The difference between car Insurance and warranties

    Red car collides with yellow vehicle

    There are many aspects to car ownership which can make it confusing particularly if you are a new motorist. One area which many people struggle with is the difference between insurance and a warranty – this is important because the two are actually very different and understanding both will put you in the best position to protect yourself and save money.


    Car insurance is a legal requirement and there are a few different levels of cover:

    • Third Party Only: This is the most basic level of coverage which will pay for damage to other vehicles, damage to property or any people or animals if you cause an accident.
    • Third Party, Fire & Theft: Covers the above with extra protection if your automobile is damaged by fire or stolen.
    • Comprehensive: A Comprehensive insurance policy covers you for all of the above along with damage to your own car even if the accident is your fault. There are normally extras such as windscreen damage too.

    One optional extra to consider is breakdown cover. This will cover the cost of getting rescued on the roads if you were to encounter any issues.


    A warranty, meanwhile, will cover the cost of labour and repairs if your automobile has an electrical or mechanical breakdown. When the vehicle is brand new it will be covered by the manufacturer warranty which usually lasts 3 years or 60,000 miles (although some are longer).

    Once this finishes, a motorist could go without a warranty and risk having to pay for repairs themselves, or they can take out an optional extended warranty. You can get a brand-specific warranty, such as an Audi warranty, from a specialist which will include the cost of repairs, labour and potential extras like the cost of a hire car, recovery etc. A warranty is not a legal requirement but it is a smart investment to make as breakdowns can occur at any moment and repairs can be costly (particularly newer cars with more technology).

    As you can see, there is a big difference between an insurance policy and a car warranty. One is a legal requirement and the other is optional, but even though it is not a requirement it should still seriously be considered by any motorist as you do not want to have to foot the bill if the car breaks down. With both types of car insurance, the key is to shop around to find the best deals and the best level of cover.


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