Does offering a longer warranty mean manufacturers have faith in its product?
I wish to buy a new car – Kia offer a 7 year warranty which I think is a good thing, however I’ve been looking and comparing with the Skoda’s/ Ford’s etc which have lesser warranties of 2-3 years.
Is a longer warranty a better thing or not for customer satisfaction should things go wrong??
Does offering a longer cover period mean that they believe their products will last longer with less failure of breaking down??
Compare Breakdown Cover | | October 11, 2009
3 years, customer satisfaction, failure, ford, kia, new car, skoda, warranties, warranty
the longer warranty is better, as the company is confident that there product will function properly
There’s two ways of looking at this. First don’t look at the length of the warranty. Look at how many miles it covers. You’ll get to the mileage limit well before the age limit. Then figure out if you plan on keeping that car that long.
KIA uses their long warranty program to set them apart from brands like Ford and Honda. By offering the longer warranty it can be used to market the car better. They can’t compete with their engines, suspensions, quality control or styling, but they can compete with service. So they offer long warranties to attract customers. It’s an angle that works.
No, it means that Kia and hyundai HAVE to offer a longer warranty to have a shot against a honda or toyota which, I think both only have 3 years, 36,000 miles.
Kia and HYUNDAI were forced to offer there long warranties in the late 90 early 2000 because they had a lot of reliability issues. Banks found that there customers were spending there money fixing the car not making there payments, so banks threatened to stop financing them. Over the years HYUNDAI has greatly improved there vehicle while Kia is still behind. Most brands offer a 3 year 36000 mile warranty because that is all they need to. If they warrantied there vehicles longer it would cost them more and they would have to raise prices. Consumer reports does a great job of ranking vehicles based on "real cost of ownership" which means cost, ins, fuel, maintenance, and repairs. Lower prices don’t always mean better deals. do some research and you will make a informed decision. Good luck
With any warranty, you need to read the small print to fully understand any strings attached to the warranty. Is it linked to a finance deal? Is it linked to a a mileage limit? Does it require you to have the car serviced at least annually by the dealer? It is transferable when you sell the car? Does it have ‘get out’ clauses that might enable the supplier to say the warranty doesn’t apply to the particular fault you have?
I am not suggesting that the Kia warranty is in any way dodgy. I have no idea but I doubt it. Even if there were conditions attached, no doubt they would be reasonable.
So why would one manufacturer offer a long warranty when its competitors offer a shorter one? Kia is not currently a ‘prestige’ brand. It will lose value quicker than its more established competitors on the 2nd hand market. In this case, the long warranty is part of the marketing of the product and an attempt to create a ’safety net’ of reliability to compensate for the fact it has yet to establish the track-record of its competitor and also an attempt to prop-up the second hand value of the car. Given that Kia is not an expensive brand, the combination of the car and the long warranty might be enough to make you feel the overall package has the edge over its competitors. That is what they are hoping and they will be right for some buyers.
Its just a sales product. They know that most cars will not need the amount of warranty sold, so the numbers average out to where they make more money off the warranty than the car owner will use. If you finance in the warranty they turn out and make even more money due to interest on the product.
As you have to pay to have your car serviced by a main dealer to maintain the warranty, does it not occur to you that there might be something in it for Kia?
Think of it as an insurance. The chances are with almost any make on the UK market today that it will go for 7 years without major component failure. Items such as brakes, clutch & tyres are excluded from the warranty as they’re expected to wear according to driving style. So the likely number of claims on the insurance has to be outweighed by extra sales for the manufacturer & supplier.
Very few cars will do such a high mileage in unfavourable circumstances that they’ll wear other bits out – with the possible exception of minicabs. After 4 years of age, most cars’ annual mileage drops considerably. Minicabs are usually serviced by owners/drivers as it’s far more economic, so they wouldn’t come under the warranty scheme. Should they go to the expense of dealer servicing, the cost of the major component replacements will easily be covered by the increased revenue gained from extra sales, so they won’t miss out. A number of 7 seat Hyundais have already passed the 7 year mark as minicabs & the economics have been studied by all manufacturers, not just Hyundai, so Kia can be pretty sure the extra sales generated by the 7 year warranty won’t be outweighed by the cost.
Also, garages will do much better out of the deal as they’ll get to do 7 years servicing on cars rather than the 3 years.
All in all, it appears to be beneficial all round provided that you would normally have a car serviced at a garage every time for 7 years. Many owners find it cheaper to service older cars themselves, so the extra money you spend on dealer servicing is what would pay for the cost of the extended warranty. Most manufacturers could offer the same & if the scheme proves beneficial to Kia, others probably will follow suit, just as they nearly all offer 3 year warranties now.