All You Need To Know About Car Warranty's



by James Reynolds ...

For most Australians, buying a new or used car can be very exhilarating. Or it can be a means to an end to get from point A to point B.


Throughout this vehicle purchase lifecycle, you would have encountered the term ‘warranty’ in some shape or form. Warranty coverage is there to limit your financial exposure when things go wrong with the vehicle.


A review of the types of vehicle warranty available in Australia (in no particular order):


Manufacturer Warranty

A manufacturer or factory warranty is available on new vehicles, and each car manufacturer will have a term (years) and possibly a kilometre limit for that vehicle. This type of warranty will usually cover most defects or breakdowns that could occur from the manufacturer design.

The selling dealer completes all vehicle repairs.


Manufacturer Extended Warranty

The manufacturer can provide either an extension to the manufacturer warranty (see above) or offer a limited extended warranty that excludes some items available from the original warranty. Manufacturers can exclude things such as paint, panel or internal trim.

These products are predominantly sold at the manufacturer dealership and offered on a vehicle they deem worthy of a full or partial cover.

The selling dealer completes all vehicle repairs.


Dealer Statutory Warranty

Motor traders can provide a dealer statutory warranty with the sale of a used vehicle. Usually, this cover period would be 90 days or 5,000kms but can differ in each Australian State where the car is much older or used for commercial purposes.

The selling dealer completes all vehicle repairs.


Extended Warranty (Insurance Warranty)

The term ‘extended warranty’ is a common phrase in Australia. This type of cover can be provided by vehicle manufacturers, motor dealers, insurance companies or 3rd party warranty suppliers. It usually offers similar coverage to the manufacturer warranty but will exclude items of a general wear and tear nature. An example is serviceable items such as filters and seals. It will also exclude cover for paint, panel, trim, glass, batteries etc.

An insurance warranty (like other insurance products) is cancellable, refundable (full or partial) and transferable to another private car buyer. Australian Regulators govern the sale of these products, and in the event of a dispute, you have several avenues to pursue a resolution.

Customers can typically purchase an insurance warranty on a vehicle where a manufacturer warranty or dealer statutory warranty is in place, or the vehicle has no warranty at all. Some restrictions on the insurance warranty can apply if there is no existing warranty (above).

Sellers of this type of warranty can earn a modest commission but typically no more than 20%.


Dealer Contract Warranty (non-insurance)

A dealer contract warranty is what it describes. It is a contract between yourself and the motor dealer where your vehicle must have any repairs and/or vehicle servicing performed at their dealership(s).

This type of cover is non-cancellable, non-refundable, non-transferable and not governed by a regulatory body. Typically, sellers are earning more than 40%-60% commission.


Having some form of warranty in place limits your financial burden if something goes wrong with the vehicle.

You should always review the product cover, whether it is provided through a brochure or product disclosure statement (PDS), and then decide whether the cover, premium, claim process, or other requirements are suitable.

If an insurance warranty is what you are after, then cruise on over to to review the cover options available and obtain a quote.

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