Aftermarket warranties require careful attention
Cars are frequently replaced rather than fixed, but independent warranties can still make sense
The average Irish car is now eight and a half years old, a figure that has risen significantly since the recession began its inexorable zombie bite into the wallets of Ireland’s motorists.
From 2000 to 2008, we had almost become a nation of drivers that didn’t bother to service their cars anymore. If you changed cars every year or two years, you probably didn’t even need to do basic things such as replacing the tyres. Increasing service intervals meant that many owners didn’t need to do anything more than bring their cars back in for a quick oil and filter change before it was time to move on to their new purchase.
Times have changed, and we are now clinging on to our expensive purchases for much longer. Even as carmakers and importers strive to bring down the all-important “cost of change” figure, and launch ever more tempting personal contract plans and other finance offers, the bald fact is that you are almost always financially better off to keep an old car going than to spend money on buying a new one.
The downside is the cost of maintenance. While consumable items such as brake pads, oil and air filters and the like have come down significantly in price in recent years, bigger mechanical and electronic parts have rocketed in cost.
Worse still, modern cars are designed effectively as a kit of components, often arriving at the factory in part-built form. Which means that, as with so many domestic goods now, they’re simply not designed to be fixed, but to be replaced. If a major mechanical component goes pop now, there’s not a lot of point in getting out the Haynes manual and a bag of spanners. It’s going to cost you.
Unless of course you have purchased an aftermarket warranty, or a mechanical and electrical breakdown insurance (MBI) policy. Such policies, as the name suggests, are a way of insuring your car against major mechanical failure, meaning that you can treat your old or used car much the way you treat a new one. If something goes wrong, simply bring it to the garage and get it fixed and your pocket will remain un-picked.
But as with any such purchase, you not only need to do your homework and your sums carefully and correctly, you also need to make sure you read the fine print.
James Ruppert is a former used-car dealer and now a columnist for British magazine Autocar. He says that a self-bought warranty is a good idea. “Modern cars may be more reliable but when they go wrong it is the end of the world. Diesel particulate filters and dual clutches are a financial nightmare to sort out. Compared to the old days the consequences of a breakdown are horrendous, which is why I think a modern car should be covered.
Oddly I was talking to some of my colleagues at Autocar and they agreed that they wouldn’t like to run some of their long termers as personal cars because of the sheer mechanical complication and cost of servicing.
“If a car is over 10 years old and has covered over 100,000 miles (160,000km) then in most cases it can’t be covered. The trouble is all the cars I buy are easily over that limit so I have never bothered with a warranty. My reasoning is that if I get a year or two out of the cars I buy then a big bill kills the car and I start again,” he explains.
Clearly if something does go expensively wrong, you’re going to be glad you paid for the warranty, just as if you have that minor fender-bender, you’re going to be glad you paid for fully comprehensive insurance. But there are some pitfalls.