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Car Warranty Insurance: Is it a good deal?

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Car warranty insurance might feel like just another additional expense, but running the family car can be an expensive business, with fuel, tax, insurance, servicing and repairs. We’ve come to rely on them for day to day life, so if they suddenly need repairing it can be a costly and inconvenient exercise. Warranty insurance is available which can cover the cost of repairs, but is it worth it?

 What is car warranty insurance?

When you buy a new or used car from a dealer, it usually comes with a warranty. However, these aren’t always extensive policies and might not cover all mechanical and electrical repairs. If you buy your used car in a private sale there won’t be any warranty. Car warranty insurance can be taken out from a specialist provider. Your monthly premium will cover you for parts and labour if your car breaks down. The types of repairs that are covered will vary between providers, so it’s worth checking the small print.

 What are the benefits of car warranty insurance?

The main advantage of taking out warranty insurance is the peace of mind it provides you. With many families working to tight monthly budgets, it can be hard to find the extra money should your car need an urgent repair. You could be without your vehicle for a long period of time, which could cause problems if you use it to get to work or for after school activities. By taking out a car warranty you’re able to budget better and know exactly how much you’re paying every month.

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You can often get a better deal on warranty insurance from a specialist provider, rather than through the dealer. With used car warranties, there’s usually a cost associated with them and you don’t have to take out the one the dealer offers. Before you sign anything, do some research and see if you could get a more comprehensive or cheaper policy from a third party. You need to consider exactly what’s covered by the policy, rather than just the cost involved.

Are there any risks with warranty insurance?

There is the possibility that you’ll never need to claim on your warranty insurance. However, this is the same with any type of insurance policy, such as car or home insurance, and you’d never consider not taking out these policies.

When you’re deciding if it’s worth buying an insurance policy, you need to consider the age and mileage of the car. Older cars and those with high mileage will be more expensive to cover. Therefore, you need to calculate the cost of replacing the car and whether you’ll end up paying out more than this in insurance. It might be better value to set up a savings account to use in the event of a breakdown.

When you’re researching policies, you need to look at exactly what’s involved. Some policies cover all electrical and mechanical problems, as well as wear and tear repairs and manufacturers defects. However, some will have exclusions. Make sure that you check the claim limits, so you’re not hit if the repair’s costly. A policy with a limit of up to £5,000 or the cost to replace the car is the best option. There may also be stipulations regarding the service history of the car, so make sure you keep these up to date otherwise it could invalidate the policy.

As with all insurance polices, you hope you’ll never need to use them. However for those unforeseen eventualities, a warranty insurance will provide you with peace of mind and the help when you need it.



About Catherine Stern

About Catherine Stern

Catherine Stern is a freelance writer with a background in marketing and PR. She currently writes web content on a range of subjects, from finance and business to travel and home improvements. As a working single mum of two young boys she understands the pressures that today’s working parents face and the topics they want to read about.

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