Dealership warranty on Used cars
Every used car purchase from a dealership has the benefit of statutory warranty for 3 months or 5,000km from the date of sale (whichever occurs first). This applies to second hand vehicles that have travelled less than 160,000 km and are less than 10 years old.
As the Motor Trading Association (MTA) states:
If warranty repairs are required on a vehicle and it is undriveable, it is the dealer's responsibility to get the vehicle back to the dealership for repairs or authorise repairs in the remote location. Of course the dealer would have no responsibility if the vehicle was abused.
After this 3-month period, there is the opportunity to commence extended warranty coverage or take up a dealer warranty on your used car.
When assessing your options, some of the points to consider are:
Obligations: A dealer warranty may require you to exclusively use the dealership service centre for repairs. You may also be required to only Service your vehicle at the dealer to keep the warranty valid. This may not be suitable if you are purchasing out of the area or want the convenience of using your local repairer or nearest dealer service outlet.
Coverage limits: The best coverage limit is up to the Market Value of your Vehicle covering components both mechanical and electrical and labour. Some warranty products will have caps and exclusions and only cover the Engine / Drivetrain - which could leave you out of pocket in the event of a failure.
Auto Auto provides extended warranty coverage for used cars under 8 years old that have travelled less than 140,000 km. You have the option to select your commencement date to coincide with the expiry of your 3-month statutory warranty to get continual coverage. Coverage is up to the Market Value of your vehicle or $120,000 whichever is less.
