Car warranties - Once in a lifetime?

Vauxhall has announced it will no longer be offering lifetime warranties on its vehicles – a move industry observers say could provoke a ‘domino effect’ and prompt other manufacturers to do away with long-term cover.
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Seven year scratched

Vauxhall is one of just two manufacturers currently offering a seven-year or 100,000 mile warranty on new vehicles. But it has decided to scrap the scheme, citing a rise in the number of cars being sold on finance deals as the reason. Almost two-thirds (65%) of new cars are now sold as part of a finance deal, such as hire purchase (HP) or personal contract purchase (PCP). Instead of paying a final payment to keep the car, many buyers prefer to get a new car at the end of the finance period and roll the agreement over for another three years. That negates the value of the long-term warranty, blunting the edge of its use as a marketing weapon. For a closer look at the types of finance deals available, check out Mark’s article Can you settle your car finance early? Kia is the only other manufacturer offering a seven-year, 100,000 mile warranty on all vehicles bought after January 2010 – this includes some 59-plated vehicles – but, unlike Vauxhall’s offering, this warranty is fully transferable and is valid regardless of the amount of owners the Kia has had during that 7-year/100,000-mile period. Below is a breakdown (!) of the longest manufacturer warranties currently on offer…

Replacement parts

You could find some of your car’s components are covered for longer than the traditional three-year period as several original equipment manufacturers (OEMs) will offer comprehensive cover for mechanical malfunctions for as long as 10 years. However, in some cases the warranty small print and loopholes renders such warranties all but redundant, and you could find you still have to pay for replacement parts as protection quickly tapers off. David Gerrans, managing director of Warranty Direct, a provider of direct consumer warranties, said: “In many ways, it’s a shame for car buyers, but the reality is that the cover was never actually sufficient. The small print in all these longer warranties contains a number of caveats that can greatly limit their effectiveness long before the policy elapses. He added: “Vauxhall’s decision is sure to make other car makers think twice – an exodus from the market is possible because, if the cover is less comprehensive than that of aftermarket providers, the customer is not the winner.”

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