UK warranty specialist MB&G states that the companies that filed the fewest number of claims for the past year are those from Japan and Korea. Honda has received the top spot in this study.
MB&G noted that as drivers have decided to keep the cars until they’re in their fourth years or even up to six years, there are some drivers who will be surprised with the type of maintenance costs that they’d have to incur.
Kevin Pearce, a director of MB&G, said that modern day cars are “reliable” but that errors are more common in the fourth or fifth years and if “the mileage reaches 70-100,000 miles.” He explained further that the cars feature plenty of electronic equipment that controls the engine management automatic gearbox and a small software error can often create issues.
Of course, there’s wear and tear that have to be considered. MB&G says that the average age and mileage of cars being is increasing, but generally, the corporate/SME market doesn’t like to go beyond the warranties.
Pearce said that each year, tens of thousands of warranties are being processed. The average age of those cars are also increasing quite significantly. Pearce added that for now, there are more drivers who would drive around, thinking about purchasing a warranty for “extra peace of mind.”
The survey is focused solely on the frequency of claims rather than the claim’s average value since it can differ from one manufacturer to the next, Pearce said. The average claim value is dependent on the price of the parts as well as the labor rates, which can differ by region, he added. Currently, the cars being managed by MB&G have their mileage and average age increasing. However, a number of corporate or SME market have a tendency not to extend the warranties offered by the manufacturer.
Pearce continued by stating that the company continues to manage tens of thousands of warranties on an annual basis. The company remains to see that the average age of these vehicles is indeed increasing which reflects the extended ownership cycle. He added that the company is starting to see a number of drivers that plan to buy warranty in order to have that peace of mind, with some of them even doing so for the first time.
The corporate sector though has still to manage the various risks linked to a number of older cars. He continued by stating that most companies keep their cars up to four years and some even go as long as five years. If any issues come up or any failures are experience, everything is funded using the company’s annual maintenance budget.
By deciding to cover the older and higher mileage cars, even high-value cars, with warranty, he said further, the fleets would be able to manage the risks efficiently. This will then allow a budget of a more finite cost. The list shown is based on MB&G’s experience of a wide range of cover levels, mileages, and ages, with different types and quantities of vehicle for each cover. It makes use, as a percentage, of a number of vehicles at risk versus the frequency of claims versus those vehicles. It does not however, consider the type of claim of the account average claim. It is possible that average claim costs may display a different order.