Difference Between Warranty And Insurance

Car warranty and insurance come into the picture whenever there is a purchase of a car. While warranty stands guarantee for free repair or replacement if the car sustains such problems while the latter covers the car against theft or damage, by the insurer.

By Carandbike Team


3 mins read


Published on August 1, 2022

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  • Warranty is a promise by the seller against manufacturing defects
  • Insurance means the car is insured against theft, damage or other such acts
  • Both insurance and warranty are in favour of the car you purchased

When you buy a car, you have a warranty paper and an insurance certificate. The warranty is given by the manufacturer while the insurance is given by the insurance company. Both these are required by the car owner for total protection of the car. You need to know the exact difference between the both. Why do you need them for both a new car and a used one?


A car comes with a warranty with a period of warranty mentioned. The manufacturer gives you a guarantee that the car is free from defects. It is a legal promise that in the event of any defect in the car owing to the manufacturer, there will be free replacement of the parts or the entire car. It begins on the day the car is rolled out. The company assures you through the warranty that the car will function smoothly as long as you drive it and the car will function normally without any manufacturing defect. The warranty doesn't cover any defect or damage arising out of negligence on the part of the owner or the driver. The moment your car begins to malfunction without any external agent responsible for that, you remain carefree about putting the car back in order by the manufacturer free of any charge or cost. The warranty terms differ from manufacturer to manufacturer. The basic things are almost the same. The engine, electrical parts, gears, and many other parts are included in the warranty. Generally, the accessories are not covered.



The cover

There is an extended warranty also given by the manufacturer if you pay something extra. The warranty in this case will remain in force for an extended period. Whatever it is, the warranty covers minor or major repairs or failure of any component of the car. Warranty may turn out to be a matter of competition between the car manufacturers, the bigger the more popular. The warranty cover may vary from 6 months to maybe years together.



Car insurance is likened to life insurance. Any insurance policy looks at possible financial losses incurred by some untoward events on the road in the case of cars. The car can be damaged or a person may be hit by the car that warranties compensation. This compensation is paid to the victim by the insurer. It is known as third-party insurance. Car insurance might cover theft, damage, etc. caused during riots or vandalism. Other causes are collisions, fire, natural calamity, and so on. Car insurance covers hospital expenses and compensation to the person hit by an accident caused by the car that is insured. If your car is insured, it will cover all your financial costs after an accident. If your car is not covered by insurance, you will have to pay for the expenses from your pocket. Insurance of your car is provided by a standalone insurer. They have some terms and conditions that you have to follow. When you take insurance for your car, it is imperative that you read the fine prints of the document so that nothing skips your attention. Car insurance and warranty are necessary for your car and you must have them in place.


You need car insurance and a warranty for a used car also. When you own a pre-owned car, you know that its parts are old and are wearing off with age. They need constant repair or replacement. If you have a warranty for your used car, your car will continue to function efficiently after every incident of accident or malfunction when these are either repaired or replaced under the warranty. Hence, you should look for a seller of used cars who can give you the warranty of the car. Even if you own a used car, it is susceptible to damage or defect or even accidents. If the car is insured, you are free of worries about having to spend for getting it back in order. Moreover, you must have third-party insurance done for your car which is legally binding on you.

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