For some time now, eastern car manufacturers such as Kia & Hyundai, have offered new car warranties that far exceed those offered by the “mainstream” car makers, such as Ford, Vauxhall, Renault etc. and whilst it would seem charitable to believe its because they’ve got that much faith in the products they make, I believe its actually more about getting new customers and selling more cars.
Clearly, most of us wouldn’t immediately think about buying a car we don’t know much about, or that we haven’t owned before, or indeed, one that no one you even know has owned before. However we might do, if its cheap, or if it offers some other benefit over its competition and if that’s the case, well we might just take that risk and that’s how less popular car makers like Kia and Hyundai, have established themselves in the UK. Its got to be said, both Kia & Hyundai have done a pretty good job in convincing us to buy their products and this hasn’t gone unnoticed by the big players who are now beginning to realise that to sell cars in that market, well they’ve got to compete and that having a more established badge alone, just isn’t going to cut it.
In the light of this, Vauxhall have just announced what it refers to as a ‘Lifetime Warranty’ which it seems runs throughout the life of the car or up to 100,000 miles. The warranty is free when you buy the car new and includes the cars power-train, steering system, electrical equipment and braking system, but to keep it in force, owners will have to take their cars to a Vauxhall dealer every 12 months for a free vehicle inspection. The warranty will apply to all cars registered after 1st August 2010
The warranty only applies to the cars original owner, but Vauxhall says its going to make it available to second owners (those of us that buy the car used), but that it will be at a price, so you’re going to be charged for taking the warranty over. Details of how much the cost is likely to be haven’t been announced yet, but on the basis that this incentive is to sell new cars and not 3 year old used ones, I don’t see them doing the used buyer any favours, so I cant imagine its going to be cheap.
The Vauxhall offer follows on the heels of its sister franchise Chevrolet, who extended a 5 year warranty to a couple of its cars, the Aveo and the Cruze back in April 2010, but along with the warranty, buyers of Aveo or Cruze also got 3 years or 30,000 miles worth of free servicing.
Toyota announced in July, that its now offering a 5 year 100,000 mile warranty on its cars and that’s great news, but one expects it’s the first of the ‘big players’ to jump, simply because of all the recall issues that have dogged Toyota for the last few months and the lengthening of the warranty, from 3 years to 5 years is to try and restore buyer confidence in the product
For many buyers, the extended warranties won’t really matter, as the vast number of drivers keep their cars 3 years or less and most do less than 60,000 miles in that time, so putting the warranty up to ‘one million miles’ really wouldn’t make any difference. That said, it’s a bit like buying a divers watch that will work 200 metres under the sea…you’re never going to need it, or use it, however, its nice to know you could! These initiatives are not aimed at ‘Joe Public’ but at business users and company car fleets, but the trickle down ‘feel good’ factor will mean that even a driver that does less than 10,000 miles a year will feel more confident about buying a car that seemingly offers more support.
So considering everything, it seems pretty inevitable that these longer or higher mileage warranties are going to become the norm and I would expect once the car makers get their heads around the fact that its not actually going to cost them any more in the vast majority of cases, and where it does, that cost can be aggregated across every unit (car) they sell, they will think the extra costs involved are worth it so that they stack up against their competitors. After all, it’s a tough position to defend, when a customer tells a sales guy that he can get a 100,000 mile warranty on an alternative car, and asks the sales person why they can’t you offer it as well – or is it that you don’t have faith in your product?
Watch this space!