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Warranty Cover

When it comes to buying a used car, many people feel reassured if it comes with a warranty; in fact its one of the main reasons people buy from dealers. But not all warranties are the same and its important to check what kind of warranty you are getting or you could be caught short.

Itís worth remembering that warrantys cost money and several parties, including the dealer, could be making money out of it.

First, there will be the insurance company who want to make a return on the cover they provide. Secondly many of the car manufacturerís will want a cut for attaching their name to the policy and finally there is the dealer who more often than not has the job of selling it.

This little lot can soon mount up, doubling the price you end up paying, but unlike other insurance products, car warranties are exempt from rules that insist that sellers declare their profit margins, so donít expect that youíll ever end up knowing just how much money you are lining their pockets with.

Warranties fall into one of two categories, inclusion or exclusion warranties.

An inclusion warranty will list all the parts covered in the policy document; bearing in mind an average car has thousands of parts these inclusive lists can look very long and reassuringly impressive, but a closer look can reveal the absence of certain items that you might reasonably expect to be covered like turbo chargers or catalytic converters.

The second kind of warranty is called an exclusion warranty; these only list the items that are not covered. In some respects these policies are easier to understand and they tend to be offered on newer, lower mileage cars.

Whether the used car warranty is an inclusive or exclusive type, itís important to see if the warranty is covering you for consequential loss.

Consequential loss is when a part not covered under the warranty fails and leads to damage to other parts that are covered by the warranty. This may sound like a minor point but if you consider the scenario where a fan belt fails (which is not covered) which leads to the engine overheating and finally blowing the head gasket (which would normally be covered) such a clause can have a devastating effect.