Using my own car warranty on private 2nd hand vehicle purchase

dilby

Hi all - I'm planning on purchasing a used van which is new territory for me and a little nerve-wracking. I have been looking at private sellers only and narrowing down options, making an effort to find sellers that offer a 3rd party warranty (such as RAC) with their vehicles at an extra cost as I am likely buying from a distance so will need to be able to use other garages should anything go wrong. However these warranties seem to cost about £200 for 1 year and I've found out that you can buy them yourself for about £400 - which is a lot, but i notice i can buy vans a lot cheaper privately. So, for example, I could go on ebay, buy a van for around £2k less, then just spend a bit more on the warranty and have peace of mind. Does anyone know what I'd be missing out on if i go the private route instead of a dealer? Am I in reality as covered, or are there other perks I'm not thinking of that extra £2k or so gets me? Sorry if this is a silly question but all new to me!

Thanks

AdrianC

An aftermarket warranty really is just an insurance policy, no more, no less. You pay the premium, you (hopefully don't) claim.

What you're gambling on is that your vehicle is going to be considerably less reliable than the insurer - the warranty provider - expect. If it's as reliable, or more so, then you lose out from the warranty. After all, they make a profit from the premiums paid in, after paying out claims, marketing and staff and office and admin costs, tax...

DrEskimo

Buy privately and keep the extra cash and the warranty premium aside. Build it up each year and it's highly likely you will end up better off than purchasing a warranty.

Ectophile

Be very careful with aftermarket warranties.  They are often designed not to pay out on anything, ever.  Read every exclusion clause in the policy before you hand over the money.

For dealers, their main purpose is distracting the buyer from their consumer rights.  All the time you're arguing with the warranty company, the dealer can sit in peace.

You're probably better off putting the money in a savings account, ready to pay a local garage if something goes wrong.  And if nothing goes wrong, you get to keep the money.

born_again

Why would a private seller offer a warranty at extra cost? What s in it for them? 
That just sounds like someone selling cars pretending to be a private seller.