk found that even the cheapest warranty was over £100 more expensive than the average repair costs. These figures suggest that you would be better off putting money aside and swallowing the repair costs if and when they arrive.

However, if your car needs work multiple times within a few months, you might not have the money available to cover all the costs.

Therefore, if you have a decent amount of disposable income, you're most likely better off without an extended warranty.

On the other hand, having the safety net of an extended warranty to cover the costs of repair work can save you money in the long run.

Here at 4Front, we supply a three month warranty for most of the vehicles we sell. We're also an appointed representative for Autoguard Warranties Ltd who are authorised and regulated by the Financial Conduct Authority (FCA)