Car warranties and insurance in Hong Kong

In Hong Kong, one of the single largest investments people make, aside from their home or apartment, is purchasing a car. With high import duties, licensing fees, maintenance, parking fees and insurance, it is not uncommon to see even a basic vehicle cost more than HKD 150,000-200,000. Because this is such an investment, many dealers and manufacturers will include a warranty on the car. In this article, we take a look at the most popular types of warranties included with vehicles and their link with car insurance.

What are the common types of car warranties in Hong Kong

There are 5 major types of warranty available for most vehicles in Hong Kong. These include:

• Basic factory warranty - This is often called a 'Bumper-to-Bumper' warranty, meaning the manufacturer of your car guarantees that they will cover factory installed parts should they be defective. For example, if the air-conditioning unit was to break within the warranty period, the manufacturer will replace it. The majority of these policies in Hong Kong are for new cars only, and will have a set time limit or distance e.g., 36 months or 100,000 km, at which point they will expire. To be clear here: Most of these warranties will not cover damage to the car's body, just the parts. It is important to read and understand the terms when purchasing a new car, as every manufacturer will have different exclusions and limits.   

• Drivetrain warranty - This is usually offered by the manufacturer at no extra cost, and will kick in after the first basic warranty period is over. This is usually extremely limited in coverage, typically covering the engine, transmission, and moving parts up to the wheels (tires are not included). It is by no means a guarantee that your car won't break down so much as a guarantee that, should it break down, the moving parts will be replaced. These warranties usually last between 5-10 years.  

• Extended warranty - This is an optional warranty that can be purchased in order to extend the length of time the bumper-to-bumper warranty is in place. Some manufacturers or dealers will also include extra tune-ups and maintenance packages with this type of warranty.  

• Battery warranty - This warranty is only present in electric or hybrid cars, and covers defective electric batteries for a designated period beyond the basic warranty.  

• Used car warranty - Some dealers will offer a short-term warranty on used cars where the original manufacturer's warranty has expired and covers defective parts. This is usually offered at no extra cost, but is often extremely short, usually 3-6 months for a basic warranty and 1 year for the drivetrain.

Things to be aware of with warranties

When looking to buy a new car, it is important to review the terms associated to the warranty offered by the manufacturer, as they will differ from one vehicle model to another. For example, with the Nissan GT-R and Leaf, the basic warranty last three years or 100,000 km, while all other Nissans have a basic warranty of six years or 100,000 km. Here are five common things to be aware of with new car warranties in Hong Kong:

1. Most have strict coverage conditions - What we mean by this is that, while many manufacturer warnings are worded in a way that makes it sound like comprehensive coverage is offered, the truth is there are usually strict conditions around when the warranty will actually replace parts or what is covered. For example, some warranties will not cover glass or fabric on seats. It is, therefore important to be sure you read and understand what is covered.

2. Manufacturer warranties have time and distance limits - The wording here can be tricky at times, but the majority of warranties have what is called an ‘OR clause’. What this means is that the coverage period will be a set time OR distance, with the warranty expiring once either is reached.  

3. Some warranties won't cover parts or labour - This is an important element to look into, as some manufacturers won't cover the cost of labour in the warranty, and others may not cover the cost of replacement parts if the manufacturer does not make them.

4. It is usually mandatory that within the warranty period, scheduled maintenance or repairs be carried out at registered dealers - If the maintenance is not conducted in a timely manner or at specified locations, then your warranty could be voided. This also goes for repairing the car yourself. Should you need any repairs, we strongly recommend taking the vehicle back to the dealer you bought it from for repairs, as this will guarantee your warranty will not be voided.  

5. Warranties will be rendered void if you install aftermarket parts - While it is common in Hong Kong to add modifications to a new car, it is important to note here that any after-market parts will not be covered by the warranty, and some manufacturers specifically state that if parts are added, the warranty will be rendered void. This often also includes tires, so be sure to read carefully before replacing the tires.

The link between warranties and insurance

Believe it or not, there is a major link between warranties and comprehensive car insurance in Hong Kong. The most important being that warranties do not usually cover replacement or maintenance of parts that are damaged in an accident.

This, therefore, makes it important to secure the best car insurance policy available, as, should you be in an accident in your brand-new car, any damage to the body or parts will be covered by the plan. If your car is still under warranty, Kwiksure's car insurance experts recommend taking the vehicle back to the dealer you bought your car from for repairs. There is a high chance the dealer will be accredited with your insurance, which means repairs should be covered (assuming you are not at fault). This also ensures that your warranty will not be voided.

To learn more about what type of insurance is best for your new car, contact the experts at Kwiksure today.