Self-funding your car repairs vs investing in a car warranty .

Time to read: 5 mins

Key Points 

• 39% of people in the UK have £1,000 or less in savings, and 23% have £200 or less 
• If you want to be ready for a big repair on a high value vehicle like a Range Rover, a BMW, an Audi A6 or a Mercedes, you’d need to save between £150 and £700 every month for a year to cover the worst-case complete engine failure. 
• A savings pot, while a good idea in theory, relies on consistent discipline and time. Unexpected car trouble can strike early, before enough has been saved.
• A warranty will cover unexpected repairs right away
• For expensive brands like Range Rover, Audi, Mercedes, and BMW, a warranty can definitely save you from huge surprise bills and help your budget with peace of mind. 
• A third-party warranty spreads the risk and usually costs much less than a month’s savings. 
• A warranty will offer quality repairs and genuine parts: Warranty repairs are typically carried out at reputable garages using genuine or approved parts, ensuring your car remains reliable and safe.
• In contrast, second hand parts may seem like a big saving but can be of unknown quality and may not last as long (negating any warranty you may still have), leading to repeated repairs. 
• Warranty covers more than just repairs: It can also help with breakdowns, car hire, and onward travel, and makes budgeting easier. 
• Having a valid warranty can increase your car’s resale value and make it more attractive to buyers, while a history of second hand repairs may not be accurate. 

Did you know that as many as 16% of UK adults (about 8.4 million people) have no savings at all? Getting a third-party car warranty can help protect you from big car repair bills, especially as car parts and labour costs keep rising.  

You may have seen comments where people have argued that it’s cheaper to create a savings pot for car repairs, but is it really? 

Opting for a third-party extended car warranty can offer more immediate financial protection than setting up a personal savings pot for repairs. A warranty covers costly, unexpected repairs right away, without requiring you to have saved thousands of pounds in advance. It can be especially beneficial for drivers with older vehicles or tight budgets, as even a single major repair—like a transmission replacement—can exceed the cost of the warranty itself.

Unlike a savings pot that takes time to build and may be insufficient when a breakdown occurs, a warranty ensures coverage from day one (after any short waiting period). Many warranties also include perks like roadside assistance, rental car reimbursement, and nationwide repair networks, adding further value. Additionally, some providers offer flexible payment plans, making coverage more accessible.

A savings pot, while a good idea in theory, relies on consistent discipline and time. Unexpected car trouble can strike early, before enough has been saved. A third-party warranty transfers that risk, offering peace of mind and financial predictability. Ultimately, for those who want to avoid large, surprise expenses and enjoy added convenience and services, a third-party extended warranty often proves to be the smarter, more secure choice.

What Would You Need to Save Monthly?

To cover the cost of a major repair yourself, check out the tables below to see how much you’d need to save approximately each month over a single year: 

Self-funding for a new engine

Imagine you own a Land Rover, Audi, Mercedes, or BMW, and your engine fails. You could buy a second hand engine but it will only have a short guarantee period (generally 3 months) and if anything goes wrong after this period you will need to pay for any repairs yourself.

To cover a new, fitted engine, you’d need to save between £166 and £708 every month, depending on your car. That’s a huge commitment! However, a comprehensive warranty for these cars’ costs just £52 to £75 per month. This means, instead of stressing about building a massive repair fund, you can pay a much smaller, predictable amount for a warranty and have peace of mind that major repairs are covered. It’s clear that a warranty is a smarter, more affordable way to protect your car.

Note: The cost per month needed to replace a gearbox will only cover the cost of replacing the gearbox. If there are any other mechanical or electrical issues, you will need to save more money. 

• Cost per Month: The amount you’d need to put aside every month for a whole year to cover a new engine replacement. 

• Avg. Warranty per Month: The typical monthly cost of a comprehensive third-party warranty.  

Self-funding for a new gearbox 

If your Land Rover, Audi, Mercedes, or BMW needs a new gearbox, you’d have to save between £83 and £333 every month to cover the potential repair bill. That’s a big financial burden for most drivers! In contrast, a typical warranty for these cars’ costs just £52 to £75 per month. With a warranty, you pay a predictable, much lower monthly fee and get peace of mind knowing expensive gearbox repairs are covered. 

Note: The cost per month needed to replace a gearbox will only cover the cost of replacing the gearbox. If there are any other mechanical or electrical issues, you will need to save more money. 

• Cost per Month: The amount you’d need to put aside every month for a whole year to cover a new gearbox replacement. 

• Avg. Warranty per Month: The typical monthly cost of a comprehensive third-party warranty. 

Self-funding for a new transmission 

If you own a Land Rover, Audi, Mercedes, or BMW, replacing a transmission could cost between £2,400 and £4,000. To prepare for this, you’d need to save £200 to £333 every month—an amount that can strain most budgets. In comparison, a comprehensive warranty for these vehicles’ costs just £52 to £75 per month. This makes a warranty a much smarter choice, offering predictable, affordable payments and peace of mind that expensive transmission repairs are covered. Instead of worrying about saving thousands, you can rely on your warranty to protect you from unexpected costs. 

Note: The amount saved per month needed to replace a transmission will only cover the cost of replacing the converter. If there are any other mechanical or electrical issues, you will need to save more money. 

• Cost per Month: The amount you’d need to put aside every month for a whole year to cover a new transmission. 

• Avg. Warranty per Month: The typical monthly cost of a comprehensive third-party warranty. 

Self-funding for a new Catalytic Converter

If your Land Rover, Audi, Mercedes, or BMW needs a new catalytic converter, you’d have to save between £24 and £60 each month to cover the potential cost. While this is less than saving for major engine or transmission repairs, it still adds up and can be unpredictable if other components fail. In comparison, a warranty costs just £52 to £75 per month and covers not only the catalytic converter but many other expensive repairs. This makes a warranty a smarter, more cost-effective choice, offering peace of mind and protection against a range of unexpected repair bills. 

Note: The amount saved per month needed to replace a catalytic converter will only cover the cost of replacing the converter. If there are any other mechanical or electrical issues, you will need to save more money. 

• Cost per Month: The amount you’d need to put aside every month for a whole year to cover a new catalytic converter. 

• Avg. Warranty per Month: The typical monthly cost of a comprehensive third-party warranty. 

Things to Remember

• Major repairs can cost thousands -sometimes more than the car’s value, especially for engines and transmissions. 
• Warranties can cost less than saving for a big repair: For example, a new Range Rover engine could cost up to £8,000, but a warranty might be £900 a year (about £75/month). 
• Warranty covers more than just repairs: It can also help with breakdowns, car hire, and onward travel, and makes budgeting easier 7. 
• Repair costs are rising: In 2024–2025, average repair bills have gone up 20%. 
• Having a valid warranty can increase your car’s resale value and make it more attractive to buyers, while a history of second hand repairs may not be accurate.
• The average monthly cost of warranty plans is based on the current cost for May 2025. 
• Tip: Always check what’s included in the warranty and compare providers for the best deal
• Note: the data for the published tables is taken from our own Warrantywise data and may vary depending on vehicle model, age and type.

Resources

• Do Warranties Impact the Value of your Car? – Motorway
• Protect your vehicle by taking out warranty insurance – Money
• Extended car warranty guide 2024 – What Car?
• How can warranties help you budget for unexpected repairs? – Warrantywise
• What is the average cost to repair a car? – Bumper
• Used car repair costs surge by 20% year on year – Motor Trade News
• The top 10 best selling manufacturers’ most expensive cars to fix – Car Dealer
• Least reliable cars revealed – including popular Audi, BMW and Tesla models – Car Wow
• Savings statistics: Average UK savings in 2025 – Analysis conducted by finder.com