Motor Ombudsman poll reveals that car owners are not up to speed on terms of extended warranties

Posted 26/03/19

• YouGov survey commissioned by The Motor Ombudsman showed that just 53% of car owners are aware that they can extend the vehicle manufacturer’s warranty once it expires
• Only a third (32%) of all respondents knew that they could purchase a policy using an independent warranty provider
• 53% of the individuals surveyed also said that they were unaware as to which components an extended warranty agreement is likely to cover if their car suffers a mechanical breakdown or an electrical failure
• Encouragingly, of those who did know that a warranty could be prolonged, nearly eight in ten (79%) were familiar with the fact that an extended warranty could be invalidated if the terms and conditions of the policy are not fully adhered to 

The number of new cars sold in the UK reached close to 2.7 million in 2016, an all-time high, and more than 500,000 of these vehicles were registered in March of that year alone. Many of these initial three-year vehicle manufacturer warranties will now be starting to expire, leaving thousands of motorists with the decision as to how and whether to continue to protect themselves against potentially costly repair bills, or risk being out of pocket.

A YouGov poll of 1,293 car owners commissioned by The Motor Ombudsman, the automotive dispute resolution provider, revealed that just over half (53%) of respondents were aware that they could extend their new car warranty when it came to an end. An even smaller proportion of all of those surveyed (32%), knew that they could purchase a policy from a third party provider to cover their vehicle for another set period beyond that supplied by the carmaker. The research also showed that male drivers, and those aged 35 years and over, are the most likely to know that an agreement can be prolonged via the manufacturer of their car, or that a new policy can be taken out using an independent warranty administrator.  

The study equally found that around one in two car drivers (53%) would be unable to name the parts of their vehicle that an extended warranty agreement is likely to pay out for in the event of a failure, such as an engine or radiator. In fact, drivers in Scotland and the 25 to 34s are the most conversant with the contents of their policy, with over 45% and 41% respondents in these groups respectively, knowing which components would most likely be eligible for repair at no cost to them in the event of a mechanical or electrical problem.

Encouragingly, of those that were aware that a warranty could be extended via a manufacturer (53%) or third party (32%), nearly eight in ten (79%) of these respondents explained that they were mindful of the fact that an extended warranty agreement could be made void if they didn’t keep to the terms and conditions of the policy. Participants aged between 25 to 44 years, and again, people living in Scotland, were the most familiar with the fact that an extended warranty policy could become invalidated, with female drivers (70%) being the least au fait with the importance of adhering to the small print.

Of the car owners who identified that a warranty policy could be contravened by not following their agreement to the letter, 82% knew that not following the prescribed car servicing intervals may prevent them from making a claim, with 77% also knowing that modifying a vehicle using non-manufacturer approved accessories could result in the same difficulty. Furthermore, the poll demonstrated that individuals are least likely to recognise that failing to follow a warranty administrator’s claims procedure would cause a contract to be nullified.

Commenting on the findings, Bill Fennell, Chief Ombudsman and Managing Director of The Motor Ombudsman, explained: “As with any legal agreement, a warranty policy must be read carefully and in its entirety by vehicle owners to ensure that they are clear as to the level of cover being provided, as well as any exclusions such as wear and tear items. Both this study, and some of the cases that we have worked on in relation to our New Car and Vehicle Warranty Products Codes of Practice, have highlighted that there remains an element of misunderstanding amongst consumers as to the availability of extended warranties, their purpose, and the protection that they provide.”

Bill added: “To increase the amount of information available to vehicle owners, and to help clarify when they will be able to make a claim, we have recently introduced a page on our website dedicated to some of the most frequently asked questions on warranties. These complement the bite-sized articles on our Knowledge Base, and the comprehensive library of online case studies. We will be looking to expand these resources going forward as they have so far proved very popular.”

To view The Motor Ombudsman’s Vehicle Warranty FAQs, visit www.TheMotorOmbudsman.org/vehicle-warranty-faqs.

To view articles on new car and extended warranties on The Motor Ombudsman’s Knowledge Base, visit www.TheMotorOmbudsman.org/knowledge-base.

ENDS

Published on behalf of The Motor Ombudsman

Notes to editors

About The Motor Ombudsman

The Motor Ombudsman is the automotive dispute resolution body. Fully impartial, it is the first ombudsman to be focused solely on the automotive sector, and self-regulates the UK’s motor industry through its comprehensive Chartered Trading Standards Institute (CTSI)-approved Codes of Practice. Thousands of businesses, including vehicle manufacturers, warranty product providers, franchised dealers and independent garages, are accredited to one or more of the Codes, which drive even higher standards of work and service, and give consumers added protection, peace of mind and trust during the vehicle purchase and ownership experience.

For more information on The Motor Ombudsman, visit www.TheMotorOmbudsman.org

 

About the Motor Industry Code of Practice for New Cars

The Motor Industry Code of Practice for New Cars ensures that vehicle manufacturers supply new cars and warranties to consumers responsibly. The Code helps to safeguard new car buyers from misleading adverts, that documentation supplied with the vehicle is easy to understand, that terms of the warranty will be respected if the car is serviced according to the recommended guidelines, and that any complaints will be handled swiftly.

 

About the Motor Industry Code of Practice for Vehicle Warranty Products

The Motor Industry Code of Practice for Vehicle Warranty Products aims to drive up standards across a wide range of automotive warranties, including coverage of both insured and non-insured products, by committing accredited businesses to higher standards than those required by law. The Code currently represents about 70% of the industry’s major providers that administer over three million products and is fully approved under the Chartered Trading Standards Institute (CTSI)’s Consumer Codes Approval Scheme (CCAS).

 

The Motor Ombudsman media contact: 

Simon Wittenberg 

PR Manager
The Motor Ombudsman 
Telephone: +44(0)20 7344 1609

E-mail: [email protected]

 

About the YouGov survey data

All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,027 British adults, of which 1,293 owned at least one car. The fieldwork was undertaken between 05 and 06 March 2019, and the survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

Highlights of research results

1.       Before taking this survey, were you aware that this agreement can either be extended at a cost to yourself or that you can purchase a warranty from a third party provider? (Please select all that apply)

a)     I knew I could extend a manufacturer's warranty agreement - 53%

b)     Yes, I knew I could purchase a warranty from a third party provider - 32%

 

2.       Which ONE, if either, of the following statements best describes your knowledge? (Please select the option that best applies) 

a)     I am aware of which parts an extended warranty agreement is likely to cover in the event of my car having a mechanical or electrical problem - 37%

b)     I am not aware of which parts an extended warranty agreement is likely to cover in the event of my car having a mechanical or electrical problem - 53%

c)      Don’t know - 9%

 

3.       Before taking this survey, did you know that an extended vehicle warranty agreement could become invalid and prevent you from making a claim if you do not keep to the terms and conditions of the policy?

a)     Yes, I did - 79%                                                                

b)     No, I didn’t - 21%      

                                                                                             

4.       Which, if any, of the following were you aware of that could invalidate the warranty and prevent you from making a claim in the event of a mechanical or electrical problem?

a)     Not following the manufacturer's recommended servicing schedule/intervals - 82%

b)     Modifying the vehicle outside the manufacturer's standard specification (e.g. fitting non-manufacturer approved accessories, fitting alloy wheels from a third party etc.) - 77%

c)      Fitting non-genuine / standard manufacturer-approved parts during repairs - 72%

d)     Ignoring any noticeable mechanical and/ or electrical faults and continuing to use the vehicle - 70%

e)     Using the incorrect fuels or fluids (e.g. oil, coolant, brake fluid, etc.) - 70%

f)       Ignoring any warning lights which have illuminated on the dashboard and continuing to use the vehicle - 69%

g)     Failing to follow the warranty provider's claims procedure - 65%

h)     Don’t know - 8%

i)      None of these - 1%

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