It’s a familiar dilemma for used car buyers. You’re buying a new motor and you want some reassurance that it’s going to do what you’ve bought it for. But is a warranty the answer?

What is a warranty?

The idea behind used car warranties is similar to any other insurance. You pay a premium, then in this case, if your car has a major mechanical malady whoever sold you the warranty pays for the repair. Warranties typically cover non wear and tear items, which excludes things you have to replace periodically such as tyres and batteries.

All new cars come with warranties. Most are for three years but some last for five and Kia gives its cars a warranty for seven years. When you buy a used car, if you do so from a manufacturer’s approved-used scheme, you’ll often get a year-long warranty. More usually, used car warranties from dealers are for three months.

Why are used car warranties a good idea?

For a start it enables you to budget. You know that you’re paying so many hundred pounds per year but that you won’t be hit with any mega and unexpected bills. That kind of peace of mind is certainly worth a price. Get the right warranty and it’ll mean you won’t have any dealings with garages; the warranty provider will do that for you.

Why warranties aren’t such a good idea

Like any insurance, if you don’t make a claim, it’s money down the drain. And unlike motor insurance, you don’t need to have a warranty.

Think about your car for a moment. How old is it and does it have a history of unreliability? Find out more at the reliability index here. Equally, the older the car, the more likely it is to fail. But warranties tend not to cover vehicles that are more than 10-years old or that have covered more than 100k miles.

You also need to be careful of the kind of warranty you get. There are a lot out there with clauses in them designed to prevent the provider coughing up. You want a warranty that guarantees it’ll pay out an unlimited sum. Otherwise you’ll have to fork out for contributions to more expensive repairs.

You also want a warranty that covers consequential damage. Cars are very complicated things involving multiple components working together. One part failing can cause damage to others. You don’t want a warranty that just covers replacing the initial part.

What’s the answer?

Taking out a warranty is a gamble. You may be quids in. But chances are you won’t be. If warranty providers were constantly paying out more than the premiums they get in, it wouldn’t be the lucrative business it plainly is.

If you do decide on a warranty, it’s well worth examining the terms and conditions to find out exactly what is covered. Warranty providers are famous for the old cliché of giving with the large print and taking away with the small.

One answer is rather than forking out for a warranty, why not do your own? Warranties usually cost a couple of hundred quid a year. Assuming you don’t have any major mechanical mishaps initially, after two or three years you’ll have built up a decent sized pot that will cover most eventualities.