As with all warranties, you must carefully check the inclusions and exclusions that this cover affords.
Points to pay attention to
While a manufacturer’s warranty might cover you for faults and repairs including labour for a fixed period of time after you buy a new vehicle, it will often stipulate that this labour will only be covered by a warranty if the work is undertaken at an approved garage. This type of warranty is usually limited to three years or 60,000 miles, whichever comes first.
Once this cover for a new car has lapsed and you have chosen an extended warranty, or if you have been offered a warranty for your nearly-new or used car, the terms of how labour is covered vary greatly.
Some warranties will have different levels of cover for a part and for the labour. Certain cars may be covered for three years for a car fault, but the labour is only covered in the first year. After that, the warranty may cover the cost of the part, but the work of the garage will have to be covered by you.
Some warranties will cover labour only for a specific hourly rate. If the garage fixing your vehicle charges more for labour per hour, you will have to pay the difference.
How to protect yourself against unexpected labour costs
The amount garages charge per hour for labour can vary enormously. Just a few years ago, the average amount charged per hour by a garage outside London was £74.33, jumping up to £91.99 for labour undertaken in the capital. Garages in some of the more affluent boroughs of London can charge over £200 per hour for labour. In more rural areas, the charge could be as little as £60.
Given these discrepancies, it is no wonder that in practice, many warranties do not cover the full cost of the labour associated with a repair. If you want to avoid the nasty surprise of an additional bill when having your warranty-protected parts replaced, or faults corrected, you can take out an additional labour warranty that will cover you for the entire cost of labour based on the rate per hour that you choose.
You should research the hourly charge at approved garages near where you live and select the appropriate level of cover when you purchase your warranty, and if it is an approved fault that is being fixed, at an approved garage, this sort of labour warranty will cover the full cost.
Even if you cannot afford a warranty that would cover the full hourly cost of labour at your nearest approved garage, you could still buy a labour warranty that offers more minimal cover, which can provide a buffer against the full price of garage labour if you need it.
Bear in mind that labour warranties have small print that needs paying attention to. Usually, you will need to properly maintain the vehicle and keep up to date with servicing at an approved garage. You should also check if a labour policy will pay for you to be towed to an approved garage if necessary, or pick you up from a roadside breakdown.
With such a lot of variation between different kinds of policies, it really pays to take your time and make sure you choose cover that suits your needs - and always read the small print so you know exactly what to expect.