Buying a car: Which motor vehicle insurance plan?

Service plan vs Maintenance plan vs Motor warranty

Buying a car (unless you’re buying cash) comes with a great deal of paperwork – and we know what that means – terms and conditions.

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The majority of South African car buyers fail to understand vehicle after-sales plans, the differences between the three, nor even know what plan they signed up for.

If you’re thinking of, or in the process of buying a car, this quick and easy guide will help you understand the difference between a service plan, a maintenance plan, and a motor warranty.

There’s no need to get complicated in order to make the right buying decisions, all you need is a little basic knowledge.

What is a motor service plan?

New cars usually come with a service plan valid for a period of time typically between three to five years or 50,000 to 100,000km, but this varies depending on the car model and the manufacturer.

Second hand cars usually come with the balance of their original service plan, and can be extended beyond the initial term date should you wish.

• Typically covers: Your regular scheduled car services as determined by the vehicle manufacturer. This typically includes labour and replacement of parts such as air/fuel/oil filters, lubricants, brake pads, wiper blades, globes, fuses, and spark plugs.
• Typically does not cover: Wear and tear and mechanical breakdown. It typically excludes replacement of trim, bodywork, or paint; glass, tyres, wheels and wheel alignment; accessories, and electrical wiring.
• How it works: Can be purchased upfront, or as a monthly instalment. Covers the prescribed services with a limited lifespan. A vehicle must be performed on schedule every year or at specified distances, whichever comes first, and only at dealer-franchised or approved workshops. Should you deviate from these specifications your service plan will become invalid.
• Why get it: Offers peace of mind and you don’t have to worry about the added expense of regular servicing.

What is a maintenance plan?

A more comprehensive option than the service plan, typically, a maintenance plan covers wear and tear, mechanical and electrical components, and routine servicing.

Often included when you buy a new car, they are valid for a specified period, but you can purchase a maintenance plan separately or choose to extend it.

If you buy a second hand car and it is still covered under the original maintenance plan, the cost will be built in.

• Typically covers: Labour, repair, and replacement of mechanical and electrical parts, servicing, maintenance, and wear and tear of your car. Parts may include items such as engine, gearbox, clutch, exhaust, brake pads, filters, wiper blades, fuses, globes, and spark plugs.
• Typically does not cover: Tyres, wheel alignment and balancing, windscreens, and major unexpected mechanical breakdowns and electrical failures.
• How it works: Can be purchased upfront, or as a monthly instalment. Covers the prescribed services with a limited lifespan. A vehicle must be performed on schedule every year or at specified distances, whichever comes first, and only at dealer-franchised or approved workshops. Should you deviate from these specifications your service plan will become invalid.
• Why get it: A convenient way of budgeting without the worry of servicing, maintenance, and major repair costs. Especially useful if you plan on keeping your car for a long period of time, and for older model cars that tend to require more maintenance.

What is a motor warranty?

A warranty is different from a service or maintenance plan because this is a manufacturer’s guarantee that the parts of the vehicle you bought are in proper working order, correctly fitted, and won’t give you problems.

So while the former two deal with the normal wear and tear of a car over time, a motor warranty deals with mechanical defects or improper installation that occurs at factory level.

If parts fail or malfunction, the warranty covers you for the cost of labour and parts.

• Typically covers: Major parts and labour to items such as such as engine, clutch, gearbox, exhaust system, suspension, transmission, electric components, fuel system, audio system, and sensors. Some warranties also cover the body and paintwork but only under specific conditions.
• Typically does not cover: Typically not covered are high friction type items like tyres, brake pads, and clutch components
• How it works: A motor warranty is included with all new cars sold and generally covers all the major high-cost parts and repairs. They have a limited period which can be extended or replaced with an equivalent once their initial term has expired. As the owner you can claim against labour and parts due to manufacturer faults that occur during normal use, within a specific mileage, and given that the car was not misused.
  Make sure to only use authorised franchised dealers to undertake the repairs or your warranty will become invalid.
• Why get it: Major parts are high-cost items. If they are defective, these will be replaced or repaired at no cost to you – without it, it won’t matter how well you treat your car, this cost will come out of your pocket.

Conclusion

Automotive plans differ between insurance providers, and so do the conditions and requirements of car manufacturers.

Before signing on the dotted line, make sure that you’ve been sold the motor insurance plan suitable for your needs, that you understand fully what’s covered and what isn’t, how to claim, how claims are paid, and what the limits are.

Be sure to read the fine print.

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