We all want to protect both our wheels and our wallets, which is why having a motor plan or warranty can be a very good thing if something goes wrong with your car. But which one should you choose given your current lifestyle?
Here’s an explanation of how they may differ in terms of price and, more importantly, benefits:
Motor plan
A motor plan, also known as a maintenance plan or as a “bumper to bumper” benefit, pays for all costs associated with repairing or servicing your car, with the exception of some minor running expenses such as fuel, tyres, water replacement and oil.
For example, imagine you’re happily driving along with the top down and the wind in your hair and your window mechanism breaks, your clutch snaps or your engine fails. What do you do then? A motor plan will help dry your tears because it will cover the cost of nearly all of these repairs by paying out a significant portion of the bill if not all of it (depending on the manufacturer).
This type of product usually stays with the car regardless of whether the car changes owners. So if you buy a nearly new car, it will often come with a motor plan that was originally bought by the previous owner.
A typical motor plan is usually valid for a period of, say, five years or 100 000 km, whichever comes first. But this does vary, as all car brands offer different options.
Warranty
Like a motor plan, a warranty provides a cash benefit for a wide range of mechanical repairs, except where wear and tear is expected of the item (as is the case with brakes or tyres).
For example, if your engine seizes and costs R60 000 to replace, a warranty product would help you cover these costs by contributing a specific Rand value, or a certain percentage of the total bill (depending on the product).
There are lots of different options on the market such as a one-year unlimited mileage option, a two-year unlimited mileage option that you buy with a second-hand car or even monthly premium products − so you need to pick the one that best suits your needs.
If your car is less than 10 years old and has less than 200 000 km on the clock and your manufacturer’s warranty has expired, you could also look into getting an Extended Car Warranty from Hollard. This affordable monthly option covers you for mechanical breakdown or failure of 21 major parts on your car, plus it provides free 24-hour roadside assistance, car hire and some level of service benefit if you need it (bonus!).
So, if you’re driving a brand-spanking new luxury car, a motor plan may suit your needs best, as expensive parts will be fully paid for if something goes wrong. But if you’re zipping around town in a trusty model that didn’t cost you an arm and a leg, a warranty may be more up your street.
Whatever option you choose, it’s important to note that if your car misses a service, neither your warranty nor your motor plan will pay out when the time comes. So dust off your service book and be diligent about taking your vehicle in whenever it needs a service.
Hollard Life Assurance Company (Reg. No. 1993/001405/06) is an authorised Financial Services Provider.
