Make sure you always read the fine print
FORGET navigation, leather seats and sunroofs. The most valuable feature when it comes to used cars should be the balance of a factory warranty.
Unfortunately, with varying budgets and tastes, the peace of mind that comes with factory warranties isn’t always possible. That 2011 model BMW 335i might be just within your price range and too irresistible to pass up, but with only 10 000km and a matter of months before BMW’s Motor Plan expires, you’ll be at risk of a huge financial burden should something mechanical go wrong next year.
But there is an option. For a reasonably affordable monthly premium (or one lump sum with some companies) several aftermarket warranty providers such as Motorite, Hollard and Liquidcapital will extend cover for two more years, or up to 200 000km, whichever comes first. For me, a 38-year-old male, one company quoted R389 per month to cover this particular BMW for two years.
There is a strict set of criteria for a car to qualify for the extra cover (generally younger, lower mileage cars enjoy more benefits), but if your prospective purchase fits the bill, the investment in an aftermarket warranty could be well worth the cost in the long run.
But be warned, these policies aren’t as straightforward as factory warranties. If your turbocharger blows under a manufacturer’s warranty a dealership will likely just replace it without many questions asked, as long as the car’s been serviced according to schedule.
But, if your five-year-old 335i’s turbo goes, the aftermarket warranty provider will make you jump through more hoops by asking for an evaluation by a workshop accredited by the Retail Motor Industry (RMI) or approved dealership. If it’s deemed the failure wasn’t the result of vehicle modification, or from a foreign material such as sand entering the intake system, or a long list of other things, it will only then approve the claim. Even then, it might only pay a portion of the repair cost.
While affiliation with the RMI in no way guarantees a workshop’s credibility, the organisation does attempt to ensure that its network of businesses abide by a certain level of ethics and service delivery. The RMI is widely accepted as the country’s leading motor-industry watchdog, and by requesting work and assessments by accredited garages, warranty companies are, in the best way possible, protecting themselves from any dodgy workshops.
The terms and conditions that come with aftermarket warranties are a minefield of fine print, and it’s up to you as the client to read and understand the heap of paperwork. Industry complaint websites such as hellopeter.com are overflowing with unhappy clients claiming that a warranty provider wrongly dismissed a claim, but in many of them it was the customer who hadn’t read the conditions or had misunderstood them.
Sagie Moodley, owner of RMI accredited workshop Sagie’s Auto Performance, insists that aftermarket warranties are a worthwhile expense as long as customers fully understand what they’re buying.
“Salespeople need to explain very clearly when they sell these aftermarket policies, what is covered and what isn’t,” says Moodley. “Customers must also understand at the outset that all the components covered are only covered for a certain percentage. But, even in instances where only a portion is paid, this value is often worth more than the cost of the warranty in the first place, so well worth it.”
For reference, a turbo replacement in a 2011 BMW 335i could cost well over R10 000 if the repairs were done at a private workshop and around R20 000 at a BMW agent. At R389 per month, or R4 668 per year, the warranty cost could be recouped with this repair alone, even if the policy only pays half of the bill.
Most warranty providers’ websites entice customers with broad statements of what’s covered, but be aware that items like steering systems comprise many components, and only core items such as the actual rack and hydraulic pump are included in the cover. An aftermarket warranty is designed to ease the burden of unexpected mechanical failures, and not to ensure that your car remains in showroom condition during the coverage period.