Car giants offer insane warranty to keep buyers
Carmakers are battling it out with generous promises to get you to part with your hard earned cash – but is it really a win for Aussie drivers?
Car makers are going to new lengths to secure your business – literally.
A new fight has emerged in the industry in recent years around the new car warranty. Less than a decade ago, a three-year warranty was almost standard across the vast majority of brands.
These days, new car warranties extend up to a decade for certain brands, as it becomes a crucial new tool to convince buyers to choose them in an increasingly crowded marketplace.
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Hyundai is the latest car maker to make a major change, and not for the first time. The South Korean brand set off the movement in 1999, when it launched a five-year warranty that made it an outlier across the industry.
The resulting sales boost, as consumers flocked to Hyundai thanks to the peace of mind the extra two years of coverage provided, saw many rivals reconsider. Hyundai’s stablemate, Kia, pushed the boundaries even further, introducing a seven-year warranty in 2014. It also coincided with sales growth.
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Things went to the next level in 2020, with Mitsubishi giving Australia its first 10-year warranty in 2020. Since then, both MG and Nissan have followed with a decade of coverage for its new cars.
Warranty coverage has become a major battleground for the industry, with the influx of new car brands joining an already crowded market, leaving each looking for a way to stand out.
Mitsubishi went to its 10-year warranty amid the new threat from cut-price Chinese car brands like MG, GWM and Chery. While MG has moved to a 10-year cover to help win buyers to its still-growing portfolio.
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Hyundai’s move is telling, as the brand has suffered a sales decline in recent years, with Kia overtaking it on the sales charts.
Hyundai Australia chief executive Don Romano was sent here by head office to turn around the company’s local fortunes by any means necessary, so the aggressive warranty move is just part of that strategy to win back customers.
“As the first automotive brand in Australia to offer a five-year unlimited kilometre warranty, we recognise the strategic importance of competitive warranty coverage,” Romano said.
“Over the past few months, we have worked closely with our National Dealer Council to develop a compelling and highly attractive warranty package that provides further peace of mind for our owners.”
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It does come with a few caveats, though. Hyundai’s seven-year warranty only applies to passenger vehicles, so commercial vehicles, such as the Staria-Load van and passenger cars used for “commercial applications” such as ride-sharing or taxis, still only have five years of protection.
Also, in order to retain the full seven years of coverage, owners must have their car or SUV serviced at an authorised Hyundai dealer, and if they don’t, Hyundai will only honour its previous five-year warranty.
In a positive move for anyone who recently bought a Hyundai and may now feel annoyed to miss out, while it officially begins today (September 1) it will backdate the coverage to all passenger cars sold since June 1.
Originally published as Car giants offer insane warranty to keep buyers
China giant’s ‘cheap’ promise to Aus drivers
