Warranties On Cars – Good or Bad?
In today’s competitive and profit driven markets many consumers get turned off as soon as they hear the word ‘warranty’. Many factors have caused this over the years, including, price, quality of product, perceived value, difficulty claiming, and need of product and overall cover of the warranty.
Nowadays warranties get offered with just about anything you purchase, from a $5 kettle to a million dollar yacht. People have become weary and often see sales people as trying to squeeze anther buck out of them for something they do not really need. The truth of the matter is that warranties do add value and savings can be made by bundling them into your car finance package. Just ask somebody who has had a good warranty, resulting in a successful claim and they will testify to the savings they made. There will of course always be rogue companies out there, selling warranties purely to make more money, the secret is to read and understand before you sign on the dotted line.
Warranties on cars are also often confused with guaranties, with many consumers expecting a guarantee to be warranty and provide the same cover. The two are very different and take the time to ensure what is covered by what. Some car warranties are offered with products for free, others cost an arm and leg. There is no point taking a $10 warranty on a $5 kettle, but a warranty that saves you thousands on a broken car is a completely different kettle of fish (see what I did there…). Warranties act like medical aid cover for your product and only when the product breaks do you reap the savings. Same as when you have to use your medical aid, better to have cover than to suddenly have to come up with a few hundred or thousand dollars to repair or replace your car or other vital product.
In most cases the more electronics/moving parts a product has the more important a warranty should be, but many warranties on cars are not worth the paper they are printed on and have given the word ‘warranty’ a bad reputation. Read, understand and you will reap the benefits. A good quality warranty will be easy to understand and the salesperson selling it should be able to answer all your questions and concerns. Vehicle warranties are probably top of the list when it comes to must consider warranty cover. Some people might have the luxury of public transport and only be mildly inconvenienced if their car suddenly broke, but the majority of us could not get by without our cars and could get into serious debt to ensure our car stays on the road. A warranty here not only ensures cover but protects our bank balances.
Consumers often also perceive warranties as large brochures of legal jargon and small print that they do not bother to read and never really understand. Only when needed is it dug up to see what is covered and what conditions have to be met, if any, to ensure the validity of the warranty. In many cases this could be too late. Rather spend the time and read and understand terms upfront, any unrealistic conditions should sound alarm bells, and a good warranty will provide extra peace of mind. If you retain more information by talking than reading, your 360 car finance consultant will be able to help you understand what each level of warranty covers and help you toward making a clear decision.
The bottom line is that a good quality warranty will not only save you money when needed but more than pay for itself after a claim, and that can only be a GOOD thing.
As always, it is a good idea to seek financial advice by an accountant or financial adviser before choosing to take out a vehicle warranty.