Extended warranty: Do dual cabs need cover?

The dual-cab one-tonne pick-up (or 'ute') is the flavour of the month for families who want it all – a tow vehicle for the horse float or ski boat, and a family car throughout the week.

But buyers should be aware of trusting to the reputation of these vehicles for durability and longevity, particularly if the vehicle the buyer plans to purchase is not a new car.

Many families are buying dual-cab utes for their versatility, but if they're buying a used car and there's no factory warranty coverage, any major breakdown will likely be very expensive.

These vehicles are often purchased for their can-do nature – able to leap tall sand dunes in a single bound – but they may have already worked a hard life before reaching the used car market.

Some owners buy the dual-cab ute new and then subject them to tough working conditions and minimal servicing. Then, when the first owner is done with the vehicle it's scrubbed up to appear in good condition. The second owner may very well pay through the nose for the first owner's lack of proper care.

That's the key. Like any used car, a dual-cab ute being sold to its second owner may have already exhausted eight of its nine lives. Condition is important, but even a full inspection prior to purchase may not pick up some of the problems that can occur long after the factory warranty has expired. An extended warranty could prove to be invaluable, even for a vehicle like a dual-cab ute, the sort of vehicle that has such a well-established reputation for durability.

With some 4x4 dual cabs now powered by twin-turbo four-cylinder diesel engines, and driving through eight or even 10-speed automatic transmissions, the cost of repairing major components could be sky-high. Nobody wants to have to pay cash to fix a major problem with the car when an extended warranty would cover that cost.

The price of labour alone, to remove and recondition one of these engines will be in the thousands – which would be a nasty shock for families on a budget. And if families opted not to buy a new car in the first place, it goes without saying that reducing expenditure is reason enough for purchasing an extended warranty.

To illustrate, one owner has made three separate claims for the same vehicle, a Ford Ranger. That particular vehicle required work to fix the suspension, engine gaskets and fuel injectors. The total cost to the owner would have been in excess of $7000, which is at least 10 per cent of its new car price, as a minimum, but the extended warranty insurer covered the cost.

In another case, replacing the injectors of a Nissan Navara was a repair incurring an extended warranty claim for $4500, and multiple claims for a Holden Colorado (exhaust, cooling system and electrics totalling $5500) have also been met by the extended warranty underwriter. And the owner of an Isuzu D-MAX had $2500 worth of work done to rectify a suspension problem, all paid for through the owner's extended warranty coverage.

It's not unusual for the same vehicle to incur multiple extended warranty claims, and the alternative for the owners would be days or even weeks of downtime to save the money for the cost of repair.

And that's far from ideal when the kids are walking everywhere, the horse is standing around in a paddock and the ski boat remains parked on a trailer in the driveway.

So an extended warranty can save the ute owner a lot of money, but there's also one final point to bear in mind. Many common component failures should be rectified by the importer and its dealer network at no charge to the owner of the vehicle, according to the Australian Competition and Consumer Commission. That would hold true even beyond the expiration of the standard factory warranty.

The ACCC is the watchdog that enforces compliance with Australian Consumer Law (ACL), which stipulates that the 'rejection period' for a claim from a consumer may exceed the duration of the factory warranty.

In other words, if the turbocharger for your diesel ute blows up three days after the end of the factory warranty - and provided there's no reason for the manufacturer to suspect your vehicle has been subjected to abnormal use (abuse) - the cost of repair is to be born by the importer. That's what ACL tells us, but the rejection period hasn't been tested in courts of law. So if the turbocharger dies two years after the expiration of the warranty period, ACL may not provide the protection the ute owner requires.

At that point, the owner's only option - in the face of the importer and its dealer rejecting the claim - is to take them to court. Dragging a car company or a dealer through a civil and administrative appeals tribunal over a period of months, costing the owner a legal adviser to assist with the claim - only to have the claim rejected by the tribunal anyway - is when an extended warranty really pays for itself.