How to avoid warranty wars

For most of us, the warranty is the last thing we think of when buying a new car

For most of us, the warranty is the last thing we think of when buying a new car. A little more attention, says Brian Byrne, will avert later anguish.

Your new pride and joy sits shining in the driveway, the interior pristine. You're sure it will serve you well for a long time to come. Well, according to the most recent Which? consumer magazine survey in Britian, at least a third of all new cars will require a spare part, other than normal service items, within two years. And up to a fifth of some makes will break down in the first year.

Even a Toyota, that "best built car in the world", will have a warranty claim on almost half of its cars sold in this country.

Aren't you glad you have that wonderful warranty? Or did you even think about it when choosing your car? If you did, you're in the minority. If you know what's covered, you're a rarity.

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"Most people don't have an idea of what is covered in their warranty," says Ross Kelly, service manager at Fiat Auto Ireland. "They expect their cars to last forever, and just reckon they're ENTITLED to replacement parts in the first few years."

It's a view echoed by Sean O'Connell, customer services and warranty manager at Toyota Ireland. It's Toyota's experience that warranties are not high on the priorities of customers thinking.

"They don't read the literature supplied with the car and, in my opinion, don't have a full understanding of their warranty. For instance, a customer whose clutch is burned out through wear and tear is usually very surprised to find out that it isn't covered."

And that, of course, is the bottom line. Just what IS covered by car warranties? Or what is NOT? "It depends" is that most unsatisfactory answer. It depends on what the primary warranty is, and whether it's extended by an insurance-type extra cover.

It depends whether you're buying Japanese, Korean, or European. It even depends on your relationship with your dealer, and whether your car is repaired at an official dealer of your car's brand.

There's been a traditional divide here for many years, with European manufacturers providing a 12-month warranty and Japanese makers giving three years. It's not unreasonable to believe that the Europeans agreed quietly not to go down the three-year route.

However, since the beginning of this year, all makers selling in the EU must give a two-year warranty. Whether that's "bumper-to-bumper" for the second year is open to interpretation.

Fiat, for instance, who "jumped the gun" with a full manufacturer 24-month warranty last November, tells us that its "second year" guarantee is a "mirror" of the first. Yet, the third year it has on its Alfa Romeo models is based on an insurance policy system covering only component failure "due to sudden and unexpected circumstances".

Japanese makers' three-year warranties are "bumper to bumper" for the full three years - and transferable to later owners during the warranty period.

The fact that European cars have generally made up more than half the total annual sales in the Irish market supports the belief that warranties don't rate high on buying priorities. Nor has there been an outcry here when distributors of many franchises in Britain promoted extended warranties on their European cars, despite the fact that Japanese models are very much a minority seller in that market. As it happened, the "extended" warranties are also locally-sourced insurance-type guarantees, not manufacturer-backed.

Perhaps British motorists are more choosy than us about warranty, forcing marques to offer more. That is clearly the thinking behind the five-year, unlimited mileage manufacturer-backed warranty on Hyundais in Britain from this month. It's not going to be offered in Ireland, where buyers currently have a three-year cover.

Five-year warranties are not new. In the 1970s, when the US firm Chrysler was doing very badly, it introduced a five-year cover with a 50,000-mile limit. Other major marques had to follow.

There are separate warranties against rust and perforation of body panels, ranging from six to 12 years, depending on brand. In practice, rustproof has reached such a level in the past decade or so that body corrosion is no longer a serious issue.

There are separate warranties against defective or wrongly applied paint. These are typically over three years, and there are a few caveat conditions.

Though few makers will divulge actual figures, all will agree that the level of warranty claims has declined in recent years, thanks to improved technology and build quality advances.

Toyota's Sean Byrne reckons that the claims rate has decreased by a fifth over the past three years. The most common claim for Toyotas relates to batteries, and he puts the average cost of a claim at €200 per car.

Ross Kelly of Fiat says claim levels are dropping, but warns that costs are rising. "When they do fail, the components are typically more expensive. For instance, an ignition problem five years ago could often be fixed with a new set of points and a condenser. Now it might mean the replacement of a computerised Engine Control Unit at around €700."

Anticipating what components might fail can in many cases be outside the control of the carmaker. Apart from the chassis and basic running gear, many components are bought in from outside suppliers. These can fail in a "serial" manner, with, say, a particular batch of electric steering units manufactured between certain dates all tending to give trouble.

In many cases, these will result in a "recall" of the vehicles concerned, such as the recent situation with around 3,500 MINI Coopers sold in the US which were brought back in to deal with a potential gear-cable problem.

Given the current compensation culture, any problem that might be safety-related will get such attention quickly. On the other hand, a series of failures of components which don't compromise safety might be dealt with as they happen under individual warranty claims rather than be put through the more expensive recall procedure.

In the end, whatever your car, and however cheap or expensive it is, the "devil is in the detail" as they say. So, read the small print next time you have a little time to spare. It could save you, and your dealer, some stress.