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by John Cadogan

Let’s say you’re in the market for a new car. Warranty is probably one of the many important considerations you’ll factor into your decision.

The industry ‘default’ warranty is three years or 100,000km – whichever comes first. Variations are available: Volkswagen, for example, just increased its warranty to three years/unlimited kilometres (but check the fine print if you’re in the market now, because at least five models in Volkswagen’s range are exempt from the increase until new models are released – presumably to comply with some upcoming underlying increased standard in the durability of the product). Some manufacturers – like Mitsubishi and Hyundai – go for five years and either unlimited kilometres or 130,000km.

Of all these different warranties on offer, for most buyers, the time component of the warranty is more important than the distance. This is because, according to Ausstats, the average car in Australia drives just under 15,000km a year. So in three years of average motoring the odometer will record just under 45,000km – so the warranty will expire (on the basis of time) before it’s halfway to the distance cut-off. Even someone who drives twice as far in distance as an average Aussie will be within the distance component of the warranty’s limits when they blow the time on their warranty’s clock.

This means the five-year warranty deal really is something many buyers in the market should consider. If you’ve two essentially equivalent cars on your short list, and one has two extra years’ warranty, that extra peace of mind might swing it for you – provided, of course, you intend to keep the car for longer than three years.

Warranties are generally transferrable to the next owner, provided the time/distance parameters are within the limits. However, if the car is a repaired write-off it is usually not covered by a warranty – so it pays to know if you’re buying one of those.

Warranties cover defects in the vehicle – provided they don’t manifest themselves because you abuse the car or just start wearing it out. Manufacturers, which generally don’t like to admit defects occur, often refer to warranty-related defect as ‘warrantable concerns’. They mean defects in manufacture of workmanship.

For example, if you’re driving down the freeway at 100km/h and the engine control unit carks itself for no apparent reason, your warranty will cover the repairs. But if you drive into a creek, exceed the wading depth of your shiny new 4X4 and the engine sucks water and develops and engine-trashing hydraulic lock, paying for that abuse will be your problem. Also, tyres, brakes (including rotors) and clutches, plus wiper blades, etc., that just wear out are your problem, which seems fair enough.

‘Abuse’ also covers things like using the wrong grade of fuel – so if your engine burns a piston because it needs 98RON fuel and you fed it 91RON, ownership of the problem will be yours. And, although you might not actually abuse your car during a track day, motorsport use is something that generally voids warranties.

Getting the right warranty is one thing; keeping it’s another. Basically, according to the ACCC, there are three servicing prerequisites you need to meet to maintain your warranty.

First up, you need to get your car serviced by someone qualified. This doesn’t necessarily mean an authorised agent of the manufacturer (ie a dealer) – although you could be forgiven for believing that it does.

The car industry practices a kind of coercion by stealth when it comes to servicing and warranty, without exactly walking across the ACCC’s anti-competitive line. In a nutshell, car companies don’t want you to know that it is perfectly okay to have your car serviced outside the authorised dealership network – provided the person who does the servicing is qualified to do it.

Basically, it would be both anti-competitive and illegal to make having your car serviced at the dealership a condition of your warranty.

Car dealers have been under considerable pressure since the GFC to maintain their viability by ramping up their so-called ‘ancilliary business’ – basically parts and servicing – but the fact remains that your warranty is not joined at the hip to the service department of the dealer who sold you the car.

Despite the car manufacturer’s prevarications, most scheduled servicing – especially for the first few years of a car’s life – boils down to little more than oil changes and a basic mechanical once-over, which is why often, out of sight, dealerships may put their lowest-paid service team members (apprentices) on that particular case. (It’s good business, but unpalatable to owners, when a high-priced prestige car cops a service at the hands of a second-year apprentice, which is why the technicians and owners often do not interact at dealerships.)

Most authorised dealers are actually very good at servicing – but some are not. Privately, off the record, senior car company executives will often admit that a small proportion of dealerships (and here, it pays to remember that car companies are actually quite separate from dealerships, which are overwhelmingly separately owned businesses with franchise agreements but which are basically in charge of their own quality control) often don’t invest heavily enough in things like training for their service techs. In this situation, there’s very little the parent car company can actually do about that. So the bottom line is that while the servicing at authorised dealerships is usually pretty good, going to an authorised dealer is no guarantee of getting a good job done.

The fact is, according to the ACCC, you may use a trusted third-party service technician (say, someone you know and trust) to service your new car and your warranty will remain intact – provided the technician is qualified, such as by being a trade-qualified mechanic.

Often its easier to get some ‘face time’ with a third-party servicing bloke who actually works on your car, which is something many dealerships frown upon, sometimes because they don’t want you to know he’s 17 years old who spent half of the time on your car thinking about his upcoming trip to the local tattoo parlour.

Third-party service providers generally have three things going for them. First, service is their main game, so their business lives and dies on the quality of the service they provide. Dealerships offer service as an ancilliary add-on. Second, you get to discuss your car’s condition with the bloke working on it. You might get a valuable insight into upcoming costs – for example it’s often good to know that you might need new front brake rotors at your next service, because you can then start budgeting for that cost, and it won’t come as a shock. Thirdly, third-party servicing is often cheaper that at a dealership.

A downside of the third-party option is that few third-party service providers can afford the expensive diagnostic machines genuine dealers are forced to purchase in order to dial up the car’s neural network and look for fault codes and reset warning lights. In this case, someone, either the third-party mechanic of you, will need to have a relationship with a genuine service department for dealing with (in particular) ECU-type faults.

The final problem with using a third-party service agent is that it could put you in the middle of a dispute between the car company and the service agent if your car develops a fault that you think is a warranty matter, and the car company tells you it’s the service agent’s problem, while the service agent tells you it’s the car company’s problem. If that happens, it’s probably a really good time to involve the Department of Fair Trading in your state as an adjudicator and, if necessary, an enforcer.

If your car has a warranty-type problem, a genuine dealer is the place to go. They should fix it for you without charge.

The second prerequisite for maintaining your warranty’s coverage is getting your servicing done to the manufacturer’s specifications. This is really important because, if for example there’s a 15,000km service interval and you’ve driven 25,000km without getting a service, you could very well be entirely on your own if a con rod punches its way out the side of the engine block because you’ve run too low on oil. In addition, whoever performs the service needs to meet the manufacturer’s specifications (for example they must change the oil and replace it with oil of appropriate specification, and do everything else in the schedule by the book).

Modifications are also very risky, warranty-wise – so if you get someone in the aftermarket modifications world to tweak your new car, you should inquire whether or not they will cover you against problems those modifications might cause. It’s almost certain the vehicle manufacturer will not.

Next week, we’ll talk about spare parts, and how these relate to both warranty and your hip pocket. That should be good for even more hate mail.






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