How do car warranties work?

Car key and insurance policy
  • A manufacturer’s new car warranty usually lasts three years
  • Many used cars sold by dealers come with a three-month warranty
  • Warranties don’t cover wear and tear or damage to your car
  • You don’t have to have your car serviced by the dealer to maintain your manufacturer’s warranty

Understanding what is covered under a car warranty, and how extended warranties work, is very important when you're buying a car.

What is a car warranty?

 

A warranty is a promise from the vehicle manufacturer to rectify faults that may occur during the warranty period and includes both parts and labour.

 

One big advantage of buying a new car is the warranty, which usually covers you for a significant period of time and an extended distance. A warranty is a guarantee that you won't have to pay for any faults within that period.


A car and any accessories fitted either in the factory or by the dealership are usually covered by the warranty, though it’s worth reading the warranty document thoroughly to ensure you know exactly what it includes.

What is covered under a car warranty?


Your car’s warranty, whether it’s a manufacturer’s, dealer, extended or used-car warranty, typically covers the car and its accessories in relation to safety, reliability and roadworthiness; it doesn’t cover cosmetic damage or normal wear and tear.

A car warranty usually covers:

  • A warranty means you won’t have to pay to repair defects with your car within a fixed period of time
  • A manufacturer’s new car warranty usually lasts three years/ 100,000km, however there are some brands that are offering up to seven years and ‘unlimited’ kilometres
  • You don’t have to have your car serviced by the dealer to maintain your manufacturer’s warranty – an independent mechanic such as the car servicing experts from NRMA car servicing can be more cost-effective as long as the mechanic uses genuine parts of you will void your warranty
  • Many used cars sold by dealers come with a three-month, 5000km warranty
  • Extended warranties are all different. Make sure you understand what’s covered, as well as any costs and conditions
  • Warranties don’t cover wear and tear or damage to your car

A car warranty doesn’t cover:

  • Damage as a result of an accident or misuse of the car
  • Normal wear items such as tyres and brake pads
  • Routine services and maintenance

Is my car battery covered under warranty?

Your car battery is an item that may not be covered. To be certain, check the warranty document. Usually, the battery is covered by a manufacturer’s warranty but not a used-car or dealer warranty.

However, new replacement batteries have a manufacturer’s warranty – batteries from the NRMA, for example, come with a three-year warranty.

Do I have to service my car at the dealership to keep my warranty?

You do not have to service your car at the dealership you bought it from (or another of the brand’s service departments) to maintain a manufacturer’s warranty. However, the service centre you take it to must use genuine parts or you will void your manufacturer’s warranty.


Some dealer-extended warranties do require servicing to be undertaken at the dealership, so make sure you read the warranty document before you sign up – the long-term cost might outweigh the benefit.

You are, however, obliged to service your car according to the manufacturer’s service interval in order to meet the conditions of the warranty.


Having your car serviced at an independent mechanic, such as NRMA car servicing, could be less costly than choosing dealer servicing.

What are the different types of car warranties?


New car manufacturer's warranty

Every new car is covered by a manufacturer’s warranty. On the majority of cars you’ll get at least a three-year, 100,000km warranty – whichever comes first. Some brands now offer an unlimited kilometre warranty, and others offer five-year, six or even seven-years of cover, which is often transferrable to subsequent owners if you sell your car.

 

If a defect occurs during the warranty period, the dealer is obliged to fix the defect without cost to you, so that the vehicle remains in reasonable condition for its age. The time it takes to make repairs is added onto your warranty period.

A new car statutory warranty 

A new car statutory warranty covers you for 12 months or 20,000km, whichever comes first. This warranty will in most cases cover all defective items on a car and is a legal requirement for cars below the luxury car tax threshold of $64,132 (or $75,526 for fuel-efficient vehicles – those that use 7.0L/ 100km or less on the government combined cycle).

Used car statutory warranty

A used car statutory warranty applies on all dealer-sold passenger cars that have travelled less than 160,000km,are less than 10 years old, and do not exceed the luxury car tax price threshold. The warranty is valid for three months or 5,000km from date of purchase. This warranty covers most items on a car related to safety, reliability and roadworthiness.

What does extended warranty cover on a car?

The NRMA recommends you carefully read the extended warranty document to make sure you know what it covers and any conditions that apply – they’re all different.

A manufacturer’s extended warranty is sometimes offered as a bonus, and usually comes with similar cover and conditions as the standard manufacturer’s warranty. This type of extended warranty is usually worth having.

 

A dealer’s extended warranty, on the other hand, might come at a price, only cover specific items up to a certain cost, and can require that you service your car exclusively at that dealership, which may not be the most cost-effective option.

I’m having problems with my warranty claim. What should I do?

You may have returned your car to the dealer service department many times for repairs under warranty, and/or the repairs undertaken may not have resolved the problem. Perhaps the warranty has expired in the interim. What should you do?

There are legal and contractual obligations that a dealership or a manufacturer must uphold – they are obliged to repair the car.

In the first instance, contact the dealership, the car manufacturer or importer requesting that any items covered by the warranty are fixed without cost.

If this approach fails, contact the NSW Department of Fair Trading on 13 32 20.

Considering buying a used car?

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