Car Warranty Jargon Explained

There are a number of terms that you may come across in a car warranty policy. To make sure you fully understand the terms and don’t misunderstand what a warranty plan can cover‚ we recommend you read our simple translations of car warranty jargon…

Wear and Tear

Wear and tear is considered to be one of the most common causes of parts failures and electrical faults. Some warranty providers accept claims resulting from wear and tear‚ however others don’t include this so you need to check whether this is included in a policy.

When making a claim we recommend that you thoroughly check your policy and what it covers. Although some policies claim to cover wear and tear there may be conditions for this in the small print which can exclude a number of wear and tear claims.

Normal Deterioration

This refers to when a part fails due to wear and tear at its expected life period. If an insurer claims to cover wear and tear‚ check if this covers normal deterioration as a part may only claim to have a life span of one year. If they do not cover normal deterioration then you will end up paying for the insured parts if they go wrong.

Consequential Damage

Consequential damage or consequential loss is where an insured part fails resulting from the failure of a part which is not on their list. Not all car warranty providers cover consequential damage so be aware of this when deciding on which insurer you choose.

Betterment

When a part is replaced which actually increases the value of the car‚ this is classed as betterment. It is important to check with the car warranty provider whether this is covered before you decide to take out the insurance policy. If major parts such as the engine or gearbox fail then you could end up paying for these if the car warranty insurer does not cover this.

EU Car Warranty Coverage

Many policies entitle you to cover abroad, most commonly in Europe. However when looking into the small print the majority only cover EU countries or countries that are members of the EFTA. Check in the small print as if the car warranty insurance only covers EU members then European countries such as Switzerland will not be covered.

If you are unsure of which countries are EU/EFTA members click here to view our EU map.

Warranty Transfers

You can usually transfer your warranty to a new owner on the condition that they are a private owner and not a dealer. You may have to pay an administration charge to the insurance company for the transfer. The balance may be transferable to the new owner if it is paid monthly‚ however if it has been paid upfront it is unlikely you will be able get a refund. Warranties can be a great selling tool as it gives the potential owner peace of mind that they won’t have to make any costly payouts should anything go wrong.

Cancellation Policy

All warranty agreements should have the option for you to cancel at the start of your agreement. This is sometimes referred to as a cooling off period. Be aware that warranty providers usually require that customers cancel their policies within a set time period. These cancellation periods can vary and can be from 14 – 30 days. However these can be less so check the terms of the policy and make sure if there are any administration charges associated with cancellation policies.

If you want to cancel your policy after this period‚ if you have not made any claims you may be able to cancel less an administration charge which is usually around £50. If a claim has been made on the vehicle that is insured under a fixed policy you are unlikely to receive a refund or cancel the policy.

Full Service History

Some car warranty insurers require that your car has a full service history. This means your car’s service book shows that the car has been serviced on time and according to the manufacturer’s instructions. This does not mean that the car has had to have been serviced by the manufacturer‚ the service could have taken place at any garage.

Parts Failure

This is the failure or breakdown of any mechanical or electrical components of the vehicle. Each car warranty policy will have a list of parts which are covered under the insurance you take out. We recommend that you thoroughly check the insured parts list before buying any car warranty policy‚ as they can vary widely.