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Cliff Chambers18 Sept 2012
ADVICE

Smart Buying: Comparing New Car Warranty

Getting the facts straight on a new car warranty can save you for years to come

SMART BUYING
COMPARING NEW CAR WARRANTY

It is more than 20 years since Subaru Australia fired the opening shot in a new-car warranty battle that has raged ever since. By upping the cover on its Liberty range from two years/50,000km to three years/100,000km, Subaru displayed confidence in its product that some other brands took more than a decade to match.

While a 12 month/20,000km ‘statutory’ warranty applies by regulation to all new cars sold in Australia, no manufacturer or importer would today dare offer such skimpy consumer protection. Three years is now the typical warranty period for mainstream passenger models, with a 100,000km distance limit. Since then some companies have chosen to offer optional extended warranties or simply not limit the distance travelled during the allotted warranty period.

WHAT YOUR WARRANTY COVERS
Manufacturers’ warranties are designed to protect consumers against loss due to components that fail within an unreasonable period of time, or defects in vehicle assembly. The carmaker agrees to replace or repair faulty parts at no cost to the vehicle owner and to also warrant the replacement part provided the owner complies with conditions detailed in the warranty document.

Parts that wear out in normal use including brake pads, clutch components and belts are not covered unless the fault occurs well before the reasonable life-span of the component.

Tyres, batteries, bulbs and accessories supplied with the vehicle are normally subject to shorter warranty periods. These are sually only covered against manufacturing defects.


WHAT YOU MUST DO

Meeting your obligations under the warranty conditions should not be too arduous but make sure you read and understand them fully. If anything is unclear, ask to speak with a dealership Service Advisor before making a final decision on which vehicle to buy.

New cars must be serviced at specified intervals by someone qualified to carry out that service and who will use lubricants and replacement parts that meet manufacturers’ specifications. This does not compel owners to have their cars serviced by a franchised dealer but the work must be carried out by a workshop qualified for the task.

The franchised dealer versus independent workshop is a difficult area. By letter of the law you can use any 'qualified' workshop to service the car and still be covered. In practice, failing to stay within the franchise dealer system can cause problems if a failure occurs.

Should you choose to service your new car outside of the normal franchised dealer system and the car company attributes the damage to something done, or not done, by an independent workshop, the manufacturer may not honour its warranty. Consider this when making a decision especially with new cars from prestige brands...

If your new car develops a new noise, leak or other indication of a problem you must immediately contact the dealer and arrange an inspection. If you ignore a small problem that results in a major failure the warranty may not be honoured. This potentially exposes you to a large repair bill.

EXTENDING THE WARRANTY
The benefits of a longer warranty period depend on a range of factors. If you plan on keeping the car for at least five years and the standard warranty does not stretch that far it may be worthwhile.

Extended warranties are often provided by an insurance organisation, not the manufacturer. Although not technically an insurance product they are still subject to a Product Disclosure Statement which needs to be read carefully and understood before the offer is accepted.

Owner obligations may be different to those that apply under a standard warranty and may not be transferable should you sell the car.

ROADSIDE ASSISTANCE PACKAGES
Manufacturer Roadside Assistance program are often provided by motoring organisations like NRMA or the RACV. Many new car brands offer these services free of charge – for a period.  

If you are asked to buy such a service consider all options. It may be cheaper or more beneficial for an owner to reject a manufacturer or dealer’s assistance package and arrange their own.

Some offer a range of benefits not related to the vehicle including travel and insurance assistance and even medical advice. Read the dealer-supplied brochure to see which package, if any, fits your needs.

WHICH NEW CAR WARRANTY IS BEST?
Choosing the ‘best’ new car warranty is a tough task and very much dependent on individual buyer needs and use patterns.

A warranty that delivers five years’ cover with a kilometre restriction may be best for someone who will not travel anywhere near 30,000 kilometres annually. People who drive bigger distances or switch vehicles every two or three years may be better served by a Three Year/Unlimited Kilometre warranty.

Interestingly, it is a couple of brands that operate at the lower end of the market – Hyundai and Kia – that currently offer the longest warranty periods (five years with no kilometre limit). Mitsubishi joins the Korean brands in providing five years’ cover but with a 130,000 kilometre limit.

Below and covering those brands that sold more than 5000 passenger cars in Australia during 2011 is a summary the basic warranty terms and benefits. The summary is correct as of September 2012. For full details, contact a franchised dealer for your preferred brand.

Audi
Three Year/Unlimited Kilometres with one-year extension available. Roadside Assistance is included. Audi was a pioneer of body galvanising and offers a 12 Year warranty against body corrosion.

BMW
Three Year/Unlimited Kilometres including Roadside Assistance. Matches Audi’s 12 Year Rust Perforation warranty.

Ford
Three Year/100,000km with Corrosion Perforation cover for five years. Warranty can be extended, subject to conditions, by up to three years and 100,000km.

Holden
Three Year/100,000km with a 12 Month extension available. Roadside Assistance is included for the first 12 months and can be upgraded to provide more comprehensive help.

Honda
Three Year/100,000km with the option of extending to Five Year/140,000km. Roadside Assistance included. Six Year Perforation cover applies to body panels.

Hyundai
Five Year/Unlimited Kilometres. Limit for commercial-use vehicles is 160,000km with some occupations limited to 130,000km.

Kia
Five Year/Unlimited Kilometres with 12 months Roadside Assistance. The Assistance package can be extended at no cost providing the car has been serviced at an authorised Kia dealership or service centre.

Mazda
Three Year/100,000km on passenger models, Two Years/Unlimited Kilometres for Commercial models. Two levels of Roadside Assistance are available for an annual fee.

Mercedes-Benz
Three Year/Unlimited Kilometre Owner Protection Plan. Details are available by contacting an M-B dealer.

Mitsubishi
Three Year/130,000 kilometres with extension available to Five Years/150,000. Includes a five year Corrosion warranty. Mitsubishi also offers a 10 Year/160,000km Powertrain warranty but this remains valid only while the original buyer retains the car.

Nissan
Three Year/100,000km with Extra Time (12-36 months) or ExtraDrive (up to 150,000 kilometres) extensions available on all passenger models except the GT-R. Roadside Assistance is available for the entire applicable warranty period.

Subaru
Three Year/Unlimited Kilometres, except for some use categories that are limited to 100,000km. Two levels of Roadside assistance are available for an annual fee. The Rust Perforation warranty applies for five years, regardless of kilometres travelled.

Suzuki
Three Year/100,000km.

Toyota
Three Year/100,000km. Warranty on passenger models can be extended by up to three years and 50,000km. The batteries fitted to Prius models are warranted for eight years or 160,000kms. Basic or ‘Plus Plan’ roadside assistance is available.

Volkswagen
Three Year/Unlimited Kilometres. A 12 Year corrosion warranty applies to the body structure, except on Amarok models which are covered for six years. Volkswagen also offers a three-year warranty on original-equipment accessories.

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Written byCliff Chambers
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