Car Warranty in Australia | What’s Covered | Best Options | Extended Plans

Buying a new car is exciting, but the hidden costs of ownership—repairs, maintenance, and unexpected breakdowns—can quickly add up. That’s where car warranties step in. In Australia, warranties are designed to protect you against manufacturing defects, faulty parts, and in many cases, major repair costs.

But not all warranties are created equal. Between manufacturer warranties, statutory warranties, extended warranties, and third-party options, it can be hard to know what you’re really covered for. Should you stick with the standard new-car warranty? Extend it when it runs out? Or rely on third-party coverage for an older used car?

This comprehensive guide unpacks everything about car warranties in Australia—what they cover, what they don’t, and which options may suit your budget and driving needs.

Understanding the Basics of Car Warranties

What Is a Car Warranty?

A car warranty is essentially a contract between you (the car owner) and the manufacturer or provider, guaranteeing repairs or replacements of specific parts if they fail within a set period.

It provides peace of mind by covering the cost of faults that shouldn’t occur with normal use.

Types of Warranties Available in Australia

• Manufacturer’s Warranty – Comes with all new cars. Usually covers parts, labour, and repairs due to manufacturing faults.
• Statutory Warranty – A legal obligation for used cars sold by licensed dealers in certain states. Covers a limited period or kilometres.
• Extended Warranty – Offered by manufacturers or third-party companies for coverage beyond the standard warranty.
• Dealer or Third-Party Warranty – Optional coverage often pitched during vehicle purchase, especially for used cars.

Manufacturer Warranties in Australia

How Long Do They Last?

Most car brands in Australia now offer five- to seven-year warranties as standard. For example:

• Kia: 7 years/unlimited km
• Toyota: 5 years/unlimited km (up to 7 years with conditions)
• Hyundai: 5 years/unlimited km
• Mitsubishi: 10 years/200,000 km (with dealer servicing)
• Volkswagen: 5 years/unlimited km

This competitive landscape means buyers can choose vehicles with longer warranties for better peace of mind.

What’s Covered?

• Engine and transmission faults
• Manufacturing defects in parts and materials
• Labour costs for repairs
• In some cases, roadside assistance

What’s Not Covered?

• Normal wear and tear (tyres, brake pads, wiper blades)
• Misuse or neglect
• Modifications or aftermarket parts issues
• Accidental damage

Statutory Warranties: Protection for Used Cars

When buying a used car from a licensed dealer, some states in Australia require a statutory warranty.

• In Queensland, for example, a statutory warranty applies to vehicles less than 10 years old with under 160,000 km. Coverage lasts 3 months or 5,000 km.
• Other states have similar schemes, ensuring buyers aren’t left exposed immediately after purchase.

Private sales, however, don’t come with a statutory warranty, so due diligence is essential.

Extended Car Warranties in Australia

What Is an Extended Warranty?

An extended warranty is extra coverage purchased to continue protection after the manufacturer’s warranty expires. These plans can be:

• Manufacturer Extended Warranty – Sold by the brand itself. Usually reliable and comprehensive.
• Third-Party Extended Warranty – Offered by insurance companies, finance groups, or warranty providers.

Pros of Extended Warranties

• Longer peace of mind for expensive repairs
• Increased resale value (buyers like knowing the car is covered)
• Roadside assistance often included

Cons of Extended Warranties

• Additional cost, sometimes thousands of dollars
• May include strict servicing requirements
• Some exclusions or fine print limitations

What’s Typically Covered Under Extended Plans

• Engine, gearbox, transmission
• Electrical systems
• Cooling and fuel systems
• Drive shafts and differentials
• Air conditioning

Optional add-ons may include coverage for entertainment systems, advanced driver-assistance systems (ADAS), and hybrid battery packs.

Key Exclusions to Watch Out For

Even the best warranty has exclusions. Common examples include:

• Regular servicing and consumables
• Damage from accidents or environmental conditions
• Neglect, misuse, or improper maintenance
• Modifications like aftermarket performance tuning

Always read the fine print carefully. Many Australians discover too late that a warranty claim is rejected due to a missed scheduled service.

Is an Extended Warranty Worth It in Australia?

The value of an extended warranty depends on your situation:

• Yes, it’s worth it if:
  • You plan to keep the car long-term (5+ years).
  • You own a vehicle with complex technology or an EV with an expensive battery pack.
  • You want the added resale value when selling.
• Maybe not worth it if:
  • You trade in vehicles every few years.
  • You’re buying a model with proven reliability and low running costs (like a Toyota Corolla).
  • You’d prefer to set aside savings for repairs instead.

Best Car Warranty Options in Australia

Manufacturer Programs

Brands like Kia and Mitsubishi lead with long coverage. If warranty length matters, consider these first.

Extended Warranty from Dealers

Good for convenience, but often more expensive. Always compare with third-party providers.

Third-Party Warranty Providers

Companies such as Allianz, Integrity, and Australian Warranty Network (AWN) offer flexible plans for used and older cars.

EV and Hybrid Coverage

Electric vehicles often come with separate battery warranties (8–10 years). Always check the terms, as replacement costs are significant.

Car Warranty and Consumer Law in Australia

The Australian Consumer Law (ACL) offers additional protection beyond any written warranty. If your car develops a “major fault” within a reasonable time, the manufacturer must repair, replace, or refund—even outside warranty.

This law protects buyers from unfair treatment and ensures vehicles meet acceptable quality standards.

Tips for Making the Most of Your Car Warranty

• Always service your car on time and keep records.
• Use authorised service centres where required.
• Report faults as soon as possible.
• Don’t modify your car in ways that may void coverage.
• Keep receipts for all maintenance and repairs.

Extended Plans for Used Cars: A Growing Trend

With Australians keeping cars for longer periods, extended warranties for used cars are gaining popularity. These can provide:

• Coverage for vehicles up to 10–15 years old
• Flexible kilometre limits
• Options tailored to 4x4s, hybrids, or high-performance cars

Car Warranties and Finance Deals

Many finance packages include optional warranty add-ons. While convenient, they’re often more expensive than buying coverage separately.

Before signing, compare standalone warranty providers and negotiate with dealers.

Future of Car Warranties in Australia

With EV adoption rising, warranties are adapting. Expect to see:

• Longer coverage on EV batteries
• Flexible subscription-based warranties
• More competitive manufacturer offers to attract buyers

Conclusion: Choosing the Right Car Warranty

A car warranty isn’t just about repairs—it’s about peace of mind and protecting your investment.

• New car buyers should prioritise brands with longer manufacturer warranties.
• Used car buyers must check for statutory warranty eligibility and consider extended coverage.
• Long-term owners may benefit from extended plans, especially for complex or electric vehicles.

Ultimately, the best option depends on your driving habits, budget, and how long you plan to keep your car. By understanding what’s covered and comparing providers, you can make an informed decision that saves you money and stress in the long run.