How Much Can a Car Warranty Save You?

Paying a monthly fee for an extended car warranty feels expensive until you have to pay out a lump sum for a major repair.

Modern technology has this weird habit of failing about fifteen minutes after the warranty expires. Your phone battery may suddenly struggle to get out of bed in the morning or your kettle simply becomes an expensive watering can overnight. Because your car now comprises more circuit boards than whirring metal gears there's also plenty that can go wrong under the bonnet — likely at a time when it'll cost you to fix it, rather than the manufacturer.

Your car likely left the showroom floor with a warranty, and if you bought it 'pre-loved', you may have benefited from the balance of the cover. But in the event that you've seen the light and would like to keep your car beyond the two to six years that the manufacturer warrants against mechanical failures, you can compare quotes and take out an extended warranty.

What is a Motor Warranty?

Your car's warranty will cover a set list of components for repair or replacement, usually the 'big ones' like engine or gearbox components. If your toddler snaps a button off the dashboard playing the Max Verstappen game, you'll likely have to pay for it to be repaired or replaced yourself. And if you have an accident, your motor warranty won't cover the repairs — that's up to your Car Insurer.

The parts and systems generally covered by the warranty include general defects; engine, gearbox and transmission system; fuel and ignition systems; cooling system; the scary volume of electronics; steering and suspension; non-frictional clutch, and brake system parts. As with any warranty, terms and conditions apply, so if the dealership decides you've been colouring outside the lines, you could still end up paying for the replacement parts yourself.

Why Extend a Warranty?

You can take out an extended warranty once the manufacturer's one expires, either with a third party or with the manufacturer themselves, and there's also an option of buying a pre-owned vehicle warranty. If you opt for a third-party extended warranty, you'll pay monthly instalments, while the manufacturers generally want you to cough up a lump sum payment. It's up to you to decide whether you're more comfortable paying a few hundred rand a month or handing over a lump sum for additional peace of mind.

The extended and pre-owned warranties will specify the list of components that will be replaced or repaired under each policy — again, likely the big ones — and it's your call to decide on comparisons between costs and cover.

Realistically, it's a type of insurance policy against major mechanical breakdowns that come with a big price tag that you may not be able to cover out of your own pocket at the time. But it covers things your car insurance won't, which you can learn more about here.

Count the Cost

The most recent AA Kinsey Report from 2020 demonstrates some basic parts' costs to which you can add three years of inflation and eye-watering labour costs. The cam belt or timing chain on the Renault Kwid 1.0 Expression will set you back R1,800-ish. Not insurmountable, but it could hurt.

And if your Audi A4 decides to turn one of its four pistons into a pile of metal filings two weeks out of warranty, the dealership will hand you a quote for upwards of R100,000. Somewhere on Twitter, there's a VW Polo GTI for sale with an engine the previous owner trashed doing GTI things. It could be yours if you're willing to take on the R350,000 refit bill.

Be smart and cover your car against mechanical failures by comparing quotes and choosing a policy through Hippo.co.za.

This article is for informational purposes only and should not be construed as financial, legal or medical advice.