Skoda Australia increases warranty to five years

Skoda has bumped up the warranty period for its new car range from three years to a more generous five years, with no kilometre limitation.

That gives the Czech brand a key advantage in the showroom, as the majority of its mainstream rivals continue to offer just three-year/100,000km warranty terms. The new warranty applies to all private, general fleet and government sales, and essentially replaces the previously optional two-year warranty extension.

Kia, Citroen and Hyundai are the primary exceptions, providing seven-, six- and five-year warranties respectively, and all under unlimited-kilometre terms. Mazda only offers a three-year warranty period, but is slightly better than the norm by not applying a kilometre limit as well.

There’s one catch to Skoda’s new warranty terms however: if the car is being purchased for commercial purposes, then the warranty only applies for five years or 150,000km, whichever occurs first.

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"Given that some 50 per cent of our customers were going for the optional extended warranty, it was logical that we add it to all models as standard," said Skoda Australia Managing Director Michael Irmer.

"A Skoda is not only more economical to run and service than some rival Japanese vehicles, its warranty now exceeds their standard by two years.

The extension of Skoda’s warranty from three to five years follows Skoda’s move to introduce a guaranteed future value scheme, which sees dealerships buying back cars at the end of the finance period for an agreed price, giving consumers peace of mind about residuals.

The guaranteed future value scheme also gives owners the option of paying the same amount for the car, should they decide to keep it beyond the lease period. Refinancing is also an option, as is using the agreed value amount as a credit on the purchase of another new Skoda vehicle.

With all new Skodas now boasting a five-year warranty as standard, three-year residual values should rise accordingly.