Should I buy a used car without a warranty?

Buying privately will almost certainly save you money, which is a strong temptation…

Buying a used car can be like dancing on a treacherous shore, tempted on every side by the devil (a cliché of unscrupulous used car dealers) and the deep blue sea (the great unknown and the big unwashed in the private market). .

BUY PRIVATE

Buying privately will almost certainly save you money, right here and now, which is a strong temptation, but it's important to think long term and not confuse Latin terms - carpe diem (seize the moment) sounds great in Dead Poet's. Society but beware (let the buyer beware) should be your watchwords.

WHAT SAYS THE LAW

But the one word you should take most seriously is "warranty," which in the past was very rarely available when bought privately, but guaranteed by law if you bought from a dealer. 

Buying a car out of warranty or buying a used car out of warranty is definitely something you never want to do, but thankfully a large number of car companies now offer vastly extended warranties - something that has been a game changer because you It is now possible to buy a used car that is still covered by the new car warranty.

Jack Haley, NRMA's Senior Policy Advisor for Vehicles and the Environment, says retail buyers are protected by Australian consumer law no matter how cheap the car they buy and no matter if it's new or used. 

“The law nominally says one year, but what it actually requires is that the goods must be of commercial quality, especially expensive goods such as cars, so your car should actually last for several years without any problems, and if it doesn’t, you must be insured,” he explains.

“Most car companies offer at least a three-year warranty on new cars, which essentially means that if anything goes wrong with the car, you don’t have to pay, except for items that are subject to wear or have a limited lifespan – tires, brake pads and things that wear out.

“Of course, some resellers will tell you that they offer you a one-year warranty to sweeten the deal, but really, all they do is follow the law.”

BEST MANUFACTURER WARRANTY

An exciting feature of the extended unlimited mileage warranties offered, including five years on Citroen, five years on Hyundai, Renault, six years on Isuzu (with a mileage limit of 150,000 km), and seven years on Kia, is that they carry when the car is sold by hand. 

The absolute best used car warranty in Australia right now comes from Mitsubishi, which offers a revolutionary 10 year or 200,000 km extended new car warranty. 

However, there are conditions: in order to be eligible, you must receive all of your scheduled services through the authorized Mitsubishi Motors dealer network, and certain customers such as government, taxis, rentals, and selected national businesses are excluded.

If you don't want to do this, you'll still get Mitsubishi's standard five-year or 100,000 km new car warranty, as long as the car is serviced according to the service schedule. 

A Kia spokesman said his company's proposal had significantly increased the residual value of the vehicles. 

“Not only do we offer a seven-year warranty, but also seven years of flat-price service and up to eight years of roadside assistance, as long as the previous owner had the car serviced by a registered person and used only OEM (Original Equipment) parts, then absolutely the warranty period passes to the second, and even the third or fourth owner,” he says.

"So you're looking at cars that have come out of a typical three-year lease period, listed for sale used, and they still offer more warranty coverage than some new cars."

BIG WARRANTY MEANS A BIG BUY

Haley says extended warranties have been a game changer in favor of used car buyers after the used car warranty. “In the past, you would have found it difficult to buy a used car with that kind of warranty, and when you look at the fact that the typical turnover for a new car is two to four years, you can understand that you’ll be fine with me,” says is he.

“These offerings really show the great confidence these brands have in their products because they obviously have calculated the sums of the costs and benefits and have decided that warranty claims will not cost them more than the benefit they give them in sales.”

NO WARRANTY WORTH THE RISK?

A used car warranty usually means the car will of course be more expensive, so what if you still want to bargain and forego factory coverage? One thing to keep in mind is the kilometers on the watch. International roadworthiness studies show that when a car is over six years old or over 100,000 kilometers old, you can expect major elements to need attention.

It's also always better to buy a car with a solid service history because you can track down what went wrong and how you handled it. Or, as Mr. Haley says, you can gamble if you like.

“It all comes down to the level of risk: if you find a car that appears to be in good condition, you might want to bet that it has been serviced but not by the dealer, or the owners didn't keep records,” he says. 

"The payoff is that you can get a lower price or a higher specification level, it's up to you, but we generally recommend buying with service history."

WHICH BRANDS IS BETTER TO USE?

As for which brands to look for in used vehicles, Mr. Haley recommends looking into the JD Power Vehicle Dependability, which is published annually in America and provides a rigorous and serious record of how often vehicles of certain brands break down.

Lexus was the most reliable brand in the latest survey, followed by Porsche, Kia and Toyota, while BMW, Hyundai, Mitsubishi and Mazda performed better than the industry average. The worst-performing brands included Alfa Romeo, Land Rover, Honda and, surprisingly, Volkswagen and Volvo.

VERDICT

As such, your best bet is probably to look for a used car that comes with a warranty that someone else paid for. Or jump into the deep blue sea with your eyes wide open.