Looking for a used car warranty? Make sure it’s regulated

Warranty Direct are fully regulated by the financial authorities. Sounds good... but what does that really mean?

Pay your hard-earned money for a used car warranty, and you should rightly expect a high level of peace of mind as far as your car is concerned. Warranties are there to protect you financially if your pride and joy suffers an unforeseen breakdown and, while motor parts are not cheap to buy, it’s the labour costs that can also soon mount up, especially if the damage requires a lot of time on the mechanic’s ramp.

Having this kind of insurance means you’re not left alone to foot the repair bills yourself. Choose wisely and read the small print, and you’ll find many policies will add in MOT insurance, roadside breakdown assistance and even a hire car if your own vehicle is off the road for some time.

But many drivers are in for a nasty shock when the time arrives for them to claim on their warranty – only to find the company they are with are not fully regulated. That’s often the first time that they realise they’re not going to get the pay-out they thought they were entitled to, to repair their car fully and get it back on the road.

Regulated by the industry

It’s too late for those unfortunate drivers as they discover they should have gone with a fully regulated and fully insured warranty provider. One like Warranty Direct, for example.

Warranty Direct’s polices are underwritten by a leading insurer so you know you’ll get your claim sorted quickly and fairly. Warranty Direct follow all the right processes – the ones that are there to protect the consumer, their customers.

Regulated – and therefore insured – warranty providers report to the Financial Conduct Authority (FCA) twice a year to give an account of their solvency situation, their financial resources, accountability, risk assessment, management and supervision. So you know that Warranty Direct has the monetary backing and resources to pay for your car’s repairs, should the need arise.

It also means you have the security of the Financial Services Compensation Scheme (FSCS). This organisation is funded by the financial industry, including banks, building societies, insurers and pension providers, so that it can offer compensation if your warranty provider or insurer goes out of business or becomes unable to fund your claim.

Providers such as Warranty Direct pay thousands of pounds into the FCSC compensation fund so that it can continue to operate each year. That’s in addition to the peace of mind customers get from knowing that Warranty Direct has the resources and financial backing of an insurance fund to call upon.

And while they’re proud to be able to claim all of these positive points, you won’t find them comparing themselves with their rivals. It’s not for Warranty Direct to criticise other providers’ business methods. They get on with what they do well and leave their excellent record to speak for itself.

Even greater reassurance

And, if you need even more assurance, a regulated warranty provider will abide by the rulings of the Financial Ombudsman Service (FOS) if you are unhappy about the level of compensation offered or the service you’ve received from your insurer. Whatever ruling the FOS makes, a regulated warranty provider will obey it. An unregulated provider does not have to do this.

So, like any insurance cover, you may or may not need to claim on your warranty but, after you have spent money on your new car and bothered to find a policy to cover it against repair work, it’s good to know that, with Warranty Direct, you have all the backing and reassurance that a regulated company can give you.