To buy or not to buy: used car warranty in Singapore?
Aside from the lower costs, purchasing a used car often comes with several other disadvantages. Namely, the possibility of wear-and-tear problems, a whole host of costly damages such as a dead engine or a faulty gear box. These could add up, giving used car owners a huge headache and they may end up spending a lot more time and effort to salvage their purchases.
There may just be a silver lining to this seemingly gloomy situation. Just like how you would appreciate extended warranty when purchasing your hefty electronics and new cars, there are warranties that you perhaps could spend on to save yourselves from all that trouble.
Extended warranty basically covers your car after the initial warranty offered by your car’s manufacturer has expired. These would help to reduce the hefty costs that you may have to fork out in the event that a repair is required. However, car warranties are often also pricey so it is really worth it to purchase one for your used car?
When purchasing a used car, you can either buy it from a direct seller, a consignment car dealer, or a used car dealer (Read more on the differences at: Don’t buy a used car without knowing these 5 key facts).
Purchasing a used car from a used car dealer would mean that the lemon law is in place. Rather than seeing it merely as a protection, the regulation is in place to ensure a fair deal. Consumers should not misuse such regulations to try to claim all sorts of things from the used car dealers. Namely, wear and tear problems of a used car are expected and should not be demanded compensation.
With that, since consignment cars and cars from a direct seller involve the transaction between two consumers, the lemon law is not in effect. Then, in these scenarios, used car buyers may then want to consider purchasing warranties to cover themselves from major repairs.
Some used car dealers have their own workshops and may offer engine and gear box warranties for the first 3 months. This is often done as goodwill and a way to kind of encourage you to purchase from them. Others may have reputable workshops that they work with to cover you for similar engine and gearbox warranties should there be a need to. Just do note that this usually means that during that period, should there be any servicing required, you’ll have to go back to them.
And that is if you are purchasing your cars from used car dealers.
Yet there are also external used car extended warranty providers such as TrustCircle underwritten by Tokio Marine Insurance Singapore, which offer you protection for various components depending on how much you pay. They would also take into consideration of the number of years of the car and the mileage clocked. These would then be good warranty plans that used car buyers would want to consider if they are not purchasing them from used car dealers.
Selecting a used car is an art in itself too. In general, most cars are made to last and should be problem-free for 10 years unless the user abuses it! Experts in the used car market would stick to reliable cars such that during the few years that they own the used car they will face minimal if not none of the major problems. This comes mainly from the selection process of the used car and if you get a great one, then the warranty may not necessarily make sense, as you may not even need major repairs. To find out how you can better shop for a used car, read our Used Car Shopping Guide!
You may also want to find out how much does it cost to repair the major parts such as engine and gearbox overhaul, transmissions, et cetera and compare them with the price of your used car warranties to check if it really makes sense. Typically, continental car parts are also slightly more pricey than the asian cars.
Essentially, the decision whether or not to take up extended warranty is determined right from the onset as to what car that you purchase. Otherwise, if you really want to have some form of a safeguard against emergencies, then put down that extra amount for the car warranty.