Why Should You Choose an Extended Used Car Warranty Over a Dealership Extended Warranty? .

time to read: 7 mins

• Used car warranties are independent service contracts that begin after the manufacturer’s warranty ends, covering mechanical and electrical failures.
• Cost-effective and flexible: Third-party warranties usually have lower premiums and offer customisable payment plans compared to dealership warranties.
• Customisable coverage: You can tailor your warranty to cover specific parts and choose from various protection levels.
• Comprehensive protection: Many plans include coverage for major components, wear and tear, roadside assistance, and courtesy cars.
• Repair flexibility: Third-party warranties let you use any approved VAT-registered garage, not just dealership service centres.
• Transparent terms: Independent providers often have clearer, easier-to-understand terms and better customer trust.
• Extra benefits: Features like roadside help, replacement cars, and transferable plans add value.
• Dealership warranties drawbacks: They often have shorter durations, limited coverage, complex terms, repair restrictions, and may cost more.

While dealerships offer extended warranties when a new or used car comes out of its initial warranty period, used car warranty providers present an increasingly popular alternative. Here are some of the advantages of choosing a used car warranty over an extended warranty from the dealership. 

What is a used car warranty? 

A used car warranty, often referred to as an extended warranty or aftermarket warranty, is a service contract provided by an independent company rather than a dealership or manufacturer. These warranties typically begin after the manufacturer’s warranty expires and are designed to cover repair costs for mechanical and electrical failures. You can find out much more about car warranties with this car warranty FAQS 

The pros of extended used car warranties 

1. Cost-Effectiveness 

One of the most compelling reasons to opt for a used car warranty is its affordability. Dealership warranties often come with higher price tags due to their overhead costs and profit margins. In contrast, extended car warranty providers can offer competitive pricing without compromising coverage quality. For example: 

• Lower Premiums: Extended and used car warranties are generally priced lower than dealership options, making them budget-friendly for most car owners. 

• Customisable Payment Plans: Many extended and used car warranty providers allow customers to choose between upfront payments or monthly instalments, offering financial flexibility.  

2. Flexible Coverage Options 

Extended and used car warranties excel in offering tailored plans that suit individual needs: 

• Customisable Plans: Unlike dealership warranties that may have rigid terms, extended and used car warranty providers allow you to select specific components and services to include in your plan. 

• Wide Range of Protection Levels: From basic coverage for essential components to comprehensive plans covering advanced systems, you can choose the level of protection that aligns with your vehicle’s age and condition. 

3. Comprehensive Coverage 

Third-party warranties often provide broader protection compared to dealership offerings: 

• Mechanical and Electrical Components: Coverage typically includes critical parts such as the engine, gearbox, brakes, and steering systems  

• Wear and Tear: Some third-party plans include wear and tear coverage for components that fail prematurely, which is an option often excluded by dealership warranties.    

• Additional Perks: Many extended and used car warranty providers include roadside assistance, courtesy cars, and even diagnostic costs in their plans.  

4. Greater Repair Garage Flexibility 

Dealership warranties often require repairs to be carried out at authorised service centres, which can be inconvenient if you’re far from your dealership. Third-party warranties offer: 

• Wide Repair Network: You can generally take your car to any approved VAT registered repair garage in the UK, which gives you more choices and convenience. While there is no exact number of VAT registered garages available in the UK, nearly all UK garages are VAT registered. 

•  Freedom of Choice: This is helpful if you travel a lot or move to a place where your original dealership isn’t available. While there is no exact number of VAT registered garages in the UK. 

5. Transparency and Consumer Trust 

Third-party providers often prioritise clarity in their terms and conditions: 

• Easy to Understand: Many third-party warranty companies make their terms clear, so you know what’s covered, what’s not, and how to make a claim.  

• Trusted Providers: Well-known warranty providers with good Trustpilot reviews are more likely to keep their promises and handle repairs smoothly.  

6. Additional Benefits 

Third-party warranties frequently include features that elevate their value: 

• Roadside Help: If your car breaks down, roadside assistance is usually included so you’re not stuck.  

• Replacement Car: You may get a temporary car to use while yours is being repaired.  

• Transferable Plans: Some warranties can be passed on to a new owner if you sell your car, which can help increase its value.  

Comparing dealership extended warranties vs. used car warranties

Key considerations when choosing a used car warranty 

To ensure you select the best warranty provider for your needs: 

1. Check Reviews: Pick companies that have good customer feedback and are known for handling claims quickly. 

2. Know What You Need: Think about which parts of your car might need the most protection, especially based on its age and mileage. Tools like Warrantywise’s Reliability Index can show you what problems might come up.  

3. Read the Details: Go through the terms and conditions carefully so you’re not surprised by what’s not covered or any extra costs. 

4. Compare Prices: Look at quotes from different companies to find a good deal, but make sure the important features are still included. 

Why Dealership Warranties May Not Be Ideal 

While getting a warranty from a dealership can be convenient since it’s included in the car purchase and you may get a reminder when the manufacturer warranty has ended, there are some downsides: 

Dealership car warranties may not be ideal for several reasons:

• Shorter Duration and Limited Coverage: Dealership warranties often last for a shorter period or cover fewer components compared to independent extended warranties. This can leave customers exposed to repair costs sooner than expected.
• Crossover with existing warranty. An existing warranty may be in place so you’ll be paying twice for your warranty.
• Lack of Transparency: The terms and conditions of dealership warranties can be complex or unclear, making it difficult for customers to fully understand what is and isn’t included.
• Repair Restrictions: Many dealership warranties require repairs to be carried out only at the selling dealer or within their network, which can be inconvenient for customers who move or travel.
• Exclusions and Limits: Dealership plans may exclude certain parts or types of repairs, and often do not include wear and tear items. There may also be limits on labour rates or the amount paid for specific repairs.
• No Market Comparison: Dealership warranties are usually offered as part of the sales process, so customers may not get the chance to compare with independent providers who may offer better value, more comprehensive plans, or additional benefits like emergency breakdown assistance.
• Peace of Mind with Independent Providers: Independent warranty providers like Warrantywise regularly review their plans to ensure they offer the best value and coverage, with friendly warranty experts on hand to help. These plans are designed to give customers peace of mind and flexibility, allowing them to drive confidently everywhere, every day.

Creating a customised car warranty plan  

A used or extended car warranty plan will allow you to create a plan which is right for you and your vehicle. Below is an example of how you can create a customised warranty plan from Warrantywise for a 5-year-old Volkswagen Golf with less than 50,000 miles. 

Step 1: Select the Base Warranty Level 

Warrantywise automatically recommends a warranty level based on your car’s details:  

• Age & Mileage: 5 years old, 50,000 miles  

• Recommended Plan: 06/60 (for cars up to 6 years old and under 60,000 miles)  

Coverage includes: 

• Mechanical & electrical failures 

• Labour and parts costs 

• Diagnostics 

• UK-wide approved repairer network  

Step 2: Choose Optional Additions 

Enhance your plan with extra protection for key components:  

Standard Inclusions (No Extra Cost) 

• Air Conditioning – Covers compressor and condenser 

• Driver Assistance – Sensors and parking aids 

• MOT Failure – Cover for MOT-related failures  

Optional Upgrades (Additional Cost) 

• Multimedia System – Infotainment and touchscreen 

• Emissions Failure – DPF, EGR, and catalytic converter 

• Advanced Driver Assist – Lane assist, adaptive cruise control  

Step 3: Select Payment & Term 

• Duration: 12, 24, or 36 months  

• Payment Options:  

• Pay in full (one-time payment)  

• Monthly instalments (choose to spread the installments over 12, 24 or 36 months) 

• PAYG (Pay-As-You-Go) Monthly option 

• Cancel the warranty plan if you are unsure (within 14 days of starting the plan)   

Note: the actual cost of the warranty plan may vary (depending on various factors). Contact Warrantywise for a detailed personalised warranty plan.

Why used car warranty plans are a good choice 

• Strong Coverage: They protect important parts like the engine, gearbox, and electronics. 

• Flexible Options: You can adjust the cover to match your budget. 

• Easy Claims: Approved garages are paid for directly, so you don’t have to deal with the hassle. 

• Money-Back Guarantee: If you’re not happy, you can cancel within 14 days and get a refund. 

This setup helps you get the right protection for both your car and your budget. 

Understanding what a used car warranty plan gives you 

If you are unsure about what your car warranty plan gives you, your car warranty provider should be able to offer you a dedicated customer service team, either by phone or online, to offer personalised advice, explain your specific warranty plan and to answer any questions you may have and clarify terms. 

There should be a transparent claims process with step-by-step guidance, outlining the process for making a claim, fault diagnosis and repair approval, helping you to understand what to expect at every stage of the process, plus all paperwork and payment of your repairs paid to the repairers directly by the car warranty company. 

Extended and used car warranty providers offer proactive updates, informing you of any changes to your warranty, renewal options, or additional services that may benefit you as your vehicle ages. 

Conclusion 

Used car warranties offer many benefits compared to dealership warranties. You can save money, get flexible cover, access more repair garages, and enjoy extras like roadside help. 

Take time to think about what you need and choose a trusted provider for solid protection and peace of mind. 

Important: Always check the full terms and conditions of your warranty before you decide. 

Note. The information provided is for general informational purposes only and does not constitute legal, financial, or professional advice.