A survey of 2,000 UK car owners* by Allianz Global Assistance reveals that almost half of motorists mistakenly think that extended warranty cover doesn't include the labour costs involved to conduct the repair, so are potentially undervaluing the product's benefits.
"We wanted to gain a better understanding of what motorists believe a warranty will and will not cover," says Liz Grindell, Head of Warranty at Allianz Global Assistance in the UK. "Interestingly, whilst 61% of those we surveyed correctly think failure of mechanical components is covered, it highlights that 39% don't. Furthermore, 61% of our survey respondents do not appreciate that failed electrical components could be covered, such as CD players and electric windows."
Wear and tear related claims is a further interesting point gleaned from the survey, which showed 28% of customers think wear and tear items are covered by warranty. Allianz Global Assistance, one of the UK's largest providers of manufacturer warranty schemes, warns motorists that whilst warranty schemes do offer motorists vital cover for unexpected mechanical and electrical failure, not all schemes cover payment for routine servicing items such as batteries or items that wear out, such as brake pads or windscreen wiper blades. It urges motorists to get a clear picture of the protection offered and to take advantage of the 14-day cooling off cancellation period, should they change their mind after they have bought the policy.
The findings from Allianz Global Assistance demonstrate a widespread lack of understanding of how a warranty can be a real financial lifeline when a vehicle is hit by a mechanical or electrical failure. These failures can often come with a big repair bill. To help motorists make their minds up about whether to purchase warranty, motorists should ask their local Dealer to provide some indicative repair costs in the event of a mechanical or electrical failure, such as engine failure or a faulty suspension, to get a true indication of the cost savings a warranty can bring.
"Investing in a warranty doesn't have to be expensive or considered a luxury, even for an older, higher mileage vehicle as there are a lot of flexible packages now available," concludes Liz Grindell. "As a result of our survey we are now enhancing our product wording so that consumers have more of the right kind of information to hand to help them make a knowledgeable purchase decision."
* An independent survey of 2,000 people was conducted on behalf of Allianz Global Assistance UK. The respondents represented the UK on a national level by region, gender and age. All were car owners or had the regular use of a car in the household. Company car only drivers were excluded.