• Jay Mohan Singh

Extended Warranty not honoured by car dealership?


Purchasing a motor vehicle in Western Australia with an “extended warranty”.


If you have purchased a motor vehicle in Western Australia from a car dealership, you would have most likely remembered the car salesperson suggest or insist that you purchase the car with the dealership’s extended warranty program, as they claim that it would give you peace of mind in the event there is something wrong with the car.


What exactly is an extended warranty program offered by a car dealership?


An extended warranty program offered by a car dealership is generally an agreement in writing (also known as a contract) where the dealership (also known as the “warrantor”) warrants and/or promises, that in the “unlikely event” that their motor vehicle purchased from their dealership is faulty, the dealership will pay for the repairs or replacement of that vehicle they sold to the Purchaser, without the Purchaser having to pay an out-of-pocket expense. Note: there may be small out-of-pocket expenses which the dealership will charge for inspection or assessment of the vehicle.


What are some common problems or pitfalls associated with Purchasers of motor vehicles and extended warranty programs offered by car dealerships?


  • Most Purchasers fail to read or understand the terms and conditions of the dealership’s extended warranty program, and yet sign and enter into a formal written agreement.

  • Most Purchasers claim that they were told by the car sales person that sold them the vehicle that the extended warranty program they entered into with the dealership covered their purchased motor vehicle for every vehicle fault.

  • Most Purchasers believe that they will never need to bring a claim under their extended warranty program with the dealership they purchased the motor vehicle from.


3 possible outcomes when a Purchaser makes a claim under an extended warranty program with a car dealership


The Purchaser makes a claim under their extended warranty program at the car dealership that sold the vehicle to the Purchaser, and:

  • the car is determined to be faulty. The dealership honours the extended warranty program and the Purchaser is only required to pay minimal out-of-pocket expenses associated with either fixing or replacing the motor vehicle.

  • the car is determined to be faulty, but the dealership holds the Purchaser responsible for the car’s faultiness. The dealership claims that the extended warranty program cannot be honoured at this time. The Purchaser is left to pay an extraordinary amount of money for repairs.

  • the car is determined to be faulty, but the dealership claims that the faulty component(s) are not covered under the extended warranty program the Purchaser entered into. The Purchaser is left to pay for all repair work required to fix the vehicle.

If you find yourself in the latter situations or similar situations, it is advisable that you immediately speak to a Perth lawyer who can assist you with such legal disputes, before you agree to any of the dealership’s demands. Call us today (08) 6389 0270 or send us an email info@bmslaw.com.au

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