New car warranty comparison: What do you get from every manufacturer?
The Australian Competition and Consumer Commission (ACCC) defines manufacturer warranties as "voluntary promises offered by the manufacturer about what they will do if something goes wrong with a new car".
"Manufacturer warranties apply for a specified time and may add to consumers’ automatic rights under the Australian Consumer Law guarantees," the ACCC explains.
"Manufacturer warranties come with conditions that limit the coverage and what consumers can claim for."
NOTE: This story was first published April 19, 2020.
But while the basic principle may be the same across the board, what a warranty looks like can vary dramatically from brand to brand.
But while the basic principle may be the same across the board, what a warranty looks like can vary dramatically from brand to brand.
Generally speaking, manufacturers' warranties can range from three years or 100,000 kilometres of coverage (whichever comes first), up to seven years or unlimited kilometres.
Luxury brands tend to have shorter warranty periods, but a move from Mercedes-Benz to up its warranty period from three to five years has placed pressure on its peers to follow suit. Indeed, two days before this story was filed, Volvo did.
But, when it comes to warranties, there's no getting around the fact a little research may be required in order to confirm you're getting the best possible deal.
According to the 2016 Lemon Car Report by consumer advocacy publisher Choice, 66 per cent of new car buyers face problems with their new cars in the first five years of owning them – with 14 per cent of new car buyers facing what they'd classify as a major problem.
So, how long is long enough? And what kinds of things are covered?
For guidance, we turned to Graham Cooke, Insights Manager at financial comparison site Finder.com.au, for his take on some commonly asked questions.
What length of warranty should I be looking for at a minimum?
"Under consumer law it’s as long as you’d expect the product to last and you’d expect a car to run for 3-4 years without any extensive issues," Mr Cooke says.
Australia Consumer Law applies to vehicle purchases, just as it would any other goods or services. In addition to the manufacturer's warranty your vehicle must "be of acceptable quality (including that it is safe, durable and free from defects)" this protection extends "for an unspecified but reasonable time".
Like your new car warranty, ACL protection doesn't cover wear and tear, user damage, neglect, or scheduled replacement items. It can take time and effort on your behalf to pursue a claim, but the ACCC is able to offer advice if you think you may have an out-of-warranty claim.
What kinds of things should my car warranty cover?
Warranties typically cover any mechanical failures resulting from faulty or defective design or parts. Roadside assistance, towing costs or a loan car may also be covered if your car breaks down due to a warranty issue.
However, Mr Cooke says the key is checking if there are "payment limits" set in the warranty.
"There will be maximum payments covered on things that can go wrong," he says – adding that checking the fine print is always advisable. If towing or accommodation form part of a warranty offer there may be a cap on distance or a price cap for accommodation.
What doesn't my car warranty cover?
"Anything to do with human error will not be covered, wear and tear won’t be covered, and coverage may disappear if you drive over a certain distance," Mr Cooke explains, urging consumers to clarify these details with their manufacturer before committing to a car.
Mr Cooke says some issues outside of specified warranty coverage terms could instead be covered by insurance, contingent on what the issue is, and the terms of your warranty policy.
Can I void my warranty by skipping a scheduled service?
Mr Cooke says that in some cases, skipping scheduled servicing could put your warranty in doubt.
"In some cases that can be true. There’s a minimum level of care you have to demonstrate – you can just ask the dealer, most dealers will be happy to let you know the repercussions," he says.
Do used cars come with warranties too?
According to Mr Cooke, a longer warranty is "definitely something you sacrifice for the reduced price of used cars".
"They’ll typically have shorter warranties from dealers than new cars. Often they will come with the dealer warranty, not the manufacturer warranty."
When buying a used car from a dealer that's out of its manufacturer warranty period, you will receive a statutory warranty.
Typically, a statutory warranty is a three-month or 5000km (whichever comes first) warranty available if a car is less than 10 years old and hasn't travelled more than 120,000-160,000km.
The time period and criteria of the statutory warranty will vary from state to state, so contact your state's consumer body for more detailed information.
