Car warranties explained

The concept of a car warranty is pretty simple. It's a voluntary promise from a manufacturer or seller to rectify any defects that occur during a specified time period, a guarantee you won't be footing the bill if your car suffers a fault during that time. But there's also more to that. There are different kinds of warranties, some you might not even know you're getting, and different warranties offer different coverage and are subject to different conditions. Here, we answer the big questions.

New-car 'factory' warranty

This type of warranty is one of the bigger perceived advantages of a new car because you get peace of mind for a substantial period – nowadays three years is the baseline and some brands offer five, six, seven or even 10-year deals. Some factory warranties come with a maximum distance attached – the warranty ends when you reach that or the expiry date first. Others offer unlimited mileage. If you sell the car within the warranty timeframe and uphold the conditions, the warranty is typically transferrable to the next owner/s.

Statutory warranty

These free, mandatory warranties apply to any new or used car sold by a manufacturer or licensed dealer regardless of what you are offered by the seller. Statutory warranties, as well as differing depending on state or territory, are more limited in duration and coverage than a factory offering and are subject to various conditions.

Extended warranties

Sometimes manufacturers run extended-warranty promotions that give you the same factory-backed warranty that applies to your new car, only for longer. These can be a good deal, not the least because you won't have to pay for it. The more common extended warranty will be offered to you by the dealer as added protection for your new car when your factory warranty ends or when you buy a used vehicle. It will be administered by different operators to a factory warranty, have different conditions and you will be asked to pay for it. If you're considering an extended warranty, you want to be sure it provides real benefits. The Australian Competition and Consumer Commission (ACCC) has a lot to say about extended warranties and recommends consumers tread carefully owing to restrictive conditions, exclusions and other issues. In other words, read the fine print so you know exactly what you're getting.

What doesn't a warranty cover?

A warranty covers design or mechanical defects – a fault that shouldn't have occurred in a vehicle of representative age and roadworthy condition. What it doesn't cover is accident damage or damage that has occurred due to misuse or modifications. The cost of servicing and the replacement of consumables such as brake pads also falls outside the warranty-protection field.

How can I void a warranty?

Many buyers think they'll void their new-car warranty if they don't service their car at the dealer. However, so long as an independent workshop performs the factory-specified 'logbook' service at the correct time and uses genuine parts, your warranty must be honoured. A warranty is still conditional, however, and there's plenty you can do to kill it. Fail to service your car by the book or add prohibited modifications and your claim won't be honoured. The same goes if you've been using it for commercial purposes or there's evidence you've been using it recklessly or in a manner it wasn't designed for (say, using a road car as an off-roader).