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How does a car warranty work?

Whether you buy a new or used car, a car warranty can cover the cost of repairs if your vehicle develops mechanical faults. Find out more about how car warranties work with the help of our guide.

Whether you buy a new or used car, a car warranty can cover the cost of repairs if your vehicle develops mechanical faults. Find out more about how car warranties work with the help of our guide.

Written by
Kate Hughes
Insurance expert
Last Updated
10 FEBRUARY 2023
8 min read
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What’s a car warranty?

A car warranty is a type of insurance that covers the cost of parts and labour if there’s a mechanical or electrical fault with your car during an agreed timeframe. A warranty won’t last forever – most last three years, depending on the manufacturer or dealer. And you’ll need to make sure you maintain your car in line with the terms and conditions. If you don’t, you may find your claim is rejected.

Depending on where you buy your car, you can get a warranty from the manufacturer or retailer. If one isn’t supplied or you want to extend the warranty, you can also buy one from a third-party dealer or insurance provider.

Whether you buy a warranty is up to you – unlike car insurance, a warranty isn’t a legal requirement.

What does a warranty on a car cover?

What your car warranty covers will vary, depending on the car and manufacturer. You’ll need to read the policy to see which repairs are covered.

Most car warranties cover the cost of repairing mechanical or electrical faults in the:

  • Engine
  • Transmission system
  • Steering
  • Suspension
  • Clutch
  • Brake system
  • Gearbox
  • Electrics
  • Air-conditioning system.

Watch out for small print – some parts may be covered for longer than others. For example, although Kia has a seven-year warranty, the battery is only covered for two.

What doesn’t a car warranty cover?

Don’t assume your car warranty will cover every fault. Depending on the warranty, you may find the following are excluded:

  • Wear and tear 
  • Accidental damage (your car insurance should cover this)
  • Vandalism (again, this is what your insurance is for)

Most warranties require you to take ‘reasonable care’ of your car. You could also invalidate your agreement if your car isn’t serviced regularly – and you’ll be expected to use approved garages. Any modifications to your car could invalidate your warranty, so check before you add that super-sized spoiler.

What are the main types of car warranty?

You may come across a few different types of warranty. The main ones are:

New warranty - all new cars have a manufacturer’s warranty that’s valid for three to seven years.

Used car warranty - if you’re buying a used car that’s still in warranty, it’ll still be valid. And if it isn’t in warranty, the dealer may offer their own one to give you confidence to buy the car. You also have the option of buying a used car warranty.

Extended warranty - if you’d like longer cover, you may have the option to buy an extended warranty when yours is due to expire.

Where can I buy a car warranty?

A new car will come with a manufacturer’s warranty as standard.

If you’re buying a used car from an independent dealer or garage, you can choose to buy an independent warranty. These are sold by retailers and car warranty companies. They’re also known as aftermarket or extended warranties and it’s completely up to you whether you buy one. If you do, check all the terms and conditions of the warranty, because they can be far less comprehensive than official manufacturer’s warranties.

How much does a car warranty cost?

This depends on your car’s:

  • Mileage 
  • Make and model
  • Age

Warranties for more expensive or older cars are likely to cost more.  

The price of your warranty may also depend on the level of cover you want and how long you want the warranty to last.

Don’t feel obliged to go with the manufacturer or dealer warranty as you may get a better price elsewhere. Always do some car warranty comparisons to make sure you’re getting the right deal.

Can you get a warranty on a used car?

If you’re buying a used car from an official dealer, you might get a used car warranty as part of the deal. Used car warranties are usually much shorter than the manufacturer’s warranty, typically only lasting between a few months and a year.

As part of their own ‘approved used car’ schemes, most franchised dealers typically offer a 12-month warranty. You may need to have your car serviced at the dealership you bought it from, or a franchise, for that warranty to apply.

Some second-hand dealers may also offer three, six or 12-month warranties as an incentive.

Will I have a car warranty if I buy from a private seller?

It’s possible to buy an aftermarket, third-party used car warranty for cars up to 12 years old. However, they do tend to have more exclusions than a manufacturer’s warranty and, as a general rule, the older the car, the higher the premiums.

Read our advice on buying a used car.

What else should I look for when buying a car warranty?

As with any financial agreement, it’s important to check and understand the small print in your warranty. Here are some phrases you might come across and what they mean:

  • Betterment
    If your car ends up getting a part that’s better than the one it’s replacing, you may be expected to pay for it, or contribute to the cost.
  • Consequential
    This is when a part that’s insured fails because of the failure of another (uninsured) part. Ideally, you want a warranty that will cover you for consequential damage, otherwise you’ll be expected to pay for some or all of the part that needs replacing.
  • Garage
    Some policies and insurance providers have a list of ‘approved garages’ that you’ll need to use, otherwise you’ll face paying towards labour costs.
  • Labour rate
    This is the garage’s hourly rate and how much of it your warranty provider will pay.
  • Excess
    An excess is the amount you’ll need to pay towards repairs when you claim. The insurance provider covers the rest.
  • Insured vs uninsured warranties
    Insured car warranties are regulated by the Financial Conduct Authority (FCA) and are members of the Financial Services Compensation Scheme (FSCS). This means if your warranty provider goes out of business, your warranty and car are still protected. Uninsured car warranties are not regulated in the same way, which may mean they’re a greater risk.

Can my car warranty claim be rejected?

Yes. There’s a few reasons your car warranty claim could be rejected. Here are some examples:

  • You’ve neglected the car – if the car isn’t properly maintained and serviced, or hasn’t had its MOT, this will likely break the terms of your warranty, which means you won’t be covered. You may also be penalised for using the wrong fuel, or continuing to drive with a warning light or known fault.
  • You’ve used your car improperly – if there’s evidence that you’ve been using the car inappropriately (for example, taking it off-road when it’s not designed for this), then you might find you’re not covered.
  • The parts aren’t covered – depending on your warranty, you may find that certain parts aren’t covered. Manufacturer’s warranties tend to offer the best coverage. Take extra care when buying an aftermarket warranty from a used-car dealer.
  • You’ve modified the car – if you’ve made modifications to the car after taking out the warranty, this may cause an issue. If the modifications led to the issue you’re claiming for, your claim will probably be rejected
  • Natural disasters – if you’re claiming for damages relating to flooding or other natural disasters, you probably won’t be covered.

Is it worth having a car warranty?

Warranties can provide peace of mind, but some are more useful than others. Cheaper warranties may have a lot of exclusions, but a comprehensive warranty may be more expensive.

Some warranties also include breakdown cover, so you might want to factor this in when it comes to totting up the cost of buying a car with or without a warranty.

You also need to weigh up the price of the warranty against the cost of repairs. It might work out cheaper to simply pay out if the car breaks down.

What other protection do I have if my car is faulty?

If you buy a car – new or used – from a recognised dealer, you’re protected under the UK Consumer Rights Act 2015. This applies for six months, regardless of the warranty.

The law states that the car must be of satisfactory quality, fit for purpose, and as described. It also means:

  • You have 30 days to claim a full refund, repair, or replacement
  • If a fault emerges between 30 days and six months, you can get a partial refund, repair, or replacement.
  • After six months, it’s up to you to prove the car was faulty when you bought it 

For up to six years after purchase (or five in Scotland), you can take legal action for breaches of the Consumer Right Act. Just be sure it’s worth pursuing.

How can I find the best car warranty?

If you’re looking for the best car warranty, be clear about what this means and do your research before signing any paperwork. The best car warranty for you may not be the best for someone else. Decide whether you want to prioritise price, cover level, or warranty length.

Do I need car insurance if I have a warranty?

Yes – if you’re driving on UK public roads, you’re legally required to have car insurance, no matter how good your warranty is. Plus, a warranty only protects you if the car develops a mechanical fault. Car insurance can cover you for theft, accidental damage and more depending on the policy you choose.

Comparing car insurance quotes with us only takes a few minutes and could save you up to £374[1] on your premium.

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[1] Based on Online independent research by Consumer Intelligence during November 2022. 51% of customers could achieve this saving on their car insurance through Comparethemarket.

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