Extended Car Warranty or Service and Maintenance Plan?

by edstorm

Buying a new car is expensive, time consuming and altogether stressful exercise, unless you know where to look.

New cars are backed by warranties, but it`s always best to make sure that you are purchasing from an accredited dealer, lest you find some sneaky, hidden loopholes. You should be weary of what exactly warranty you are provided with entitles you to, as any old warranty won`t do. A warranty might cover you for anywhere from 1500 to 150,000 kilometers, so get your facts straight before you make a purchase!

Buying a new car is an expensive exercise. All too often one hears of bad luck stories where every conceivable mechanical or electrical problem arises as soon as the shiny new car is driven off the dealership floor!

Although all new cars are backed by warranties underwritten by the manufacturers, there are always those costly little loopholes that are not automatically covered.

The big question that arises is; should one opt for an extended car warranty or service and maintenance plan to stop the repairs gap, so to speak?

Firstly, it’s important to recognise the difference between a warranty and service & maintenance plan, whether a new car warranty or extended warranty.


What is a new car warranty?

All new cars manufactured by General Motors, for instance, are sold with a five year or 120 000 km warranty. What this actually means is that the vehicle, together with approved accessories, is guaranteed to be free of defects.

Should any part misfire or malfunction within five years or 120 000 km of the date of purchase, it will be replaced free of charge as long as the repairs are conducted at an authorised dealer.

Before you jump and up and down, however, let’s take a look at the typical warranty exclusions:

  • CV joints
  • Shock absorbers
  • Exhaust system
  • Clutch, brakes, tyres, windscreen wipers and other ‘friction’ equipment and materials
  • Wear and tear
  • On-board entertainment

Corrosion damage and any items that have to be replaced during a normal service are not included under the warranty.

An extended car warranty offers the same level of protection against mechanical and electrical failure but only kicks in once the manufacturer’s warranty has expired.

Service and Maintenance plan basics

A service and maintenance plan, on the other hand, covers routine vehicle servicing including parts and labour as well as all repairs associated with normal wear and tear.

The big plus is it also covers all major car parts including the engine, providing a vehicle health care package comparable to the best comprehensive medical aid plans on the market today!

In South Africa, short term insurance companies sell standard service plans that only provide cover for routine service items, service and maintenance plans that offer ‘blanket’ cover, and extended warranties that provide the same level of cover as new car warranties.

Depending on your vehicle budget, you’ll be able to find the perfect product as protection against inevitable repairs and maintenance.

Updated: 08/30/2012, edstorm
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terry on 09/11/2012

I bought a used car a few years ago, and was able to have them include a 100k mile warranty on the dive train. It was well worth it, had to replace the bearing on all 4 wheals and at $300 each (if it wasn't covered) ill call that a win

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