Do I sell my car after the warranty ends?
We explore the options to consider when your car’s warranty is due to expireThe modern car is a very complex machine, and when something goes spectacularly wrong it can cost a lot to fix – sometimes much more than the car is worth.
Horror stories about expensive engine or transmission replacements scare the willies out of vehicle owners. Within six months of the factory warranty’s expiry date, they’re tossing up whether to sell the car or pay for an extended warranty.
Even those who are aware of their rights under Australian Consumer Law are dubious about winning an argument with a multinational car company once the car’s warranty cover is out of date.
So what should you do to protect your interests?
When to keep
- Has your car been consistently reliable over the years you’ve owned it from new?
- Do you have the car regularly serviced, in accordance with its service schedule?
- Do you intend to keep driving the car within its design parameters?
- Can you afford to pay a few hundred bucks each for replacement of components like alternators, CV joints and water pumps, spread over several years?
Answer: If yes to all the above, keep the car and save the expense of an extended warranty – you probably don’t need it.
When to sell
- Has your car been diabolically fault-ridden, almost from the day you took delivery of it from the selling dealer?
- Has the car left you stranded in a remote location on one or more occasions?
- Two years into the car’s three/five/seven-year warranty, are there signs that the defects are actually increasing in number?
- Are the parts expensive to purchase?
- Is the car representative of a model line that has been badly designed and built, affecting the car’s resale value?
- Has the manufacturer of your car been taken to court in a class action for selling cars that were unfit for purpose?
Answer: Even if the servicing dealer succeeds in sorting out all the bugs before the end of the warranty period, who needs the stress of worrying constantly that your car is going to let you down later on? Best to sell it while it’s still worth something and prior to an expensive repair for which you will have to foot the bill.
When build quality isn't the problem
- Has your car been consistently prone to breakdowns since new?
- Has it been involved in a severe crash?
- Do the two appear related?
Answer: If your car has been repaired, but there are hairline fractures or fatigue in some parts, and they’re failing prematurely as a consequence of the crash, the warranty just as likely won’t cover you for the cost of replacement anyway. And while the affected parts will all be replaced eventually, there’s no telling when that might be. Best to sell the car with some warranty remaining.
When to consider extended warranty
- Has your car been generally reliable, but subject to a couple of glitches and minor faults?
- Are you reliant on this car as your family’s principal means of transport?
- Do you have paid-up roadside assistance?
- Are you confident that the brand will stay in the Australian market, providing parts and service support for years to come?
- Are the parts affordable?
- Is there aftermarket support in the form of independent workshops with brand-specific experience?
Answer: Keep the car, but consider obtaining an extended warranty. You should take into account what the extended warranty will cost you as a percentage of the projected resale value of the car in three or five years, when you might expect to sell it. It could be financially better to take a punt on the car costing little to maintain and therefore being better value without the expense of the extended warranty added. Or the extended warranty cover – provided it’s transferrable – could help you sell the car a year or so after the end of the factory warranty.
When reputation precedes experience
- Have you learned since buying your car that its brand has a reputation for poor reliability?
- Has your car been generally trouble-free during your ownership?
- Are you concerned that the car will fall in a heap the day after the factory warranty expires?
Answer: Many car companies struggle with legacy reputations dating back decades, but in a lot of cases the cars they’re building and selling today are much more dependable than products from the old days. Any ongoing shortcomings reported by consumer advocates could be specific to just one model line, not the entire product portfolio. Your car might be one of the solidly-built dependable cars in the range. Don’t offload it just because a vocal crowd of internet commentators tell you your car is headed for a catastrophic failure. Do arrange an extended warranty, however, from a reputable company.
• Check carsales.com.au for news, reviews, advice and more on your car
• Check owners’ forums on the internet, but be aware that these are places where people assemble for a good whinge
• Don’t pay too much attention to recalls as such, but do take note of an unusually high number of recalls for your model of car
• Check out consumer advocacy sites such as Canstar and JD Power, but take some of the findings with a grain of salt – disgruntled owners are not always dispassionate judges of the truth
• Ask a local mechanic with a lot of experience fixing your brand of car, but again, recognise that if they’ve fixed many cars like yours, the volume of work may colour their judgement
• Check with state motoring associations such as the NRMA, RACV, RACQ, etc.
Is your car a ‘Wednesday’ car or a ‘Friday’ car?
In the days before automated production lines, there was an analogy for cars that were lemons.
These were cars built on a Monday, when the workers were still getting over their favourite footy team’s loss in an important match, or else the cars were built on a Friday, when the workers were contemplating a big night out at the nearest pub, drinking until all hours with their mates. Either way, the workers didn’t have their mind focused on the job.
In contrast, a car built on Wednesday was the one to own.
These days, with robots now taking charge out on the factory floor, the chance of buying a ‘Friday’ car is much reduced – but not eliminated altogether.
Some brands design their cars with quality parts in mind, not the cheapest. Their logistics and manufacturing operations achieve a level of excellence for quality, and over 90 per cent of production can be labelled ‘Wednesday’ cars.
But with some brands – even in today’s world of robotised production and massive R&D budgets – your chance of buying a ‘Monday’ or ‘Friday’ car is much closer to 50 per cent.
It’s the luck of the draw, however. You could buy a car from Brand A and enjoy a trouble-free run, whereas Fred, your neighbour, buys the same model of car – based on your enthusiastic recommendation – only to find it’s a clunker from hell.
Once again, the key here is this: have you had a good run from your car since new? If so, keep it beyond the expiry of the factory warranty.
Otherwise… there’s a very useful online service available right here to help you sell your current car and move you into the next one.
Related: What isn't covered by a new-car warranty?
Related: Which car-makers offer the best warranty?
Related: Learn more about different warranty offers
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