Korean auto maker, Kia, has announced a seven-year/150,000 km bumper-to-bumper, parts-and-labour warranty for all vehicles sold and registered in Europe from January 1, 2010. This is far-and-away the longest fleet-wide warranty ever offered by a car manufacturer anywhere at any time and the move could have far reaching consequences. Brands with big reputations are charging two, five, even ten times as much for a car as Kia, yet they are clearly unprepared to guarantee their quality to the same extent, and this might well be the point the public finally understands that new price does not reflect quality, that quality is measurable, and that reputations for quality are distinctly at odds with reality. At very least, as the warranties are fully transferable to subsequent owners, Kia resale values should skyrocket.
Kia’s warranty coverage does not in any way appear disingenuous – it has minimum exclusions, is transferable to subsequent owners and its press statement was quite clear that “this is not an insurance company’s ‘extended warranty’ - the Kia warranty is a comprehensive manufacturer’s warranty with ‘bumper-to-bumper’ coverage from Day 1 until the end of the seventh year.” For the first three years there is no mileage limit, unless the vehicle is being operated as a taxi, in which case the limit is 150,000 km. For years four-to-seven, for all users, the warranty limit is 150,000 km.
There are also some components that are not covered for 7 years, but once again, the finer details seem reasonable as some items have a natural limited lifetime/durability: vehicle paint (5 years/150,000 km), audio system, navigation and in-car entertainment equipment (3 years/100,000 km), accessories and batteries (2 years). Wear and tear items such as tires, brake pads do not come with a time or distance warranty either.
We expect the new warranty to become a disruptive force in the auto market as it will add significant pressure to other car manufacturers to stand behind their production quality and offer similar guarantees of workmanship. Only last week we ran a story on the results of the ongoing research carried out by UK manufacturer Warranty Direct, which showed that reputations for quality are distinctly at odds with reality.
Automotive warranties were once 6/6 or 12/12, being six months of 6,000 miles or 12 months or 12,000 miles, whichever came first.
In the sixties, Chrysler upset the industry and offered a five year 50,000 mile warranty, but the company’s faith in its products was unfounded and it and all the other manufacturers which had rushed to offer similar warranties, all quickly reverted to the tried and true 12 month/12,000 mile warranty which more accurately reflected the quality of the products of the period. In recent years however, the quality of automotive product has improved dramatically, and Kia and its parent company, Hyundai, seem intent on bringing this to the attention of the consumer in the most logical way possible – by offering a warranty on their vehicles which other companies will be very reluctant to match.
Currently, the world’s best warranty is only available in Europe, though it will be available in more than 20 participating countries and local terms and conditions will apply. It will hence be interesting to see if Kia will offer the warranty in other markets.
Please note that the warranty applies only to new Kia vehicles sold and registered in Europe after January 2010 and excludes the company’s K2900, K2700 and K2500 commercial vehicles.
Finally, a hearty “well done” to Kia. It is leading the way towards a more honest relationship between car makers and buyers and its warranty means that peace-of-mind now comes as standard with every Kia - 2,555 days or 150,000 km of worry-free motoring and lower costs of ownership.
The ‘peace-of-mind’ provided by the Kia 7-year warranty simplifies the whole ownership experience.