Extended Warranty, worth it?
- Thread starter The Critic
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Not me. I ran my warranty to 100K through the Hyundai dealer (and 10 years, but it's going to take me about 2 1/2 years to do 100K, so the years don't matter. Hopefully, the alternator or something will go wrong right before it hits 100K.. Instead of right after..
I bought the extended $1000/7yr./100k warranty from Honda when I got my 2001 Civic. I did it because this was the first year of this model and was concerned about possible issues down the road.
To date, the only thing that's happened was the A/C compressor thermal protector circuit failed. $50 deductible later, it was fixed. Quickly approaching 92k and hopefully I won't need to use the warranty. So I'm out $1000, it was rolled into the payments and I have peace of mind.
Now I didn't get that warranty on my 2005 CR-V because it's in its 4th model year and I expect everything to be OK. They put the filter on the transmission and that was the biggest issue with the 2nd-gen CR-V's if I've read everything correctly. That and burned valves.
To date, the only thing that's happened was the A/C compressor thermal protector circuit failed. $50 deductible later, it was fixed. Quickly approaching 92k and hopefully I won't need to use the warranty. So I'm out $1000, it was rolled into the payments and I have peace of mind.
Now I didn't get that warranty on my 2005 CR-V because it's in its 4th model year and I expect everything to be OK. They put the filter on the transmission and that was the biggest issue with the 2nd-gen CR-V's if I've read everything correctly. That and burned valves.
An extended warranty was worth it for me on my 1997 Pontiac van.
Bought the van new and a year later paid $870 for a 7 year 100k mile bumper to bumper warranty with $50.00 deductible per visit. I figured it was a warranty or take a bath on trading in a 1 year old vehicle !! ( Suspected poor design & build quality.)
My warranty claims experience was very good. Over the 7 years, I needed the power sliding door module and motor, rack and pinion asssembly, both power window motors, intake manifold gaskets, and the radio replaced. Surprisingly just after the 3 /36 GM warranty expired !
I suspect they paid a few thousand dollars of my repair bills. No hassles and they paid the repair shop via credit card.
My advice is to read the policy coverage very carefully and make certain you can choose the repair facility.
FWIW, I have since bought two Toyotas and never had the poor design / build fear to warrant an extended warranty..... never needed to repair either Toyota yet.
Bought the van new and a year later paid $870 for a 7 year 100k mile bumper to bumper warranty with $50.00 deductible per visit. I figured it was a warranty or take a bath on trading in a 1 year old vehicle !! ( Suspected poor design & build quality.)
My warranty claims experience was very good. Over the 7 years, I needed the power sliding door module and motor, rack and pinion asssembly, both power window motors, intake manifold gaskets, and the radio replaced. Surprisingly just after the 3 /36 GM warranty expired !
I suspect they paid a few thousand dollars of my repair bills. No hassles and they paid the repair shop via credit card.
My advice is to read the policy coverage very carefully and make certain you can choose the repair facility.
FWIW, I have since bought two Toyotas and never had the poor design / build fear to warrant an extended warranty..... never needed to repair either Toyota yet.
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FWIW, I have since bought two Toyotas and never had the poor design / build fear to warrant an extended warranty..... never needed to repair either Toyota yet.
I have an '07 Camry XLE with climate control,push button start,power everything,heated seats etc.
First year model and there have been plenty of articles lately on Toyota's quality slipping.
I went with a discounted $880 7yr/100K Platimum Toyota warranty and sleep well at night.
Honda's quality has been slipping through the years as well. The 5-speed Automatic in their new Civic is a completely new unit.
Not sure why none of my problems in the Saturn would have been covered by an extended warranty. They were all mechanical failures.
Shouldn't be a problem in this case. The policy is a genuine Hondacare policy which is redeemable only through a Honda dealership. It includes trip interruption, rental car coverage, and roadside assistance.
I had one on my 1995 Ford Contour, all it ever paid for was...let's see...swaybar end links (about a $60 repair, if that) and an air conditioner accumulator (maybe a $120 repair), and a waterpump ($100 repair) There was a $50 deductible, too, and I had to take it in twice for them to find out that the accumulator was leaking (charged the deductible each time). So in reality, I basically saved $20 on that repair and $10 on the other one, and $50 on the waterpump.
Not bad for an extended warranty that cost about $1000..
Oh, when the oxygen sensor crapped out at about 72k I just bought one and replaced it myself, it ended up being $5 cheaper than the deductible...
Not bad for an extended warranty that cost about $1000..
Oh, when the oxygen sensor crapped out at about 72k I just bought one and replaced it myself, it ended up being $5 cheaper than the deductible...
Actually I think I got the motor mounts replaced under that extended warranty too, but that still doesn't even remotely come close to making it worth it.
It's an old story, but...
Way back when we bought the SVX (1992, 1st year for the model) the dealer rep STRONGLY advisded we purchase the 100K/7year, 3rd Party, basically bumper-to-bumper $50 deductible warranty for $1,100: the kicker was that IF you didn't make a claim against THIS warranty and the 100K OR the 7 year period expired you got a 100% reimbursement FROM THE DEALERSHIP in writing.
7 years and about 95K later I picked up my check for $1,100!
Now THAT WAS a very good warranty!
Cheers!
Way back when we bought the SVX (1992, 1st year for the model) the dealer rep STRONGLY advisded we purchase the 100K/7year, 3rd Party, basically bumper-to-bumper $50 deductible warranty for $1,100: the kicker was that IF you didn't make a claim against THIS warranty and the 100K OR the 7 year period expired you got a 100% reimbursement FROM THE DEALERSHIP in writing.
7 years and about 95K later I picked up my check for $1,100!
Now THAT WAS a very good warranty!
Cheers!
Wow. That is the first time I have heard such thing. I wish I could get my $500 refund.
Kestas
Staff member
It's kind of an odd concept that the dealer would sell you a car, then say you need an extended warranty because the car probably sucks.
I think it depends on the make/model/reliablity, I bought a used 2005 Grand Caravan and went ahead and bought an extended warranty for it based upon talking to other caravan owners and looking for reliablity data on the net. I figure if it helps you sleep better at night buy it.
News flash..its Insurance. People buy home insurance, auto insurance, life insurance. Of course on the average they will make money.
The key here is that you fix your costs it becomes a known quantity. No surprises. Negotiate the warranty and buy a dealer warranty. Also pay a few bucks more to get zero deductable. Then the dealer has the whold bag.
I got extended warranties on my last 3 vehicles. I made out on one and lost on the other and the jury is out on this one yet-although I have collected about half. I have always gotten some insured repairs so far. So you can expect to collect some on it. That brings your costs down and you have peace of mind.
Buying warranties on appliances and smaller ticket items I agree is a waste of money. And don't forget they are covered on yhour credit card.
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News flash..its Insurance. People buy home insurance, auto insurance, life insurance. Of course on the average they will make money.
Negotiate the warranty and buy a dealer warranty. Also pay a few bucks more to get zero deductable. Then the dealer has the whole bag.
$0 ded is good advice. Take a look at the rpice for $0 ded and $100 ded or whatever and figure out how many claims you wioul have to make to make up the difference. On my Corvette, 2 claims would put me money ahead by buying $0 ded vs $100 ded. Also, on $0 ded, they have more incentive to really fix the problem the first time.
I got about 4 years and 40,000 miles extended coverage beyond the original warranty for $1400. If my $50k Chevy doesn't need $1400 work in year 4 through 7 I will be so deliriously happy I won't car that I lost money on the extended coverage. That $1400 even covers the nav system and all the other el;ectronics in the car.
I did for my Scion as well.
There's more to a warranty than just "if my car breaks, they fix it free"
You get rental cars, towing, and other benefits as well.
You also get to transfer it if you choose to sell your car - making it more valuable to potential buyers and you.
Scott
I don't think you guys are seeing the forest for the trees. And JavaMan made a good point about the gambling angle. I look at it kinda like insurance. There is one and only one reason any company, be it manufacturer, shady con artists or anyone in between is offering car warranties - TO MAKE MONEY. They are not doing it to provide great customer service and gain your undying loyalty. They end up making a considerable profit on these warranties in the long run overall. Naive consumers just keep stocking their coffers as usual in the grand scheme of things. No thanks, I'll keep my money and gamble.
The insurance viewpoint is "spot on".
An important part for all to recognize, extended warranties don't need to be purchased as you take new car delivery. Many policies allow for purchase as long as the original manufacturer's "bumper to bumper" warranty is in effect.
My approach has always been, get a feel for the car's build quality during the first few years of ownership and based on that assessment try to "offload risk" of significant repair incidents to the insurance policy.
I did so on my Pontiac and found it to be a very wise move (kept me from trading it in early & covered some nasty GM design and build errors).
On the other hand, my other vehicles have been very impressive with initial build quality. Never felt a need to offload significant risk of high repair frequency and costs.
Again the decision to buy a warranty is best supported by your assessment of your particular vehicle's design and build quality and your intended length of ownership.
An important part for all to recognize, extended warranties don't need to be purchased as you take new car delivery. Many policies allow for purchase as long as the original manufacturer's "bumper to bumper" warranty is in effect.
My approach has always been, get a feel for the car's build quality during the first few years of ownership and based on that assessment try to "offload risk" of significant repair incidents to the insurance policy.
I did so on my Pontiac and found it to be a very wise move (kept me from trading it in early & covered some nasty GM design and build errors).
On the other hand, my other vehicles have been very impressive with initial build quality. Never felt a need to offload significant risk of high repair frequency and costs.
Again the decision to buy a warranty is best supported by your assessment of your particular vehicle's design and build quality and your intended length of ownership.
Kestas
Staff member
Along these lines, the mantra is - "If you can't afford the loss, get insurance... otherwise don't bother with it". I insure the liability and loss of my car and home, and my health. Everything else I self-insure. This has kept a lot of money in my pocket over the years.
JavaMan put good thought behind his decision... "I can't afford the loss".
JavaMan put good thought behind his decision... "I can't afford the loss".
I have to contemplate that the extended warranty companies know what models are reliable and what one aren't. So for someone to say "I got a toyota and don't need one"... if warranty pricing were competitive and followed reason... their odds would be the same.
If someone got a complex vehicle and a good bumper-to-bumper warranty... and other owners of same vehicle had "typical problems" that weren't mission critical... and didn't notice the issue, ignored it, or didn't cash in on the warranty... the stats might lead the warranty company to offer a lower-than-proper price. A persnickety consumer who notices squeaks, steering play, bad UOA results
may come out ahead.
But then you're fighting for your money back instead of withholding it. Too bad noone has yet invented an extended warranty where you stop making car payments as you pay the mechanic of your choice for any necessary repairs.
And I don't see this type ever happening.
As others said, read the fine print. Apparantly powertrain stuff gets blamed on computers a lot, and warranties don't cover electrical stuff.
If someone got a complex vehicle and a good bumper-to-bumper warranty... and other owners of same vehicle had "typical problems" that weren't mission critical... and didn't notice the issue, ignored it, or didn't cash in on the warranty... the stats might lead the warranty company to offer a lower-than-proper price. A persnickety consumer who notices squeaks, steering play, bad UOA results
But then you're fighting for your money back instead of withholding it. Too bad noone has yet invented an extended warranty where you stop making car payments as you pay the mechanic of your choice for any necessary repairs.
As others said, read the fine print. Apparantly powertrain stuff gets blamed on computers a lot, and warranties don't cover electrical stuff.
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