PrimeGuard Insurance Company and its affiliated companies, 1SourceAutoWarranty, First Assured Warranty Corporation and WarranteeWise, Inc. appear to be going belly-up. If you bought an aftermarket used car warranty, you might want to check the policy's underwriter. Good luck.
http://www.hawaii.gov/dcca/areas/ins/ins_div_actions/primeguard/
Aftermarket auto warranty companies bankrupt
- Thread starter Cogito
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Another reason not to buy an extended warranty. You're basically paying for a major repair whether you need it or not, then you have to worry about the warranty company trying to weasel out of paying.
Exactly..that's why I stayed away. I don't think they fall under the same requirements as health and life insurance. ![[Frown]](images/icons/frown.gif)
For one thing these aftermarket policies are NOT warranties. Only the auto manufacturer can issue a warranty. Extended warranties from the auto manufacturer are a reasonably safe bet. (well, as long as they're not issued by U.S. auto manufacturers teetering on the edge of bankruptcy...) The aftermarket policies are really extended <i>service</i> contracts. Don't dismiss the possibility that at least some of the holding companies' underwriters routinely pass a memo when to file for banruptcy on behalf of the named company when they feel there's too much potential claims exposure as the number of affected vehicles get on in years. (then reorganize under a new name and begin selling contracts again...)
Ray H is right!
I have always purchased HondaCare Extended Warranties. I once had to fight a HONDA dealer for it because he claimed his '3rd Party' coverage was soooo much better.
I have also once had the Toyota version and needed a big ticket repair (AC Compressor) , dealer pulled up my VIN and bingo, no problem.
quote:That is how it goes. Dealerships get a bigger cut from aftermarket warranty/service companies than they get from corporate. Our dealership always pushed the coverage that put the most money in their pocket upfront, screw the customers. I was in a dealership for over 10 years and I felt so bad for people who bought into aftermarket warranties (First Extended springs to mind). I watched people literally cry when they found out their work was declined due to the the fine print on their service contracts. Of all the aftermarket companies, GE Cap was the one company that gave us the least hassle.
Originally posted by HondaMan: Ray H is right! I have always purchased HondaCare Extended Warranties. I once had to fight a HONDA dealer for it because he claimed his '3rd Party' coverage was soooo much better.
Kestas
Staff member
quote:This jives with what I've been reading lately... that companies now use bankruptcy as a tool of business, and not as a demise of their business.
Originally posted by Ray H: Don't dismiss the possibility that at least some of the holding companies' underwriters routinely pass a memo when to file for banruptcy on behalf of the named company when they feel there's too much potential claims exposure as the number of affected vehicles get on in years. (then reorganize under a new name and begin selling contracts again...)
I've delt with a few where I work. Generally they will pay for the part that broke and the labor to change that part.
So say a sprag explodes in your auto transmission. It destroyes several other parts as well as contaminating the torque converter.
They will only cover the broken sprag. If you want it done right you must pay for the other repairs.
I did software work for an aftermarket warranty company. It was scary how many ways they had to get out of claims. They really wouldn't cover anything - they made lots of money though. I learned to never buy the extended warranty. the only exception may be if it is backed by the mfg - but I never had much luck with the factory warranties before they expired.
The HondaCare has bought two CVT automatics for my brother's Civic GX, so far. I normally dont buy them, but I also dont buy cars with unusual features, like a CVT.
A Penske dealership tried to sell me a non-Toyota service policy for my new Tundra. The brocures are printed up to fool you into thinking it is genuine Toyota. On a new vehicle you can wait until one day or one mile before the factory warranty expires and still buy the factory extended service policy. By then you should have a good idea how long you intend on keeping it and if it has chronic expensive problems.
Buyers would be far better off getting a quote on the EW they're considering, and then just bank that money for themselves. Yeah, yeah, I know, how many will really do this... At least they will have been able to blow the funds in question on themselves. Another angle to consider: unlike the new car wty, these contractual plans are NOT governed by the Moss-Magnuson Warranty Act. They can require that you adhere to rituals such as a 3/3 oil change, and then refuse to replace a bad door handle if you can't prove you did the oil changes. Bad deals all the way around.
I'm glad i bought mine from Ford/Mazda.
I always refuse extended warrantys. The reasons listed above are why.
quote:EXACTLY!!! Most extended warranties are gonna run $1500 or more on a new vehicle to even get you to 75k miles or more. And, that $1500 will be financed, which will really be $1800 or so. Take $50 per month, stick it in a mutual fund ($1800) and at the end of that 36 month period, you will have about $4000. No problems for 24 more months? Heck, you've got almost $5500 or more!!
Originally posted by ekpolk: Buyers would be far better off getting a quote on the EW they're considering, and then just bank that money for themselves.
Remember Warranty Gold? I bought two of them a few years back. I had one repair paid for and then they started to go through financial trouble. Warranty Gold told me they couldn't pay for any more repairs even though they still were selling new service contracts. I filed a complaint with my credit card company (I paid for the warranties with the cc) and they gave me a refund.
I bought an 'Interstate' extended service plan through the ford dealership I bought our windstar from. http://www.inds.com/ The van had a few months and few thousand miles before the factory warranty ran out when I bought it. It ran me ~$1200 for 3yr/75mi B/B coverage with a $100 deductable. So far it's covered rear wheel cylinders and a power steering pump. If you needed a transmission replacement, 4x4/AWD work or major HVAC work, these service plans could easily pay off. I've got 10mo/14Kmi left & will be hitting them up for front sway bar end links soon & I'm keeping my fingers crossed anything major happens w/in the warranty timeframe. Other than that it's a crap shoot. I not sure I'll buy one again. I'll know once I ride this one out!
Joel
Wife bought a new 2005 Eddie Bauer pimped out Explorer in July of 2005 during the "give away days". Ordinarily I don't believe in the "extended warranties" on anything. But her Explorer has more advanced electronics than most Apollo space mission rockets had. AKA, more to go wrong . She paid $900 for Ford's top premium ESP plan that covers her to 5 years and or 75,000 miles, which ever comes first. Considering the cost of repairs now a days and the potential for electronic problems, not to mention tranny problems, the $900 seemed reasonable for Ford's premium coverage. She's already gotten free rental vehicles while her Explorer was in for waranty work(electronic related ![[Roll Eyes]](images/icons/rolleyes.gif)
) .
Whimsey
. She paid $900 for Ford's top premium ESP plan that covers her to 5 years and or 75,000 miles, which ever comes first. Considering the cost of repairs now a days and the potential for electronic problems, not to mention tranny problems, the $900 seemed reasonable for Ford's premium coverage. She's already gotten free rental vehicles while her Explorer was in for waranty work(electronic related ) .
Whimseyquote:I did the exact same thing when I bought my '04 F150 used with 15000 mi from the Ford Dealer ship. I even got tire road hazard (regardless if they are aftermarket) and vehcile rental.
Originally posted by Whimsey: Wife bought a new 2005 Eddie Bauer pimped out Explorer in July of 2005 during the "give away days". Ordinarily I don't believe in the "extended warranties" on anything. But her Explorer has more advanced electronics than most Apollo space mission rockets had. AKA, more to go wrong
quote:Bank the money you're going to spend on the contract. Exactly. Many years ago I worked in a Honda/Kawaski dealership. We sold serivce contracts and they were always big money makers. The cost vs. payout numbers are horrible on these contracts. At the time, for every $100 that were paid in, only $5 were ever paid out. Thanks anyway. If I thought my luck was going to be that bad I'd have purchased a different brand vehicle.
Originally posted by ekpolk: Buyers would be far better off getting a quote on the EW they're considering, and then just bank that money for themselves. Yeah, yeah, I know, how many will really do this... At least they will have been able to blow the funds in question on themselves. Another angle to consider: unlike the new car wty, these contractual plans are NOT governed by the Moss-Magnuson Warranty Act. They can require that you adhere to rituals such as a 3/3 oil change, and then refuse to replace a bad door handle if you can't prove you did the oil changes. Bad deals all the way around.
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