I have always wondered why car insurance companies don't offer coverage againts major mechanical failure. If you have comprehensive insurance and reverse into a wall causing £2,000 worth of damage, you are insured and only have to pay the excess. But if a conrod lets go in your privately purchased 1998 Peugeot 306 DT (to pick an example totally at random) you could easily be left with £2,000 worth of mechanical carnage to pay for out of your own pocket. I reckon there are plenty of people who would pay for this kind of insurance, especially with garage labour rates and parts costs getting ever more expensive.
Perhaps restrict it to maximum 10 years old / 120,000 miles, set a high excess (say £500 minimum, to stop people getting routine repairs done on their insurance) and have a requirement for proof of regular servicing. Major mechanical failures aren't all that common, so the insurers should be able to make good money out of it, and it might even bring normal car insurance premiums down a bit, for those of us whse cars are too old to be worth taking out this kind of policy, even if we could get cover.
Richard Hall
bangernomics.tripod.com
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"Perhaps restrict it to maximum 10 years old / 120,000 miles"
You mean only late model low mileage vehicles?
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Parp, Parp!
Note: All Toad posts come with an implied smiley.
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Insurance companies do offer such a thing and call them extended warranties. They normally must be taken up immediately following on from the expiry of the manufacturers warranty, and are subject to conditions on the servicing, mileage etc. If you buy a used Nissan from a Nissan dealer, you will get 1 year cover included, and can extend it for about £500 per year.
Obviously on average the insurance company wins, else they wouldn't be doing it.
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Daily Telegraph has carried adverts for this sort of insurance and I think I have seen it in the Civil Service Motoring Assoc magazine too. It certainly exists - finding it may be a bit of a trick
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Back to the old question are warranties worth it? Given the examples £500 pa for 4 years = £2k for the suggested repair. I'd rather keep the £500 pa and pay up IF something went.
That way if it doesn't, Im £2k richer after the 4 years!
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R,
We have that here - if you buy pre-owned, it is a prerequisite of the finance deal.
The price is nowhere near 500 quid though! I think mine was a one-off payment (spread over the repayment period) of R400 (ie 25 quid!)
Covers all major mechanicals, but proff of servicing (every 10 000k or 1 yr, whichever is soonest) must be posted to them.
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I wasn't really thinking in terms of a conventional warranty. I reckon if the starter or wiper motor packs up on a six year old car, that's part of the cost of running second hand vs new. But if you have an engine or gearbox blow up on a well-maintained car with a five figure mileage (which in my opinion shouldn't happen, but does), you could easily end up paying more than the trade-in value of the car (before it blew up) to have it fixed. For a lot of people, that sort of major mechanical catastrophe would be worth insuring against, especially if it is not expensive, and even more especially if the car is one year into a four year HP agreement. I would reckon around £120 a year max, which should make plenty of money for the insurers.
Richard Hall
bangernomics.tripod.com
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and who would insure vectras against cam belt snapping ? which is more common than a sensible politician
really obvious commons design flaws/manuf defects should be handled under consumer law and the makers shouldnt get away with it
BTW what exactly is wrong with all thos Ford KA's that have been recalled with brake probs ?
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You're right - the makers shouldn't get away with it. But the insurers will seek to recover their costs, and a big insurance company has a lot more clout than a single motorist - especially if they are handling a whole lot of claims for identical failures, and can see a pattern developing. I would guess that the manufacturers won't want their cars blacklisted by insurers, since it wouldn't do their image a lot of good.
Richard Hall
bangernomics.tripod.com
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Another option might be full service leasing, one which I would consider next time I change my car (probably about 5 years hence!)
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