What to look for when buying and selling a car warranty

What to look for when buying and selling a car warranty

Warranty is an important selling point for any new or used car. It provides peace of mind for the customer. It builds trust. Increases retention rates. And improves profitability.

Customers and retailers should make every effort to ensure there are no mechanical or electrical faults before a car is bought and sold but sometimes a problem can arise and that is where a warranty will save everyone the financial burden of fixing the issue.

That is, of course, if the vehicle is sold with a high-quality financial aftercare product. Choosing the right warranty provider can be the difference between having a part replaced and/or repaired in full – including the cost of labour – or having to subsidise the work. Or worse still, discovering too late an exclusion or small print leaves you to foot the entire bill.

Questions customers may ask when buying a car warranty

For car dealers offering vehicle warranty to their customers, it helps to know the kind of questions that may crop up during the sales process. Car Care Plan offers training support to its clients to ensure they are prepared for any customer queries.

There are also numerous websites providing consumer advice when it comes to purchasing financial aftercare products, such as the Money Advice Service, which has a checklist of questions. Here are some of those consumers are advised to consider when considering a vehicle warranty:

  • Is there a limit to the amount of money you can make a claim for?
  • Does the warranty have an excess?
  • Is the servicing schedule acceptable?
  • Is there a standard 14-day cooling off period?
  • Does it state a limit for either your annual or total mileage?
  • Can you only make a claim after a set period, such as a month?
  • Does the policy cover the full cost of repair – not just parts or labour?
  • Is there a maximum amount paid for labour costs, leaving you to foot the bill for the extra?
  • What garages are on the list used for servicing and repair, and what are their locations and costs?
  • Ensure you understand the terms of any agreement – such as “wear and tear” or “betterment”. See the “A-Z of terms and conditions” from Which? for explanations of various terms.

Knowing the difference between basic rights and different warranty products

A warranty does not replace a customer’s legal rights under the Consumer Rights Act 2015 and they can reject a car and get a full refund within 30 days of buying it if a fault occurs that the retailer cannot prove was not there at the point of sale. Of course, in most cases, a warranty will provide financial support far beyond these basic legal rights but knowing the difference between the variety of support available is important.

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