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Understanding extended warranties

Jul 07, 2026 Dewald Ranft, Motor Industry Workshop Association (MIWA),


Understanding extended warranties

 

As South Africans continue to keep their vehicles for longer, many motorists are finding themselves asking the same question once the manufacturer's warranty expires: Should I invest in an extended warranty?

 

With the average age of South Africa's vehicle parc now sitting at approximately 10 years and 11 months (Lightstone Auto statistics:June 2026), and economic pressures encouraging consumers to delay replacing their vehicles, extended warranties have become an increasingly relevant consideration for motorists looking to manage the potential cost of unexpected repairs.

 

Ranft says even though there has been an encouraging increase in the number of new car sales (0 – 5 years: 21% in 2024 to 24% in 2026), 47% of the total passenger car parc still sits in the 6 – 10 and 11 – 15-year age band and 28% in the 15+ band.

According to Dewald Ranft, National Chairperson of the Motor Industry Workshop Association (MIWA), there is no one-size-fits-all answer. "An extended warranty can provide valuable peace of mind for some motorists, particularly those planning to keep their vehicles for several more years. The important thing is to understand exactly what you are buying, what is covered, and what is not."

 

What exactly is an extended warranty? - An extended warranty is a contract that provides cover for certain mechanical and electrical failures after the manufacturer's original warranty has expired. Unlike a service or maintenance plan, it generally does not cover routine servicing, consumables or normal wear-and-tear items. Instead, it is designed to help cover the cost of specific component failures, subject to the terms and conditions of the policy.

 

Consumers often assume that all extended warranties offer similar protection, but this is far from the case. Cover can vary significantly between providers.

Before signing up, motorists should ask:

•              Which components are covered?

•              What exclusions apply?

•              Is there a waiting period or vehicle age/mileage cap before or during coverage?

•              Are labour costs included?

•              Is there a maximum claim amount or annual limit?

•              Can repairs be carried out at any accredited workshop, or only at approved repairers?

•              What maintenance requirements must be met to keep the warranty valid?

•              Is the warranty transferable if you sell the vehicle and will this have an impact on the resale value of your vehicle?

•              Finally, in case of any recourse, who underwrites the policy and are they an FSCA-registered financial services provider?

 

"Reading the policy wording carefully before committing is essential," says Ranft. "Many disputes arise simply because consumers expected cover for items that were specifically excluded," he says,

 

Whether an extended warranty represents good value depends on several factors. “A newer vehicle with a full service history and several years of planned ownership may be a suitable candidate for extended cover. Equally, someone purchasing a quality used vehicle may appreciate the financial certainty an extended warranty can provide should a major mechanical failure occur,” explains Ranft. 

 

However, motorists should also weigh the cost of the warranty against the potential repair costs they may face and ensure the cover aligns with their individual needs.

Ranft advises motorists to carefully compare the premium and excess against likely major-repair costs, the vehicle's mileage and reliability record, and then assess whether the policy pays the full repair cost or only a capped amount per component which is generally the case. He says there are warranties that cover unlimited cover, but, in most cases these are for newer vehicles only.

 

An extended warranty is not a substitute for regular maintenance.

Most warranty providers require vehicles to be serviced according to the manufacturer's prescribed schedule. “Missing scheduled services or failing to maintain the vehicle correctly could invalidate the cover,” says Ranft.

Modern vehicles are engineered to last much longer than they did in the past, but longevity depends on consistent maintenance.

 

If a repair is required, motorists should ensure the work is carried out by a reputable, qualified workshop bound by a Code of Conduct and Ethics and one which displays a verifiable QR code certificate. “This gives you the assurance that only quality replacement parts are being used and that the workshop is following the manufacturer's specifications. Poor workmanship or inferior parts, after all, not only compromise vehicle safety but may also affect future warranty claims and limit your recourse,” notes Ranft.

 

An extended warranty should be viewed as a financial risk-management tool rather than a guarantee against every repair. For some motorists, it offers valuable peace of mind and protection against potentially expensive mechanical failures. For others, particularly those with sufficient savings set aside for repairs, it may be less essential.

 

"The most important decision consumers can make is an informed one. Understand your vehicle, understand the policy and continue maintaining your vehicle properly. An informed motorist is always in the strongest position," concludes Ranft.

MIWA is a proud association of the Retail Motor Industry Organisation (RMI).

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