Common Myths and Misconceptions About Car Warranties in India

By Sujeet Nair

Many Indian consumers find it difficult to differentiate between car insurance, car warranties and car repair packages when it comes to buying a car. Misconceptions abound, such as the idea that service packages cover the same territory as warranties or that having auto insurance eliminates the need for a warranty. As a result of this uncertainty, vehicle owners may be exposed to unforeseen repair costs and disruptions to their driving experience. Let’s dispel these myths and clarify the unique and vital roles that warranty, insurance and service plans play in providing complete protection.

Myth 1: Vehicle warranty and insurance are the same

The idea that a vehicle warranty is not necessary if the insurance is working is among the most common misconceptions. Many car owners believe that because insurance covers damage to their car, it will also cover interior problems such as electrical or mechanical problems. However, this is not the case at all.

• Only in the event of an external event such as an accident, collision or theft, Is car insurance becoming mandatory? It acts as a financial safety net for losses caused by these events.
• Automobile warranties, on the other hand, are not affected by collisions. It covers internal component failures such as engine problems, electrical problems or air conditioning malfunctions, even if there is no accident or external damage.

Example: For example, when you go on a long family trip, the air conditioner suddenly stops working. Since there is no problem with the accident, insurance will not be of any use here. However, an active warranty will cover the repair and ensure you don’t have to pay out of pocket.

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Myth 2: There’s no need for a warranty if you have insurance

• Another common misconception is that having auto insurance does not eliminate the need for a warranty. In reality, warranties and insurance work together to provide various forms of coverage.
• Only external perils such as theft or accident are covered. If the cause is internal, such as a gearbox failure, your insurance will not pay.
• The warranty guarantees that problems arising from electrical or mechanical malfunctions will be resolved without being bound by other conditions.

Insurance and warranties combined provide complete protection against both internal and external threats. Since neither can handle every situation alone, luxury vehicle owners can rest easy knowing they have both.

Myth 3: Service packs and warranties are the same

Many vehicle owners mistakenly believe that regular maintenance contracts will cover parts repairs and confuse service packages with warranties. Costs for repairing or replacing defective parts are not covered by service packages that 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, are included in the service packages. While they don’t cover catastrophic repairs or part failures, they do ensure that your vehicle remains in good condition.

Warranties provide protection against failure or malfunction for electrical and mechanical parts, ensuring replacements and repairs are carried out at no extra cost.

Simply put, warranties protect you from unforeseen repair costs, while service packages ensure your vehicle is kept in good condition.

Why Are Warranty and Insurance Necessary for Complete Protection?

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

Accident, collision, theft and other external hazards are covered by insurance.

Even if there is no accident, internal mechanical and electrical problems are covered under warranty.

Routine maintenance is covered by service packages, but malfunctions or part failures are not.

Both insurance and warranty are very important for luxury vehicle owners, especially those who drive vehicles such as Mercedes-Benz, BMW, Audi or Land Rover. Each has a specific function and guarantees the protection of all aspects of vehicle ownership.

(The author is the CEO and Founder of Edel Assurance.)