Car Warranties - How Do They Work?

Posted on: Jan 23, 2023 | 3 mins | Written by: HDFC ERGO Team

Car Warranties - How Do They Work?

Car warranties work as promises from the car manufacturer regarding the reliability of its components. This warranty, like the kind you get for electrical appliances, ensures that any issue (covered by the warranty terms and conditions) is taken care of by the manufacturer without you having to incur expenses. How this differs from third-party car insurance or comprehensive insurance is that it is the car manufacturer that is held responsible for the fulfilment of any issues, and that there is no premium that you need to pay for it. However, it doesn’t mean that you can give third party car insurance a miss. It is legally mandatory.

What is a car warranty?

It is a written and binding promise from the car manufacturer that says that it will take care of any faults that occur to components covered under warranty, during the specified period of coverage. It’s strongly advised to read your warranty document to understand what is included in the car’s warranty and what is not.

What is included in a car warranty?

A car warranty usually covers components that directly affect safety, reliability and road-worthiness. Car warranties can be offered by the manufacturer, dealer, or a third-party (for extended warranty). You also have the option of purchasing a used-car warranty from an authorised dealer.

What a car warranty does not cover, much like comprehensive car insurance, is normal wear and tear, and cosmetic damage. Inclusions:

- Repair of any defect within a specified period

- New car warranty lasting up to a specified driving range or time

- Car servicing, by authorised service centres, where genuine parts are used

- Roadside assistance for a specified period or driving range

- Powertrain, electrical component and accessories, paint and corrosion damage may be covered depending on the manufacturer and vehicle

Exclusions

- Normal wear and tear

- Accidental damage

- Misuse of the vehicle

- Modification of the vehicle

- Routine service and maintenance

What are the types of car warranties?

1. New car warranty

New cars are covered by the manufacturer. They are usually offered a warranty of up to 5 or 7 years, or 1,00,000 kilometres

- whichever comes first. Some brands also offer unlimited kilometre warranty, which may be transferrable to the new owner if you sell the vehicle.

2. Used car warranty

Sold by dealers, it is a warranty for used cars. Buying second-hand cars can be hit-or-miss for most consumers. It’s recommended to buy used cars from reputed dealers that also offer warranty as a sign of trust and quality.

3. Extended warranty

Extended warranties can be offered by manufacturers, dealers, or a third-party entity on top of the existing warranty. As the name suggests, it is an extension of the warranty – either in terms of time or kilometres. An extended warranty is ideal when bought at the time of buying a new car (as it’s cheaper), and if you intend to hold on to the car for that extended period.

Problems with warranty claims?

Firstly, let’s understand who is responsible for fixing a specific fault. Go through the warranty document carefully to understand if the dealer will fix the problem or if you need to reach out to the manufacturer. Or if it’s a third-party warranty, reach out to the agency to find out the next steps. You will, in all probability, be routed to a service garage. If the warranty period has expired, then the service department is not legally obligated to repair the fault without charging you for it. If you’ve bought a warranty from a dealer, then reach out to the dealership and maintain goodwill, to ensure your work gets done. Sometimes, if you maintain a good relationship with the dealer, you could get your problem fixed even if it’s outside the scope of warranty, at a fraction of the cost.

Take a look at this informative article on Differences Between Car Insurance and Warranty.

Conclusion

All said and done, it’s important to thoroughly go through the warranty document and understand the terms and conditions. Just like third-party car insurance or comprehensive car insurance, the devil is in the details of your warranty document. Each manufacturer has their own set of perks, and that can change at the vehicular level, even right down to variants.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

Car Insurance Background Checks: All You Need to Know

Back to Basics: Exclusion in Your Car's Warranty

Factors that Affect Your Car Insurance Premium

Car Insurance: Why Age and Gender Matters?

The Top Tips to Reduce Your Car Insurance Costs