The real problem with Kia warranty ruling

You may have heard the news today about Kia being censored by the Advertising Standards Authority because of its seven year warranty.

ASA ruled the advert was misleading because although it says it is a seven year warranty, it also includes a 100,000 mile limit, which wasn’t made clear on the advert.

Cue Warranty Direct firing out a statement about ‘smoke and mirrors’ and customers being ‘sold on a headline’.

But Kia has responded to the criticism by clarifying the ruling. Only two changes need to be made to the advert in question. Firstly, the wording has been changed from "Terms and conditions apply" to "Terms and exclusions apply". Secondly, the 100,000 mile criterion was added to the radio advert.

On announcing the acceptance of the ruling, Simon Hetherington, Marketing Director, Kia Motors (UK) Limited said: "Kia Motors (UK) Limited believes that its seven year warranty, which was first introduced on the European-built cee’d in April 2007 and then on the entire Kia line-up from 1 January 2010, remains the best in the industry.

"As a sign of its commitment to customer reassurance, and as an industry first, all Kia Approved Used Vehicles have been supplied with a warranty equal to that when they were new since April 2009 – this means that any Kia registered from 1 January 2010 and sold under the Approved Used Vehicle scheme will come with the same seven year warranty as a new Kia."

However, the ruling has raised a good point. Car warranties are notoriously complex, with various caveats and exclusions, so what should a manufacturer be allowed to advertise?

For example, people may complain Kia’s seven year warranty will never cover 100,000 for a heavy user of their car. However, check the terms and exclusions and you will see there is an unlimited mileage limit for the first three years and then a 100,000 mile limit between the fourth and seventh year.

It seems like manufacturers are using two criteria for measuring how good a warranty is – one to confuse and one to actually show the value of the warranty.

So why not just use one? Time-specific warranties with mileage limits are not the same policies for everyone – a heavy user may hit 100,000 miles in 2 years while a low user could reach the seven years with 10,000 miles still left on the clock.

The answer lies in Vauxhall’s excellent offer. At Vauxhall, all new cars will now come with a ‘lifetime warranty’ – or 100,000 miles. Now, there is no time limit. Simply drive 100,000 miles in total and you’re covered.

Although, it is only a matter of time before critics come calling about the ‘lifetime’ part of the deal – although it is possible, it isn’t likely and is sure to follow Kia into the line of sights of ASA. However, if Vauxhall were to remove it, it is still a very good offer.

As cars depreciate in value as mileage increase, the components and parts depreciate physically. Therefore it makes sense for somebody to drive more to have a shorter warranty.

And, after all the fuss about Kia’s run-in with ASA, an unlimited first three years and 100,000 miles between the fourth and seventh, their warranty still stands up as a fantastic warranty indeed, whichever way it is phrased.

The conclusion really should be the problem with these warranties is not in the small print, it’s in the headline. Change that, and let customers see for themselves some of the excellent warranties on offer from the likes of Vauxhall and Kia.

While the ASA was perfectly within its rights to ban the advert, the real message should be that Kia don’t need to hide any information about the warranty – it’s still very, very good.