Common myths and misconceptions about car warranties in India

By Sujeet Nair

Many Indian consumers find it challenging to differentiate between car insurance, car warranties and car repair packages when it comes to buying a car. There are numerous false beliefs, such as the idea that service packages cover the same ground as warranties or that having car insurance negates the need for a warranty. As a result of this uncertainty, owners may experience unexpected repair costs and interruptions to their driving experience. Let’s debunk these myths and highlight the unique and critical role that warranty, insurance and service plans all play in ensuring complete protection.

Myth 1: Car warranty and insurance are the same thing

The idea that if insurance is in force, a car warranty is not necessary is one of the most common misunderstandings. Many car owners believe that since insurance covers damage to their car, it also covers internal problems such as electrical or mechanical problems. However, this is not the case at all.

• Only in the event of an external incident, such as an accident, collision or theft, Is car insurance becoming essential? It acts as a financial safety net for damage caused by these events.
• On the other hand, car warranties are not affected by collisions. Even if there is no accident or external damage, they cover internal component failures, including engine problems, electrical problems or air conditioning failures.

Example: For example, if you are on a long family trip and the air conditioner suddenly stops working. Insurance won’t help here because it’s not an accident-related problem. However, an active warranty covers the repair so you don’t have to pay out of pocket.

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Myth 2: Warranty is not necessary if you are insured

• Another common misconception is that having car insurance does not negate the need for a warranty. In reality, warranties and insurance work together to provide different types of coverage.
• Only external hazards, such as theft or accidents, are covered by the insurance. Your insurance will not pay out if the cause is internal, such as a gearbox failure.
• A warranty guarantees that problems caused by electrical or mechanical faults will be resolved without attributing them to other circumstances.

Combined, insurance and warranties provide complete protection and protection against both internal and external threats. Since neither on its own can cover every situation, luxury car owners can rely on having both.

Myth 3: Service packages and warranties are the same

Many owners mistakenly believe that regular maintenance contracts cover parts repairs, confusing service packages with warranties. The cost of repairing or replacing defective parts is not covered by service packages, which are limited to standard maintenance tasks.

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Service packages and warranties differ in the following ways:

Routine maintenance, including tire rotations, inspections and oil changes, is covered by service packages. While catastrophic repairs or part failures are not covered, they do guarantee that your car will remain in good condition.

Warranties provide protection for electrical and mechanical components against failure or defects, allowing replacements and repairs to be made at no additional cost.

Simply put, warranties protect you against unforeseen repair costs, while service packages ensure your car stays in good condition.

Why a warranty and insurance are necessary for total protection

Understanding that insurance and warranties are not interchangeable, but complement each other to provide comprehensive coverage, is critical to properly protecting your car.

Accidents, collisions, theft and other external hazards are covered by the insurance.

Internal mechanical and electrical problems are covered by the warranty, even if there is no accident.

Routine maintenance is covered by the service packages, but malfunctions or defective parts are not.

Both insurance and warranty are essential for luxury vehicle owners, especially those who drive vehicles like Mercedes-Benz, BMW, Audi or Land Rover. Each has a specific function and guarantees the protection of all facets of car ownership.

(The writer is the CEO and founder of Edel Assurance.)