What’s the Difference Between Car Insurance and a Motor Warranty?

November 24, 2020

If you are in the market for a vehicle then you will need to look at both car insurance and a motor warranty.

motor warranty

A motor warranty is given by the vehicle manufacturer and car insurance is provided by insurance companies, but you will find that some insurance providers will also sell variations of motor warranties.

A motor warranty and car insurance are different and each one of these will offer cover to protect you and your vehicle.

Let’s take a look at these two products more closely, so you can understand the difference and know what you need.

Cover the Damage with Car Insurance

With car insurance, you will pay a monthly premium. You should get car insurance as soon as you become a car owner.

Car insurance will generally cover repairs due to an accident. Depending on the cover you have chosen, the coverage amount will differ.

There are three main car insurance policies that you can choose from, those being comprehensive, third party, fire and theft and third party only.

You will need to look at all your options though, so you can choose the insurance product that suits your needs. The monthly premium will also differ and if cost is a consideration for you then you will need to get the best cover for your budget.

Comprehensive car insurance is the highest level of protection. With comprehensive car insurance, you will receive coverage for accidents, fire, theft, hijacking and damage to other parties. Comprehensive cover will cover repairs to both your vehicle and damage to third parties due to an accident.

Third-party, fire and theft covers the costs to another vehicle if you are liable for the accident and also includes cover in the case of theft and fire.

Third-party only insurance will pay for the damage to other parties if you are liable for an accident.

car insurance

Cover the Important Parts with a Motor Warranty 

A motor warranty is generally given from the manufacturer, but you can find car insurance providers offering these as well. A motor warranty is a written promise that your car parts will last for a certain length of time. If something goes wrong with your vehicle then you can have it repaired at no cost or little cost according to your warranty.

A new vehicle will come with some sort of warranty that will expire after a certain amount of years or once a certain number of kilometres has been reached.

The warranty will cover mechanical and electrical components like the engines, audio systems, sensors, fuel systems and so on. A motor warranty will not cover general wear and tear and damage that is caused by negligence.

If you decide to buy a pre-owned vehicle then you may find one that still has some of its warranty in-tact or you can opt to buy one.

A pre-owned warranty is suited for vehicles where the motor warranty from the manufacturer has expired. Investing in a motor warranty will give you peace of mind as repairs and replacements to mechanical and electrical components will be covered.  

You can also take an extended warranty from the manufacturer to protect your car against expensive mechanical breakdown.

So, What’s the Difference?

A motor warranty then protects various components in your car to ensure that it is in good running order.

Car insurance, on the other hand, offers coverage for damage caused by an accident plus cover for theft and damage caused by fire or the weather, so you don’t need to pay for these out of your pocket.  

Do you Need Both?

Having both is a good idea as they will supplement one another and offer cover for different things. For instance, if your brakes fail, which then causes an accident, the warranty will cover the brakes and your car insurance will cover any damage to the other vehicle and yours depending on the cover you have taken.

A motor warranty covers the mechanical components of your car if they were to fail and car insurance covers damages to your vehicle and others, so having both will give you complete peace of mind.

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