Vehicle warranties, maintenance and service plans are not all created equal

21 Oct 2024

Vehicle sales reps talk about the various car plans as if they’re interchangeable, but they cover different defects and operational costs.

The cost of a car goes far beyond the instalment you pay to the bank, the fuel you need to keep it running and the insurance to cover any accidents – maintenance can be a real schlep.

If you are about to buy a car or even if you have a slightly older second-hand one, it’s important to understand the difference between a warranty, a service plan and a maintenance plan.

Warranty: Manufacturers usually provide a warranty on a new vehicle that should cover any manufacturing defects in the original components – mechanical or electrical – for a certain period after the purchase date. The warranty might be in force until you reach a certain mileage or for a specified number of years. For example, you could get a warranty valid for five years or 150,000km, whichever comes first. Warranties usually cover repairs to parts such as the gearbox, water-cooling system or head gasket and other large parts of the engine.

Service plan: Lebogang Gaoaketse, WesBank’s head of marketing and communications, says a service plan covers scheduled services, but it will not cover mechanical failure or wear and tear. Costs that would typically be included are the replacement of air, oil and fuel filters, lubricants such as oil, spark plugs and coolant.

Maintenance plan: A maintenance plan covers the cost of regular services –including labour – as well as repairs to parts caused by wear and tear. It provides cover for parts such as brake pads and discs, shocks absorbers, the battery, windscreen wipers, globes and fuses.

Accident damage: This is not covered by any of these and means you need to claim from your insurer.

Voices unplugged

Readers of the Money Cents newsletter had this to say on the topic of car warranties, service plans and maintenance plans.

Gary said it’s unethical how sales reps of both new and used cars talk about these plans in the same sentence when they mean completely different things. “I see no effort made by these salesmen to differentiate or explain the differences. This causes the consumer to believe they have bought a favourable plan.

“But when a problem occurs, they have not actually bought the correct plan with a new or used vehicle. There needs to be specific guidance for the consumer that is clear, concise and easily understandable. No elaborate and long legal jargon,” he said.

Sean had some tips to share. “When buying a car, look for the vehicle with the longest maintenance plan,” he said, adding that some of the more expensive cars sometimes have longer maintenance plans.

If you opt for a more reasonably priced second-hand car, Sean recommends buying a model with low mileage that is still on the service plan. “If the vehicle is still on the plan, the dealership allows extension of the plan at a cost. This plan extension can be done just before it expires – so there’s a benefit for cash flow in that you don’t have to pay upfront,” he said. DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.

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