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Dean Connolly, Director of Strategic Partnerships
Used car buyers are increasingly drawn to extended warranties to manage rising repair costs, a development partly accelerated by the growing inclusion of in-car technology, driving aids, and safety systems in today’s cars.
It is a trend that is especially relevant to the used car operations across the UK’s franchised dealer network, where their used car inventory is increasingly likely to feature sophisticated technology such as advanced driver-assistance systems (ADAS), infotainment components, and other safety-critical technologies, which can fail in different ways from traditional mechanical parts – and this can be expensive.
Rising Repair Costs and the Increasing Cost of Inflation
The rising cost of repairs is evident in our warranty claim data, where costs rose by over 18% in the past two years, well above inflation. All of this at a time when 60% of UK households have limited or no savings, and more than a third have less than £1,000 in emergency savings – the highest figure ever recorded.
This concern is supported by research published by the RAC in November.
- 65% of drivers had to pay for unexpected car repair costs in 2025 – up from 59% in 2024.
- Average repair bills rose to £650.
- 39% of people said they would struggle to pay a bill of up to £500; this increased to 54% for bills of £501-£1,000.
Customers are aware of this risk and that an extended warranty can help mitigate it.
The Consumer Rights Act and Extended Warranties
One area of potential misunderstanding regarding extended warranties concerns the Consumer Rights Act. The support it offers customers differs from that of an extended warranty, particularly for used cars, and is especially relevant for today’s tech-heavy cars, where a sudden, unexpected failure can be very costly.
Under the Consumer Rights Act, if a fault occurs within the first 30 days of a car’s purchase, customers have the right to reject the car and receive a full refund. After 30 days but within six months, if an issue arises, it’s up to the selling dealership to prove that the car was of satisfactory quality, fit for purpose and as described when it was sold.
While a dealer may choose to cover repair costs, those costs are also likely to be covered by a quality extended warranty that will also protect the customer beyond electrical components for as long as the warranty is in effect.
Understanding and explaining the difference to promote an extended warranty represents good customer care, enhances the dealer’s reputation, and mitigates potential costs and reputational risks.
If you want to discover how extended warranties can play a greater role in your business with today’s tech-heavy cars, we should be talking. Contact us at [email protected].