What’s the difference between car insurance and a warranty? Simply put, insurance covers accidents and theft, while a warranty protects against mechanical failures. In this guide, we’ll break down how they work, what they cover, and whether you need both.
What is a used car warranty or an extended car warranty?
An extended or used car warranty is an agreement that can help pay for the financial cost of part failure and unexpected repairs, providing peace of mind after the manufacturer’s initial warranty has expired. While not legally compulsory, you might like to consider it a protective safety net for your vehicle.
They are particularly valuable when a component fails while the car is in use. The warranty may cover the repair costs for the faulty part, providing much-needed relief to the driver.
What is car insurance?
Car insurance is a legal requirement in the UK and is designed to protect you financially in case of accidents, theft, damage to your vehicle, or liability to others.
It typically covers events like collisions, vandalism, theft, and natural disasters, depending on the type of coverage you have (e.g., fully comprehensive, third-party, third-party fire and theft). Car insurance primarily deals with unforeseen incidents and is required by law to drive legally on the road.
What is the benefit of a used car warranty?
A recent YouGov report highlighted that 68% of motorists are anxious about potential breakdowns in their used cars, especially as auto repair costs have surged to an all-time high in 2023**. Surprisingly, the survey of over 2,000 used car owners uncovered that 78%—almost eight in ten people—do not safeguard their vehicles with an extended, used car-specific warranty.
This is where an extended car warranty may step in, for unforeseen repair costs and part failures that may arise after the manufacturer’s warranty expires. It gives you peace of mind.
Take note: Extended warranties vary so it’s important to review the warranty terms, limitations, and exclusions of the warranty plan to understand how the warranty operates.
Key takeaways
- Used Car Warranty/Extended Warranty: A warranty purchased after the manufacturer’s safeguard warranty, for unexpected mechanical failure
- Car Insurance: Legal protection against accidents, theft, and damage, catering to a wider range of incidents.
Balancing protection for your vehicle
The best solution often involves a combination of both warranties and insurance. You can customise your coverage based on your needs:
- Choose appropriate insurance levels (e.g., fully comprehensive, third-party) based on your risk tolerance and budget.
- Select warranty plans that suit your vehicle’s age, mileage, and your financial situation, with options ranging from basic to comprehensive coverage.
By balancing both warranties and insurance, you create a comprehensive protection strategy that addresses various aspects of vehicle ownership, from legal requirements to unexpected repairs, ensuring you’re prepared for a wide range of potential issues.
Get a warranty you can be confident in with Warrantywise
Warrantywise offers a warranty you can be confident in*. With over 25 years of industry experience, we’ll do all the hard work so you can stay in the driver’s seat. Start your car warranty quote today.
Sources
**All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 4,469 adults with 2,102 of those confirmed to own a used car between three to 12 years old. Fieldwork was undertaken between 12th – 14th July 2023. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).