Though both car warranties and insurances both serve in the interest of drivers, they’re far from the same thing. They have different functions, purposes, and fulfil different needs of each kind of road user. Of course, while warranties are often colloquially referred to as ‘additional insurance’, in many respects this term doesn’t quite definite them completely either.
Consequently, let’s explore the main differences between car warranty and insurance.
Coverage
Insurance typically covers the incidents that happen by an external force; crashes, knocks and scrapes, theft, write offs, etc. It’s often priced on the habits of the driver, and even by factors such as where they park or how long they’ve been driving for. It covers all the things that happen to the driver by the behaviours and errors of others, as well as what flaws they harbour themselves.
However, warranties cover the faults that occur inside a vehicle that could not have been prevented by the owner. Faulty components and software malfunctions are covered here, so long as the owner has proven that they’ve serviced their vehicle on time and done everything in their power to keep their car in good condition. If the powers that be are satisfied, the warranty covers the expense of repairs in these situations.
Choice
Insurance is primarily built around protecting personal welfare, as well as the welfare of any passengers, including pets, and of course other users on the road. Property damage is also included. It’s designed to keep everyone completely safe, and ensure they’re compensated for physical or emotional trauma. It’s for these reasons that vehicle insurance is a mandatory requirement for any and all car owners, because it protects living beings.
However, warranties tend to be a little more flexible, simply because they don’t protect people in this way. They typically focus on the damages and faulty components of your personal vehicle alone, instead of covering people, animals and general welfare as insurance schemes would. They can be applied to newer cars specifically, or also come in the form of used car warranties so that services are always tailored to an individual’s needs, such as their finances. They’re non-obligatory, which means there’s some wiggle room with warranties, but obviously not with insurance.
Duration
Because insurance is a legal requirement in order to navigate the roads, it’s obviously a constant companion to the road user. It can’t be avoided or ignored, and those driving without the proper insurance face fines and criminal charges. There’s some wiggle room for negotiations with insurers in terms of costs, but its presence is always essential.
However, warranties typically last 3-5 years, with the option to buy an extended warranty after that time has elapsed. This can be extremely beneficial, because customers can refuse an extended warranty at point of purchase. That said, after a few years they can change their minds if their priorities have changed or now have the funds to pay for it available.