The CEO of Warranty Solutions Group (WSG) recently provided an opinion that self-funded warranties are more costly for traders than traditional third-party warranties, such as WSG.
In the usual Lawgistics style, we reviewed the warranties promoted on WSG’s website to see what their warranties do cover in comparison to the statutory rights that consumers have under the Consumer Rights Act 2015 (CRA 2015).
As with most third-party warranty companies, WSG provides three levels of cover depending on the age and mileage of the vehicle – Platinum (up to 7 years or 70,000 miles), Gold (up to 10 years or 100,000 miles), and Silver (cars of any age or mileage). In comparison to our earlier review of Warrantywise, WSG’s Silver cover is not limited by age or mileage.
WSG’s Silver package provides a list of parts including the engine, drive system, clutch, braking, steering, cooling system, suspension, electrical, fuel system, and wheel bearings. Each part lists the components within those categories that are covered. Most importantly, and potentially the most expensive claim any car owner would face, is for the engine.
WSG’s engine cover states: ‘‘All major internal moving parts of the engine and the camshaft timing belt/timing chain and tensioners, providing the manufacturer’s replacement recommendations have been complied with and it is free from oil contamination.’’
Under the CRA 2015, should an issue come about due to an oil leak or develop as a result of an oil leak that was present or developing at the point of sale, traders are at risk of being liable to repair the vehicle as a remedy. Depending on the value of the vehicle, the repair could be uneconomical to be carried out and in that case, the consumer can request a rejection of the vehicle, leaving the trader without the purchase monies and with a “lemon” back in their stock.
Looking at the Platinum cover, WSG claims that this and the Gold option provide cover for around 6,000 components, to give the consumer peace of mind.
As electric vehicle (EVs) usage becomes more commonplace and given the relative age of the EVs on the road, they are likely to have Platinum or Gold cover. A potentially astronomical cost of repairing an EV is arguably having to replace the battery. Although WSG specifically states on the warranty cover list that battery cover is included for the first six months of cover, this excludes both EVs and hybrid vehicles.
To replace an EV battery may cost an average consumer up to £15,000 and could force consumers to claim on their insurance (if this is an option for them).
In contrast, if the evidence supports that an issue with EV battery was present or developing at the time of sale, the trader will be footing the bill.
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Whilst thankfully, EV battery replacements are not commonplace, it is still a consideration when owning an EV vehicle.
WSG also provides a list of parts that are excluded across all three packages. Whilst some are in line with what the CRA 2015 would not cover, i.e., consumers putting the incorrect oil or fuel in the vehicle, there are other components that may be covered which a trader may need to provide a remedy for. These are mainly contained in WSG’s Ancillary Items list which states:
‘‘water ingress, corrosion or oxidisation, faulty workmanship or parts, manufacturer recalls, accidental damage to radiator and A/C condenser, exhaust systems, exhaust manifolds, emissions, carbon build-up, repairs to rectify issues such as high oil consumption or poor fuel economy, oil or fluid contamination including staining or misting, sludge/silt or other waste, waste disposal, key blades, sealing materials and compounds.’’
A lot of the above could be covered under a consumer’s statutory rights, but they are not covered under any of the packages provided by WSG.
As with most of the warranties we have reviewed, WSG’s options are limited in going above and beyond a consumer’s statutory rights and also limit claims in other areas that would ordinarily be covered. However, with that being said, they do cover vehicles of any age or mileage which is more than some other warranty companies offer.
As for insurance warranties being a cheaper option to self-funded schemes… we see clients saving 75% of what they were spending with insurance warranty companies.