You’re thinking of getting that dream car and can recite its specs and features by heart. You also know about the down payment and monthly payments1 and have planned to take the required insurance policy. However, have you figured out the manufacturer’s warranty? Do you know if your dream car has a device or maintenance plan? And you know what these plans are and what they cover?
Well, lucky for you, here’s a comprehensive guide to the difference between car insurance2 and motor warranty.
Navigating the World of Auto Warranties and Car Insurance Policies
When looking to buy a vehicle, you can expect several consumer protection policies attached to cover the car against particular risks. The two most popular are car insurance and motor warranty3. Insurance companies offer car insurance policies whereas car warranties are provided by the vehicle’s manufacturer, even though some insurance providers also sell a variety of motor warranties. With that here’s the difference between the two plans:
The Brass Tacks of Auto Insurance
A car insurance policy is a plan in which you have to pay premiums4 and is taken as soon as you become the newest car owner in town. It caters to the repairs and replacements required after you’re involved in a car accident. Based on the type of auto insurance you choose, the policy can also offer you financial cover in case your vehicle is stolen, hijacked or is destroyed by fire.
Most insurers offer you custom-made auto insurance policies which include:
The Comprehensive Policy5 – provides you with the highest level of security and offers cover for most risks to your car, which includes accidents, fire, theft, hijacking and damage to third parties.
Third-Party Only insurance – if you’re responsible for an accident, then this policy will cover the damage to other parties and their car and property.
Third-Party, Fire and Theft Insurance Policy – the policy extends past the liability cover to take account of theft and damage due to fire and hijacking.
Uninsured Or Underinsured Motorist Coverage – it covers the expenses hit by a driver with insufficient insurance or no insurance at all.
It’s vital when choosing car insurance to select the one that suits your specific needs and conditions. The payment and claim measures vary from one insurance firm to another, as does the monthly premiums for each type of insurance policy.
The Ins and Outs of Motor Warranty
A motor warranty is an assurance of quality from the manufacturer or sometimes, an auto insurance provider that your vehicle’s parts will last you for the period they’re supposed to. If any part of your vehicle malfunctions due to no fault on your side, you’ll be entitled to have the parts repaired or replaced at no extra costs as stipulated by the warranty.
According to studies, most new cars come with a form of warranty that expires after a specific date or after a particular mileage has been reached. The most popular parts that are usually under the warranty cover are the motor, electric features, fuel system, audio system and sensors. A motor warranty excludes any general wear and tear components and damage that’s a result of negligence.
Some of the famous motor warranty covers include the:
Pre-Owned warranty – the scheme is the best bet for the vehicles whose manufacturer warranties have expired. Insurance firms offer this type of guarantee, catering to the repairs and replacements of features, named explicitly under the respective policy’s terms.
Extended Car Warranty6 – in addition to the basic car warranty on your new vehicle, or if your current manufacturer warranty has seen the end of days, you can also decide to take the extended warranty to cover your vehicle against the costs of mechanical breakdowns. Most car warranty companies offer this plan, and it extends the years and mileage initially provided by the manufacturer.
What’s the Difference between Car Insurance and Motor Warranty?
A vehicle warranty isn’t similar to a car insurance policy since the latter offers you exceptional importance to the liability of the manufacturer in making sure that your vehicle stays in excellent condition. Therefore, if industry faults of defects trigger a mechanical breakdown, the manufacturer or insurance firm’s warranty qualifies you for the replacements and repairs under the plan.
If you’re liable for the damage to any party’s vehicle, the auto insurance policy7 will offer you protection from financial losses. If your car is damaged due to a collision, theft, or natural disaster, the comprehensive policy will cater to the damages incurred.
Should You Have Both?
While the motor warranty comes standard on a new car and expires after several years, you can allow the auto insurance and extended/pre-owned warranty to supplement each other. For instance, if you’re on the road, enjoying the picturesque scenes and your brakes suddenly fail and crash into the back of another automobile, the warranty will cater to the brake damages. At the same time, the insurance policy will cover the costs to your vehicle and the other party, as long as you have the essential cover.
No policies and motor warranties are designed similarly so you should ensure that you check with your insurance provider or car dealership and compare the car insurance quotes to find the best deal for you.
It’s also important to know what is car insurance fronting and if it’s right for you.