Most car manufacturers offer you a standard warranty for the first two years or 40,000 kms, whichever comes first. However, the dealer will insist you to buy an extended warranty these days as you finalise your car and prepare to sign the cheque.
The extended warranty is offered for the third and fourth years or 80,000 kms. You can also buy an extended warranty for only the third year or 60,000 kms and then opt for the fourth year or 80,000 kms.
This warranty covers mechanical and electrical problems, problems relating to the engine and any other manufacturing defect and labour cost for the repairs. The price you pay for this extended warranty could vary depending on the model of the car and days elapsed since the purchase.
It could cost you about 1-1.5% of the price you pay for your car. Repairs can be carried out at any authorized service centre across the country, irrespective of the dealer you have purchased it from.
"Car users should opt for an extended warranty as it gives them peace of mind at a small additional cost. Even if one defect comes along in the car, it would more than offset the money you pay for buying this warranty," says Rajesh Sood, chief executive officer, ecardlr.com. As your car ages, there is a higher chance of parts within it failing. Since car components are costly and require labour to replace it, very often the cost is high.
Consider Maruti's WagonR for example. The WagonR VXI version costs 4.5 lakh (Mumbai). If you buy the extended warranty for the third and fourth year combined within 60 days of the purchase you have to pay 4,390. If you buy it within 61 to 365 days, then you pay 5,048 and if you buy within 366 to 730 days you end up paying 5,707. Simply put, the sooner you buy it, the higher the savings.
However, this warranty works only if you take your car regularly to an authorised service centre. If you get your car serviced by a roadside mechanic and any part has been tampered with, the company could refuse your warranty claim in the future. So if you have a Maruti extended warranty, you need to get your car serviced only at Maruti's authorised service centres across the country.
"Components or parts subject to wear and tear are not covered under the extended warranty," says Banwari Lal Sharma, AVP (marketing), carwale.com. Parts like tyres, batteries, and clutch plate will not be covered under the extended warranty. However, things like mechanical and electrical breakdown of parts like engine, gear box, steering, brakes, electrical items like starter motor, alternator, etc. are covered under extended warranty.
Car components are expensive and tough to repair. In many cases replacing them could be the only viable option. For example, take the case of your car air conditioner. You have a simple problem in the air conditioner and the mechanic tells you that the evaporator coil needs to be changed.
This could cost you as much as 12,000. However, if you have an extended warranty, this could be covered and you can save this amount. "On several occasions, electrical and mechanical parts in a car simply fail and there is not much we can do about it other than replacing them," says Rupesh Rele, a Mumbai-based automobile expert. Now if you were to buy these parts and get them changed you have to pay for the parts as well as the labour cost, which would cost you a lot.
An extended warranty is a safeguard against such expensive and unforeseen repairs.
"Irrespective of the time you plan to use your car, it makes sense to buy an extended warranty," says Banwari Lal Sharma. In case you wish to sell your car in between, the extended warranty is transferable, and it can add to the resale value of your car. It is better that you buy the extended warranty with the delivery of your car, as it gets costlier as time passes, or you may just forget to buy it.
Source: Economic Times