Cars or any vehicles don’t come at cheap prices; many even consider it as a major investment. Although their value rapidly decreases, the investment comes in the form of a better quality of life and convenience. Australia offers a variety of car finance deals to help you obtain the car of your dreams or at least the car that you need. But this does not make them any cheaper; car financing can only make purchasing a car more manageable in terms of payment terms. However, it does not change the fact that you will be committed to making monthly payments for your vehicle for years.

Since it is clear that acquiring a new car is no joke in terms of financials, you need to take your time, do your research, and analyse your options carefully. One of the crucial factors that you should understand is the car warranty. It should also be one of your deciding factors. Why? Well, what if your audio system shuts down? What if some features of your car malfunctions? If something goes wrong with your new vehicle, will you be able to make claims for repair costs? It all depends on your car’s warranty. And unfortunately, not all car warranties are created equal– so choose wisely.

What is a Car Warranty?

Regardless if you opt to buy your car via a car finance deal or other means from any licensed dealerships in Australia, the vehicle is typically covered by a warranty. What is a car warranty and why do you need it?

Again, car warranties can help you if something goes wrong with your new car. For instance, if your car had mechanical or design issues within a certain period after buying it, your warranty can help you cover the expenses incurred for both parts and labour . The car warranty can either come from the manufacturer or the dealership.

What is a Manufacturer Warranty?

A manufacturer warranty is defined as “a promise about what the supplier or manufacturer will do if something goes wrong” by the ACCC. However, manufacturer warranties come with conditions and a time limit. By conditions, it means that there are only certain circumstances that these warranties can cover. These conditions set what the warranty can cover and what consumers can claim.

This general definition serves as a basic principle of manufacturer warranties, but as mentioned previously, not all warranties are created equal. You will find that a warranty can significantly vary from one brand to another.

What is a Statutory Warranty?

Let’s say that your car doesn’t have a manufacturer warranty, but you did buy your car from a licensed car dealer in Australia– you need to ask if you are covered by the statutory warranty. 

A statutory warranty is mandatory for licensed car dealers or manufacturers in Australia. This type of warranty is offered by a licensed dealership for free. Much like the manufacturer warranty, statutory warranty offers to cover some of the repair expenses for mechanical issues in a newly purchased vehicle.

This type of warranty is regulated by state and territory governments. What does this mean? You may have some conditions that are dependent on your location. Statutory warranties also tend to be available at a shorter duration compared to manufacturer warranties.

Fun Fact:

If you are planning to get yourself a luxury car, keep in mind that most luxury brands have shorter warranty periods.

However, regardless if you are getting a luxury brand or not– researching your warranty options comes a long way. Understanding what your choices are will help you ensure that you are getting the best deal possible.

Car Finance Deals and Car Warranty FAQs for New Car Buyers

Buying a car takes a lot of planning. At this point, you may already have an idea what model, type, and build you want for your new mechanical steed, however, do you know what to ask for the best suitable warranty for your big purchase?

Aside from the duration and the coverage, here are the most frequently asked questions about car finance deals and car warranties:

How long is the ideal minimum duration for a warranty?

As mentioned above, warranties vary from one brand to another– and it will also be different from one dealership to another. For instance, generally, manufacturer warranties are available from 3 years to 7 years or 100,000 kilometres. 

Keep in mind that the Australian Consumer Law applies to car purchases; it is not limited to just goods or services. Your newly-bought vehicle is expected to be of acceptable (if not great) quality. It must be safe to use, durable, and free from issues.

One more thing to remember, your car warranty and ACL protection does not cover wear and tear damages. They will also not cover issues from neglect.

What should the car warranty cover?

As already mentioned, car warranties will not cover damages due to wear and tear, or neglect. But your warranty will cover any mechanical issues due to defective design or faulty car parts. 

Depending on the type of warranty, it may also cover roadside assistance and towing costs. However, do not get the idea that your warranty will cover ALL the costs. There are limits or maximum amounts on the things your warranty can cover. This reason is why you should thoroughly review warranty inclusions and fine prints.

What is considered as wear and tear damages?

Wear and tear damages include any issues that arise due to the age of your car. For example, if you have been driving your car for 3 years, you cannot expect its tires still look plump and brand new. Another example is any burns, tears, or discolouration on your car upholstery due to years of sun exposure or other quality-altering factors. These are considered as wear and tear damages, therefore, they are not covered by your warranty.

Aside from wear and tear damages, your car warranty will also not cover damages due to human error. Some examples are scratches due to careless driving. For human error damages, you will want to check your car insurance for coverage. Depending on your car finance deal or the licensed car dealer in Australia, their deals may also include insurance. But again, this is something that you should ask, study, and understand.

Do warranties cover used cars too?

Yes. However, used cars tend to have shorter warranty duration. On top of that, it is highly likely that you’ll get the warranty from the dealer, not the manufacturer. 

As mentioned previously, licensed dealerships in Australia must offer statutory warranty to their clients especially if the car is out of its manufacturer warranty period.

Statutory warranties typically last for three months for used cars that are less than 10 years old. However, the period and criteria for this kind of warranty generally depend on your state– meaning, it varies from state to state.

Should you get extended warranties?

This detail depends on you and the warranty that comes with your car. If you are buying a new vehicle, chances are that it comes with a manufacturer warranty that lasts for a considerable amount of time. If you want to get extended warranties, you should consider when to expect your car to be more susceptible to breakdowns and damages.

One more thing, you need to confirm whether the warranty offered is from the manufacturer itself or the dealership. Keep in mind that some dealer warranties are not as good as the manufacturer warranty. Pay attention to the details.

You also need to analyse, study, and understand the conditions for extended warranties. Keep in mind that these are often structured like an insurance policy. So they may require you to comply or attain certain conditions before you can enjoy its benefits.

Look for important details like terms and conditions, exclusions, claim limits, etc.

One more thing, if you don’t plan on keeping a vehicle for too long– then maybe you shouldn’t sign up for an extended warranty term, because you will have to go through some extra steps if you end up selling your car before your warranty ends.

Can you transfer extended warranties?

There are cases when you need to sell your car, manufacturer warranties may be transferred, but what about the extended warranties?

Unfortunately, extended warranties are typically non-transferrable. Unlike manufacturer warranties that automatically transfer to the new owner, extended warranties cannot do the same thing. 

So, what can you do about it? You can cancel your extended warranty and claim the refund for any coverage left. However, you must keep in mind that much like a car loan, some dealership will require you to pay an early cancellation fee. So you must read the fine prints when looking to get an extended warranty. This step will help you prepare for cases when you need to sell your vehicle when it has an extended warranty.


Car warranties can protect you from unnecessary expenses due to faulty car design or defective car parts. Regardless if you got your car with the help of a car finance deal or other methods, you should make sure that you understand the coverage and inclusions of your warranty. You need to understand the difference between a manufacturer warranty from statutory and extended warranties.

Again, not all warranties are created equal. They don’t only vary from one brand to another, the terms and conditions can also vary from one state to another. Make sure to do your research to avoid issues with your vehicle warranty in the future.