How Longer Manufacturer Warranties Are Helping To Slow Down Depreciation

Millions of brand new cars and produced and sold to consumers each year. Although a significant number of those new cars sold end up being bought by companies that offer fleet leasing to businesses, there is still a huge number that are bought by individuals as personal or family cars.

Perhaps the biggest selling point about brand new cars is the fact that they have had no previous keepers, and, as such, are highly unlikely to suffer from any of the mechanical or electrical problems that a lot of used cars will eventually develop.

Maufacturer warranties for car

When car manufacturers sell their models through their network of franchised dealerships, one of the key selling points of those models that sales people are keen to get across to potential customers is that they can be assured of hassle-free motoring because of the new car warranty that the vehicles they sell come with.

Brand new cars are typically sold with two to three year warranties, although customers have the option to purchase extended warranties either from the dealership or through an independent warranty company (in essence, you would be paying for an insurance policy of sorts).

What do car manufacturer warranties cover?

Motorists will be pleased to learn that the warranties that come as standard with brand new cars typically include all manner of components that are expensive to replace, such as most or all of the engine, electronics and other bits and pieces.

There are some specific items that the warranty won’t cover such as consumables like oil, tyres and brakes, but even those will be covered by some kind of statutory warranty by law. Cars also have long warranties to protect against corrosion, something that Renault-owned budget car brand Dacia had to deal with claims for recently.

Which manufacturers offer the longest warranties?

Here are the warranty validity periods of some the best-known car manufacturers (thanks to Motorline Direct for compiling this list):

  • Kia – 7 years or 100,000 miles;

  • Toyota – 5 years or 100,000 miles;

  • Fiat – 3 years, unlimited miles;

  • Honda – 3 years or 90,000 miles;

  • Ford – 3 years or 60,000 miles;

  • Volkswagen – 3 years or 60,000 miles.

As you can tell from the list above, Kia is perhaps one of the best-known carmakers for offering a long warranty period to any customers that buy its cars. One thing they do which other manufacturers do not is offer a transferrable warranty; what many people do not realise is that the manufacturer’s warranty is not normally transferable to future car owners!

How do warranties affect depreciation?

One factor that can affect a car’s depreciation values is down to consumer confidence. In other words, how likely are car owners going to have to pay out for major repair work to their cars within the life of the car.

Using Kia as an example, The Telegraph recently reported how the long and transferable warranties of Kia cars positively affected depreciation, giving a similar model comparison against a competitor make and model.

Only time will tell whether other car manufacturers will follow suit and offer such attractive warranty options with the vehicles they produce.


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