Buying a car (unless you’re buying it cash) comes with a great deal of paperwork – and we know what that means – terms and conditions.
The majority of South African car buyers fail to understand vehicle after-sales plans, the differences between the three, or even know what plan they signed up for.
- Click here to find out more about Budget Insurance.
If you’re thinking of, or are in the process of buying a car, this quick and easy guide will help you understand the difference between a service plan, a maintenance plan, and a motor warranty.
There’s no need to get complicated in order to make the right buying decisions, all you need is a little basic knowledge.
What is a motor service plan?
New cars usually come with a service plan valid for a period of time typically between three to five years or 50 000 to 100 000km, but this varies depending on the car model and the manufacturer.
Second-hand cars usually come with the balance of their original service plan and can be extended beyond the initial term date, should you wish.
- Typically covers your regular scheduled car services as determined by the vehicle manufacturer. This usually includes labour and replacement of parts such as air/fuel/oil filters, lubricants, and spark plugs.
- Typically does not cover wear and tear and mechanical breakdown. It usually excludes replacement of trim, bodywork, or paint; glass, tyres, wheels and wheel alignment; accessories, and electrical wiring.
- How it works: Can be purchased upfront, or in monthly instalments. Covers the prescribed services with a limited lifespan. A vehicle service must be performed on schedule every year or at specified distances, whichever comes first, and only at dealer-franchised or approved workshops. Should you deviate from these specifications your service plan will become invalid.
- Why get it: Offers peace of mind and you don’t have to worry about the added expense of regular servicing.
What is a maintenance plan?
A more comprehensive option than the service plan, typically, a maintenance plan covers wear and tear, mechanical and electrical components, and routine servicing.
Often included when you buy a new car, they are valid for a specified period, but you can purchase a maintenance plan separately or choose to extend it.
If you buy a second-hand car and it is still covered under the original maintenance plan, the cost will be built in.
- Typically covers labour, repair, and replacement of mechanical and electrical parts, servicing, maintenance, and wear and tear of your car. Parts may include items such as engine, gearbox, clutch, exhaust, brake pads, filters, wiper blades, fuses, globes, and spark plugs.
- Typically does not cover tyres, wheel alignment and balancing, windscreens, and major unexpected mechanical breakdowns and electrical failures.
- How it works: Can be purchased upfront, or in monthly installments. Covers the prescribed services with a limited lifespan. A vehicle service and necessary repairs must be performed on schedule every year or at specified distances, whichever comes first, and only at dealer-franchised or approved workshops. Should you deviate from these specifications your maintenance plan will become invalid.
- Why get it: A convenient way of budgeting without the worry of servicing, maintenance, and major repair costs. Especially useful if you plan on keeping your car for a long period of time, and for older model cars that tend to require more maintenance.
What is a manufacturer warranty?
A warranty is different from a service or maintenance plan because this is a manufacturer’s guarantee that the parts of the vehicle you bought are in proper working order, correctly fitted, and won’t give you problems.
There are three types of warranties – manufacturer, extended and pre-owned
Manufacturer – comes with the vehicle on purchase.
When it expires – Extended Vehicle Warranty – extension of the manufacturer warranty – need to get this just before it expires.
Pre-owned – once extended warranty runs out, or if the vehicle didn’t get an extended warranty when the manufacturer one runs out.
So while the maintainance plan deals with servicing and maintaiance with, a motor manufacturer’s warranty deals with mechanical defects or improper installation that occurs at factory level.
If parts fail or malfunction, the warranty covers you for the cost of labour and parts.
- Typically covers major parts and labour for components such as engine, clutch, gearbox, exhaust system, suspension, transmission, electric components, fuel system, audio system, and sensors. Some warranties also cover the body and paintwork but only under specific conditions.
- Typically does not cover high-friction type items like tyres, brake pads, and clutch components.
- How it works: A motor manufacturer’s warranty is included with all new cars sold and generally covers all the major high-cost parts and repairs. They have a limited period, which can be extended or replaced with an equivalent once their initial term has expired – an example is our Extended Vehicle Warranty. As the owner you can claim for labour and parts due to manufacturer faults that occur during normal use, within a specific mileage, and given that the car was not misused.
Make sure to only use authorised franchised dealers to undertake the repairs or your warranty will become invalid.
- Why get it: Major parts are high-cost items. If they are defective, these will be replaced or repaired at no cost to you – without it, it won’t matter how well you treat your car, this cost will come out of your pocket.
If your Extended Warranty runs out then you can take out our Pre-Owned Vehicle Warranty.
Conclusion
Automotive plans differ between insurance providers, and so do the conditions and requirements of car manufacturers.
Before signing on the dotted line, make sure that you’ve been sold the motor insurance plan suitable for your needs, that you understand fully what’s covered and what isn’t, how to claim, how claims are paid, and what the limits are. Be sure to read the fine print.
Click here to find out more about Budget Insurance, an authorised insurer & FSP.
Keyword: Buying a Car: Which Motor Vehicle Insurance Plan?