THE UK CAR WARRANTY COMPANY WITH THREE LEVELS OF COVER!
Warranty Comparison Is Easier When You Know What To Look For. In The UK Automotive Warranties Come In Three Forms:
Which car warranty is best for you?
These warranties are supplied by the manufacturer with a brand new car. New car warranties run for a certain period of time or until a certain mileage is reached - one year or 12,000 miles, two years or 24,000 miles, three years or 36,000 miles and so on.
It is usually possible to extend the manufacturer's warranty. Whilst this is worth considering they're not cheap so it's worth obtaining some alternative quotes.
A warranty is not a substitute for your legal rights, it adds to them. The fact is that in law if the car develops a fault in the first six months, it's usually assumed the fault was there when you bought it. If this is the case, then it's your right to ask the dealer to repair the car free of charge or even replace it.
New-car warranties should mean you can look forward to worry-free motoring during the term of cover
or until the maximum mileage is reached; be aware it's usually the sooner of the two. So if you have a three year warranty, but cover 36,000 miles in one year - time up!
Of course, the cover afforded by new car warranties varies wildly, plus there is always the dreaded small print. For example, although some manufacturers cover
wear and tear on items such as batteries and exhausts, most will exclude wear and tear on other items such as tyres, exhausts, clutch plates, brake discs and brake pads.
Typically though, the cost of repairs as a result of mechanical breakdown will be covered by the manufacturer's warranty if there are faults with your car's engine, gearbox, fuel and ignition, electrical systems, steering, cooling and non-frictional brake and clutch parts.
Nestled away in the small print there will be other exclusions. There's little chance of the warranty covering damage caused by misuse - or what the dealer deems to be misuse! Unlike cars supplied in the UK, cars imported from Europe are likely to only have two years of warranty protection. In either case, if your car is involved in an accident, component failure may not be covered.
Servicing is another one to watch out for. The manufacturer is keen to encourage you to have your car serviced by an approved repairer and may not cover repairs if you have used your own independent garage - even if they use manufacturer - original or approved equivalent parts. They may also take issue if you haven't serviced the car at the right intervals. Usually they will give between 500 and 1000 miles over the mileage or 30 days over the due date.
Despite the small print and exclusions, new car warranties in the UK generally do provide a comprehensive level of protection against unforeseen mechanical breakdown.
Mechanical Breakdown Insurance (MBI)
This is a Mechanical Breakdown Insurance, and has the benefit of being underwritten by an insurance company. It's an agreement that the insurance company will indemnify the policyholder against the cost of repairs for insured components.
The original supplying dealer may provide quotes to extend the original warranty, but typically these are purchased either when the manufacturer's warranty expires, when purchasing a used car or extending an expiring car warranty.
When you're looking for an affordable used car warranty, there are many advantages to purchasing one that is insurance backed.
In 2005 the Financial Services Authority (FSA) started to regulate the selling and administration of contracts of insurance in the UK. Therefore, if the warranty is insurance backed, then the provider, broker or online supplier must be authorised by the Financial Services Authority (FSA), even if all they are doing is providing quotes! If they aren't then they're breaking the law.
It's neither quick, easy or cheap for a firm to be regulated by the FSA; they will have invested both time and money. They will have to provide reporting to the FSA on a regular basis about their products and as importantly any complaints against them. So, if a firm is regulated by the FSA, it's fair to say an assumption can be made as to their credibility and solvency.
Also, insurance backed warranties benefit from the protection of the Financial Services Compensation Scheme (FSCS). The Financial Services Compensation Scheme is a "statutory fund of last resort" in the UK, set up under the Financial Services and Markets Act 2000 to compensate customers of "authorised financial services firms" in the event of their insolvency. It consolidated previous compensation schemes into one combined scheme. In plain English, this means that even if the insurer was to go bust, you can recover part or all of your loss from the FSCS.
Like the manufacturer's warranty, there will be small print, quotes and warranties vary widely, however another benefit of an insured warranty in the UK is The Association of British Insurers lays down guidelines on how companies sell warranties. So if you make sure you buy an insured warranty they will have abide to the ABI code. Visit the ABI at abi.org.uk
Well, so much for the benefits of being insurance backed, you also need to decide how comprehensive you need the warranty be and check out exactly what it covers. Unless you opt for a cheap car warranty, major mechanical items such as the engine, ignition, electrical system, gearbox, steering and suspension are usually insured against failure.
Click4Warranty only provide affordable insurance backed warranties and we pride ourselves on clear and transparent terms. One policy with three levels of cover to choose from. We do cover wear and tear
, we don't insist on your car being serviced in accordance with the manufacturers specification - in fact when you take out the policy you don't even have to have a service history - just have a simple 5 point check carried out within 21 days or 500 miles. And cover starts day one.
When buying a policy from Click4Warranty, you are buying directly from the insurer; not an IT company, broker or advertising firm.
If you are considering purchasing a warranty, we provide fast, affordable and informative car warranty quotes.
Obligor Warranty / Guarantee
This is just an agreement between the provider of the uninsured warranty and the buyer. Whilst it's often referred to by the supplier as a warranty, which is unfair and confusing to the consumer, there are major differences.
The Financial Services Authority (FSA) regulate warranties when they are insurance, and it is illegal to sell insurance without being regulated by them, but an uninsured warranty is not regulated by them: The FSA published the following...
"Some firms, such as car dealerships, offer their own warranties to cover
repairs or mechanical faults as part of the sale of the goods. This includes car dealers who offer additional warranties to extend manufacturers' guarantees on new cars, or mechanical guarantees on used vehicles. We (the FSA) have concluded that contracts of this kind are unlikely to be insurance. This is because the warranty is a consequence of the contract of sale, under which the substance of the provider's obligation is the sale of goods that meet the required (often statutory) quality standard, not the provision of insurance. In this situation, the warranty does not involve a transfer of risk, but a recognition (and crystallisation) of an existing responsibility."
If you buy an insurance warranty, then it will be regulated by the FSA, which means that if you are not happy you have the option to complain to the Financial Ombudsman who will review the complaint and, if it deems correct, insist the provider honours the claim. In the unlikely event the insurer cannot pay out, you will be covered by the Financial Services Compensation Scheme.
So if you are buying a warranty an insurance warranty makes sense.
If the warranty is uninsured, no matter how credible the company may seem, if the seller chooses not to pay out, or if they go out of business, you have little recourse.
An example of this is UK warranty provider Motorcare Elite going bankrupt, their warranties were uninsured. Whilst the Financial Services Authority (FSA) have published information on their website explaining what customers of Motorcare Elite should do if they have taken out a policy with the firm, it has no sway over resolving unpaid claims because the "warranty" was uninsured. This has once again raised the importance of ensuring you thoroughly check that any extended policy you take out is fully insured.
If the warranty is not insured the potential problems aren't just isolated to whether a claim is settled or not, although that obviously is a major concern, it is also a concern as to why the company avoided being regulated by the FSA.
THE BENEFITS OF A CAR WARRANTY.
Having a car that won't let you down is important to almost every motorist, and two things affect your view of reliability, how often it needs repairing, and how much it will cost you to put right. A car could break down five times, but be repaired conveniently, quickly and the cost be covered by a warranty. Alternatively it could break down once and set you back thousands of pounds. That's the risk - without a car warranty that risk, and the associated expense, rest with you.
In short, a car warranty provides peace of mind. The average used car has thousands of components and even the most prestigious cars in the UK breakdown from time to time.
Without a warranty, any cost associated with mechanical or electrical failure - will be down to you! However, choosing to invest in the protection of a car warranty means you are insured for the cost of mechanical and electrical repairs covered by the policy
Many used cars being offered for sale are unlikely to still benefit from the original manufacturer's warranty; therefore car dealers include extended car warranty insurance to increase their chance of selling the car.
Unfortunately though, to keep overheads down, these policies are generally very short and may have major restrictions. Although it has to be said that a used car from a manufacturer's approved used scheme is likely to include a more comprehensive warranty than those offered by independent dealers in the UK. This is because manufacturers want to protect their brand and therefore have a vested interest; a used car with a bad warranty could damage their reputation.
So for the majority of car owners, it is left to the consumer to obtain quotes and source an affordable and suitable level of cover that genuinely offers protection against the cost of mechanical breakdown.
WHAT LEVEL OF WARRANTY COVER AND WHERE TO FIND IT
In the UK, the internet now provides the consumer with an array of providers and level of cover. Whilst there are cheap car warranties it is better to take your time and seek out affordable car warranty quotes that offer the level of protection you need.
Fortunately, in the UK there are many insured warranties available and you don't have to pay the high premiums demanded by the dealer, you can research the cover and cost online.
Look for companies that are regulated by the Financial Services Authority (FSA), where the policy terms are readily available. If it's simple to get a quote then they're in the business of selling warranties. If you're expected to supply your address, motor insurance expiry, etc. then it's likely you're on a site selling data to third party UK marketing companies - steer clear.
Where possible try to buy directly from the insurer rather than an "affiliate" or "administrator". If the quote is cheap ask yourself why. How comprehensive and reliable can a warranty be if the quote is really cheap? Just ask yourself, would you offer to pay for any repairs, parts and labour, for a full year in return for £90?? Unlikely.
When you're considering the purchase of a car warranty, there are a handful of factors that really matter. Here's a useful good check list to follow when searching for a car warranty
- Insurance backed
- The supplying firm is regulated by the FSA
- Clear policy terms
- Comprehensive list of insured components
- Claims handled over the phone
- Reputable list of UK nationwide repairers
- Day one cover
- Wear and tear included
- Transferable to a new owner
Try to avoid ambiguous statements like "all mechanical and electrical components"
We prefer to provide a clear, comprehensive list of insured parts. With Click4Warranty you don't need to study an exclusions list to work out what the warranty won't pay for. Our extended car warranty and used car warranty quotes are readily available, affordable and we don't pass on your details to any third party.