Why do new car warranties differ?

You may have seen advertisements for Kia offering a 7-year warranty on their new cars however one of Australia’s biggest car retailers Toyota only offer 3 years. Why the difference? Is it because consumers have such high confidence with the Toyota brand they don’t need to offer 7, or do Kia offer the extra 4 years because they know peace of mind is a big factor in the car purchasing decision?

Is it deeper than the fact that they might just be using warranty as a marketing tool to sell more cars?

We grew up during a time when all cars had a standard new car warranty of 3 years, with a maximum 60,000 kilometers to be covered within this time.

Fast forward to 2017, now all the manufacturers have their own offerings ranging from 3, 5, or 7 years warranty along with various maximum kilometres within the warranty period (some even unlimited).

Why has a warranty period longer than 3 years become a marketing tool, rather than an industry standard?

Under Australian Consumer Law (ACL), the warranty period needs to be ‘reasonable’. Section 54 of the ACL states any product has to be acceptable in appearance and finish, free from defects, safe and durable, all according to what a ‘reasonable consumer’ would think.

Would 3 years be more than sufficient, and if the case, should this be enforced by ACL? Or would 5 be the magic number?

How many years would you deem as a fair warranty period? Would a 7-year warranty be a deal-maker as was the case with Tori and her KIA Rio? Let us know your thoughts in comments below.