Read warranty fine print

Whether you buy a brand new car or a relatively new used car, you will need to consider a motor plan, warranty and/or service plan.

These can offer significant peace of mind, but issues can arise if you do not fully understand what is covered or if you have missed the fine print.

General manager of car retailer getWorth, Wesley Procter, warns that the devil is in the detail and if car owners aren’t familiar with the fine print, they could find they have no cover, or only partial cover, when they need it most.

He gives some pointers:

● Make sure you service within the manufacturer’s recommended intervals for both time and mileage. The manufacturers may allow a bit of leeway, for example 1,000km or one month over, but if you fall outside the parameters you risk invalidating the entire warranty or plan.

● If you are looking to have parts fitted or repair work done somewhere other than at an approved workshop, check the fine print. This may invalidate the entire warranty or plan, or a portion of it. It can apply even to fairly standard parts like brake pads.

● If you need panel beating done, ask before going ahead. Cosmetic panel work should be fine, but anything requiring structural work or parts will need to be done at a manufacturer-approved panel shop.

● Be wary of modifications done by non-approved third parties. Even something like a software modification to the ECU (Engine Control Unit) will often invalidate your warranty.

● Most warranties and plans contain fair use provisions – if you drive recklessly or outside of normal driving conditions (for example, if you take the car on the track) you can invalidate your warranty or plan. A manufacturer can pick up a lot of information from your car’s diagnostic system, so don’t assume keeping quiet will protect you.

In some cases, a warranty can sound great on paper, but impose a heavy hidden cost. Procter explains many new cars are being sold these days with limited or no maintenance plans, but extremely generous warranties.

“In order to keep the warranty intact the owner is locked in to using an approved service centre – normally a franchise dealership – for any work needed on the car,” he says.

“This can be more expensive than independent thirdparty maintenance work.”

The fine print in the warranty and plan terms also creates a risk for used car buyers.