VW introduces five-year warranty as market leader Toyota holds out

WARRANTY wars are heating up with yet another brand offering five-year coverage while top seller Toyota sticks to three.

Out with the old and in with the new … VW introduces five-year warranty coverage on new models. Picture: Supplied.

YET another car company has moved to five-year warranty with Volkswagen joining the growing list of brands putting pressure on market leader Toyota, who so far refuses to budge from three-year coverage.

Most of the Top 10 brands now offer five-year factory-backed warranties, many increasing their coverage since the Australian Competition and Consumer Commission (ACCC) embarked on its in-depth review of consumer rights in the car industry.

While the disclaimer on the Volkswagen deal says the offer runs out at the end of this year, News Corp Australia understands it is likely to become permanent next year.

The five-year/unlimited kilometre offer includes all Volkswagen passenger cars, SUVs and commercial vehicles, including utes and vans.

VW is offering five-year warranty across its entire range, including utes and vans. Picture: Supplied.

“From the 80,000 customer surveys that (Volkswagen) conducts annually, we see strong response to our driveaway pricing and finance offers,” Volkswagen Group Australia Managing Director Michael Bartsch said. “Customer reaction to Five Year Warranty will be informative.”

The last time Toyota made a statement to media about warranty the company’s sales and marketing boss Sean Hanley said: “At this stage Toyota Australia has no plans to extend its warranty on new vehicles … we will continue to offer outstanding service to our customers and I can assure you our warranty obligations are aligned to Australian Consumer Law.”

Recent changes to Australian Consumer Law have given buyers better protection when it comes to faulty cars

The growing industry consensus is that the ACL deems it “not fair and reasonable” for a major fault to occur after four or five years — if a vehicle has been properly maintained.

Therefore, many brands are formally increasing coverage from three years to five because they are obliged to fix the car under ACL in any case — if routine maintenance has not been neglected.

Toyota says it is sticking with three-year warranty coverage even though most of the Top 10 has five-year coverage. Picture: Supplied.

It has been a long road to extended warranty coverage.

Hyundai was the first car maker in Australia with a five-year warranty, launching it in 1999.

It took six years for the second brand to follow; Mitsubishi went to five-year coverage in December 2004.

It has since taken more than a decade for most other leading brands to follow.

In the past two years so many have moved to five-year coverage — including Mazda, Holden, Ford and Honda — that most of the Top 10 now offer a longer warranty as standard.

Nissan offered five-year coverage as a limited-time promotion in August and September 2018 and is believed to be considering a full-time switch.

Mitsubishi and Honda from time to time offer seven-year warranty coverage, up from their standard five years.

Holden spent much of 2017 flicking between five and seven years warranty, depending on the model, but has since settled on five-year protection.

Subaru offers five-year warranty from time to time but says it has no current plans to offer extended coverage full time.

No-one comes close to Hyundai’s sister brand Kia, which began its permanent industry-leading seven-year/unlimited kilometre warranty coverage in October 2014.

Kia Australia has doubled its sales over the past four years and the company attributes much of that growth to seven-year warranty coverage.

Five-year pioneer Hyundai says it is now considering boosting its coverage from five years to seven.

Hyundai was first with five-year warranty coverage in Australia and is now considering a switch to seven. Picture: Supplied.

This reporter is on Twitter: @JoshuaDowling