Extended Warranty?

[Bumper]

The factory warranty on my 2001 Audi TT Quatro will be up in 3K miles. The car currently has 47K miles on the odometer. What are the general thoughts on extended warranty? The dealer has offered me an Audi backed plan that is 3 years and will take me to 100K but the cost is $2950!! That seems like a lot of money to me but this car has not been the most reliable as it has had a bunch of stupid electrical issues. Plus, everything on this car is so difficult to get to that even the most simple repair items become very expensive. I was told to stay away from aftermarket warranties as most are not worth the paper they are printed on. What are the general thoughts of everyone here? Thanks fellas!

 

[XS650]

When you buy an maintenance insurance policy you are betting against the house. The insurance company is betting that they will make enough money off you to pay your bills, their overhead and a profit.

Unless you have some good insider knowledge about your car or can't afford the risk, you are better off self insuring.

For everyone who comes out ahead on that type of insurance, there are a whole bunch of people who come out losing money on it.

You also need to consider the peace of mind an insurance policy buys you.

 

[rshaw125]

Thats a steep price for a short policy. The only time I have bought one is on a new car. It was a policy from Ford on a new Explorer. I knew going in that the policy price can be negotiated and I got it for just over $1000 good until 100,000 miles.$50 deductable.
I am still not sure I shouild have bought it but now I have it.

 

[Brons2]

You can buy a manufacturers extended warranty from any dealer. Shop around!! I didn't purchase one, but I was able to find a 6 yr/100K warranty online through another dealer that was half the price of what my dealer wanted.

 

[swedishiron]

If you can afford the $3000 - put it in a seperate savings account. Repair the car when the need comes.

I've owned an Audi and Volvos - Audis do have horrible electrics in my opinion. I've NEVER had a power window, sunroof, power locks fail on any of the Volvos i've owned. The lowest mileage Volvo i ever had was 90,000 miles. Never had a transmission fail either.

The Audi had automatic was dying when i got rid of it - not a single power window or roof worked on it.

I agree - shop around for a lower priced one but if you have $3000 to spend just save the money in a seperate "car" savings account until you need to pull some out. Odds are you won't need to spend $3000 in the next 50,000 miles of service.

I drive a 1988 780 Bertone Volvo that has 262,000 miles - all electrics work, A/C etc - drive it out of state paid $2800 for the car. Can't fathom paying $3000 just for a warranty.

 

[Storm897]

Below are 2 Warranty Ccompanies which will give you an idea of what waranty companies are charging. I already typed in your year, make, model, etc.

60 Months/100,000mi with $0 deductible is $3,189 at
1SourceAutoWarranty

60 Months/100,000mi with $0 deductible is $2,818 at
WarrantyDirect

 

[W.T.McGlynn]

Subject: Auto Warranty
The ONLY warranty to consider is through the dealer.
The price -is- negotiable.

Many times the other companies go broke and you are holding a piece of paper that doesn't mean squat.

The dealer warranty will be honored at any dealer.
Plus hopefully you get a qualified mechanic to fix your car wright the first time.
Bargain down that price,it's seems too hi.
Good Luck.

 

[Bumper]

As always, thanks fellas for all of your great advice. I am going to shop around and try to negotiate with the dealer. If I can't get him to lower his price then I am just going to keep a car savings account as was suggested. I'll keep everyone posted!

OT- This is the best car board around and the only place you can get good honest information! Thanks to all!

 

[crossbow]

Make sure to verify its an actual dealer warranty. Last time I got my extended warranty, I was told it was an "offical" mazda warranty extension. Which was a load of bull. It was just another 3rd party warranty onTOP of my current warranty.

They aren't really extended persay, just doubled up warranties. Aka if you buy it, cancel it 3 months later, you lose a set % of the overall warranty cost amount, because its been active....it doesn't actually start when the original one ends. It starts the second you buy it.

 

[michaelc80]

quote:

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Originally posted by swedishiron:
If you can afford the $3000 - put it in a seperate savings account. Repair the car when the need comes.

---

Most outstanding advice. An added bonus is the interest it will earn while it's sitting in an account.

 

[ekpolk]

Another thought: the third-party wtys are definitely not governed by the Moss-Magnuson Warranty Act. Thus the issuer can include all manner of bogus conditions precedent to being covered. So if the paper says you have to have the Pope testify that he saw you change your oil every 300 miles or 3 days, that would (in theory, yes it's a silly example) be allowed. I don't think that these are worth the paper that they're printed on.

 

[rpn453]

As others have said, extended warranties are offered only so other people can make money off of you.
Invest in a factory service manual, or at least a Chilton/Haynes, instead. Free yourself from dependence!

 

[kenw]

the extended warranty we got for our 93 Plymouth minivan was better than MS founder's stock. For the price of a $1400 policy, we received (all after the normal 3/36):

2 rebuilt transmissions
2 replaced ABS systems, inclyuding a couple of wheel sensors, the main controller, pump, etc
a new AC compressor
a new AC evap coil, dryer, etc
a new alternator
a new accessory belt tensioner

for the $1100 waranty (carmax) on a 97 camry (15k miles, good until 115k miles):

we never used it. But at $1400 for a compressor, I slept better.

***********

are they worth it? depends....

 

[XS650]

quote:

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Originally posted by Bumper:
As always, thanks fellas for all of your great advice. I am going to shop around and try to negotiate with the dealer. If I can't get him to lower his price then I am just going to keep a car savings account as was suggested. I'll keep everyone posted!

---

That's a good approach. I think you will be able to find a better price. I'm usually personally against extended warranties, but you do need to consider your ability to pay for an unexpected problem and also what helps you sleep at night.

In the early 1970s I started a big spreadsheet (on paper, this was before PCs). Everytime we bought an appliance or piece of electronics, I found out what a service policy or extended warranty would cost. Then I put that much money in savings each month.

What I found out was that the amount of money I wasn't spending on extended warranties/service contracts more than paid for all repairs. After a few years I actually accumlated enough money in that account to replace items as they wore out or got obsolete. I stopped the spreadsheet after about 8 or 10 years, but the lesson has stuck with me.

 

[rjundi]

...

 

[Lost Pup]

Check the alloted cost of "Diagnostic" and "Labor" job timeson the third party plans. Normally covered under Factory plans the third parties have a cap on these hourly rates. Local Ford Dealer rate is $90 hour and the plan might only cover $ 50 hour with you covering the difference.

Consider this when comparing Total Cost of Ownership of the third party warranty plans.