A Guide to Extended Vehicle Warranties

Extended Warranties

An Extended Vehicle Warranty can help you avoid large, unexpected repair bills and help you to protect one of your biggest investments - your car. Securing extended warranty coverage before your car's manufacturer's warranty runs out means that you're covered for the mechanical or electrical failure of thousands of parts - repairs to which could cost thousands without cover.

Read on to find out more about manufacturer and statuatory warranties, what an extended warranty is, how they work, and the potential benefits of an extended warranty as a car owner and as a private seller.

What is a standard vehicle warranty?

A vehicle warranty is a guarantee that your vehicle will be repaired if certain problems occur during a fixed period of time.

The Trade Practices Act (1974) protects buyers when they purchase goods in Australia, including vehicles, entitling purchasers to certain basic rights. These rights are known as statutory rights.

Additionally, all new cars come with a comprehensive manufacturer's warranty, although the length of the warranty period varies in terms of kilometres driven and vehicle age - up to 150,000 kilometres or 5 years in some cases.

Used cars bought from a licensed motor vehicle dealer may also come with a statutory warranty. The conditions under which a statuatory warranty is required by law vary by state, and depend on the age of of the car and the kilometres it has travelled done. Warranty conditions are also be affected by the purchase price of the vehicle in some states.

Table 1: Dealer Statutory Warranties for Used Vehicles

Table 1: Dealer Statutory Warranties for Used Vehicles
 Qualifying Vehicles (max age / KM at sale)Warranty Length
(max time / KM)
VIC 10 years old / 160,000 km 3 months / 5,000 km
NSW 10 years old / 160,000 km 3 months / 5,000 km
QLD Under 10 years old / 160,000 km 3 months / 5,000 km
Over 10 years old / 160,000 km 1 month / 1,000 km
NT 10 years old / 160,000 km 3 months / 5,000 km
ACT 10 years old / 160,000 km 3 months / 5,000 km
TAS 7 years old / 120,000 km 3 months / 3,000 km
WA* 10 years old / 150,000 km 3 months / 5,000 km
10 to 12 years old /
150,000 to 180,000 km
1 month / 1,500 km
SA** $3,001 to $6,000 2 months / 3,000 km
More than $6,000 3 months / 5,000 km
* Motor vehicles must have a purchase price of $4000 or more ** Warranty doesn't apply to cars that are sold for $3,000 or less, cars that have travelled over 200,000 km, nor cars that were first registered more than 15 years ago.

Standard warranties do not cover routine services, tune-ups, batteries, tyres and issues caused by accidents or incorrect use of the vehicle.

Tip: Check your state or territory's government website for detailed information about what you can expect when you purchase a used car from a licensed motor vehicle dealer.

What is an extended warranty?

An extended warranty gives you the chance to extend your original manufacturer's warranty for an additional period of time.

There are a range of extended warranty products available at a range of different prices, but each of these warranties also comes with different conditions and inclusions. Ideally, your extended warranty coverage should cover a wide range of your vehicle's components for mechanical and electrical failure. Other services such as roadside assistance may also be available.

Tip: It's important to fully read and understand the terms of extended warranty coverage to ensure value for money, and confirm any queries in writing.

How do they work?

A good quality extended warranty is your insurance against the cost of potential future repairs and labour.

Extended warranty coverage can be arranged at the time of purchase when you arrange your car's finance and insurance cover, or at any stage while the manufacturer's warranty is still valid. Your extended warranty begins when your manufacturer's warranty ends, so there's no overlap - you only pay for the warranty extension period.

As vehicles become increasingly complex, with sophisticated computer-assisted driving aids and high-performance engineering, repairs are also less simple. Labour hours quickly mount up, not to mention parts. Before you know it, the cost of fixing the cause of one small warning light can quickly run into the thousands.

A good quality extended warranty product will protect thousands of your vehicle's components from mechanical and electrical failure with only a minimal - or even zero - excess payable.

Benefits of an Extended Warranty

High quality Extended Warranty cover offers a number of benefits for car owners and drivers:

  • Your investment protected - know that your car is covered for a wide range of mechanical and electrical faults with little or no excess to be paid.
  • Peace of mind - opt for extended warranty cover to limit your exposure to unexpected major repairs.
  • Cover for drivers like you - pay for high or low kilometre cover - it's your choice.
  • Payment flexibility - make a single upfront payment or pay in easy monthly instalments.
  • Win-win if you decide to sell - receive a pro-rata refund for your remaining cover, or sell privately with a transferable warranty - and great resale value.
  • Rely on roadside assist - select optional roadside assistance with your extended warranty for everyday certainty.