I recently traded in my beloved 1993 Toyota Camry that had an endearing skin disease and an about-to-go clutch for … a 2005 Saab 9-3 turbo. I was deciding between a 2004 Honda Accord from a private seller or the '05 Saab, and I went for the one that’s fun to drive.
Anyhow, I got the 9-3 for $10,500 from Herb Chambers and had it checked out by my mechanic ahead of time who said it looks to be in phenomenal shape but “strongly, strongly” urged me to get an extended warranty. The dealership is quoting $3,731 for a 4-year complete coverage warranty and $2,539 for 2 years.
Adding almost $4K to the price tag of the car puts me significantly over my $12K expected cap for purchasing a car and it seems ludicrous to me that a 3.5-year-old car would need $2,500 worth of repairs within 2 years. But I also hear a lot about Saabs costing a lot to fix and having more frequent problems than other cars.
Whaddaya think? I know I’m dealing with a more complex car than my old Camry here, but is it really realistic to think that this car could pile up such high repair bills in the next 2-4 years to justify the extended warranty prices??
Thanks for any advice!
Take that $4k and put into a high interest rate CD for 4 years, you’ll come out light years ahead than if you bought the warranty
Thanks for your input!
This is just information about how I have seen these plans used. People will show up (and I am not saying unjustified) with many cosmetic type concerns (like moldings,trim pieces,blemishes on the dash,carpets that don’t clean up well. What I am saying is people do tend to find a way to use these policies. Great way to keep all those little things that break inside the car fixed,does your policy cover these things? is it a extension of Factory warranty (good if it is) what about rental car? read the fine print and reasearch if it is even possible your car could need this much repair.
Ask yourself why is your mechanic reccomending you buy the policy? I hope you give a lot of weight to what he says,he is the expert.
Well any car can have major expensive repairs. The profit to the salesman and company is usually over 50%. So for every $1,000 you spend the insurance company has less than $500 to pay for repairs or they will loose money, something insurance companies do not do. Some people will get nothing back and some will get a lot more than they pay. Most will get far less. In addition you need to keep in mind that the insurer has worded it to eliminate as many expensive things as they can. Remember that the seller is out to make money and they get to write the rules and set the price. They are not going to sell them at a loss so one way or another they are going to have you pay more than they will pay out. Would you gamble with a car dealer who gets to set all the rules and knows all the odds?
Thanks for your help.
Thanks, Joseph. I appreciate the perspective.
If you pay for the extended warranty you’ll be at $14K for a used car. For a bit more money you’d have a new Camry or Honda Accord. I’ve owned Saab’s and like them but I’m not sure I like this deal. The Accord has crisper handling than a Camry if better handling is what you are looking for. Recent Saab’s are not up to the quality of the older Saab’s. While I don’t think you’ll have $4,000 in repairs, over time the Saab will be more trouble than the Camry you’ve become used to.
I think I’d pass on this and look at a new car with a new car warranty. Include Hundai Sonata and Ford Fusion on your list to check out. I’ve heard of deal on new Fusions for about $15K that would be a lot better than the used Saab.
It is not ludricious for a repair to top $2,500. If the previous owner was not diligent in oil changes a Saab that needs a new turbocharger would easily top $2,500 for that repair alone.
I believe that with those prices, your own answer will be adequate for your needs. Who is going to make the warranty people pay for repairs?
That warranty price is marked up by at least 100% if not 200%. It is a pure money maker.
If it is backed by Saab(not third party) I would consider further negotiation if more comfortable offering half if not a third. However if third party don’t waste your money or energy they have absolutely no motivation to really pay out easily once the warranty company gets your money.
On SOME of the policy forms, and yes they are insurance policies, the dealer can actually write in the price he wants you to pay. He also may have three different pre-printed forms that offer EXACTLY THE SAME COVERAGE that he can use depending on how much money he thinks you may be able to spend.
In my customer’s experience they are worth about half of what the buyer thinks they are. The insurance company will try VERY HARD not to have to pay out on a claim. For instance, on one blown head gasket job they said that the electric cooling fan failed causing the engine to overheat. They offered to pay for the electric fan, but not the head gasket. One another they offered to pay for the head gasket, but not for planing the head or for the labor of installing a new timing belt even though the belt had to be removed to do the job. (They deducted part of thetime allowed for the gasket installation.) The customer was willing to pay for the belt itself. Remember they have MANY lawyers on staff, and you will have to pay for your own to sue them. Count on it, you will want to.
These policies are available on line if you REALLY must have one. That cuts out the middle man (dealer) and will be cheaper. Remember, you get what you pay for. Ask an independent mechanic what companies pay the best. Believe me, he knows which ones to avoid, and it’s probably most of them. Some shops refuse to work on cars with some company’s warrantys. Ask about that too.
I’ve yet to see a policy that will cover stained carpet or a blemish in the dash. What they DO cover is usually VERY limited by the fine print. Remember, the large print giveth, and the fine print taketh away.
Like I posted in the thread about the M35 and the rock in the codenser (my Service manager got a sick in the condensor covered) Service managers have a lot of room in what they get covered. Everything is not black and white in the what gets covered area. And I have replaced carpets that could not be cleaned (it did have a lot to do with the fact that the customer bought fabric protection so the Manger went to bat for him,you can bet the Dealer didn’t pay though.
Same thing with dashes that develope bubbles in them (from the sun) they do get covered.
On SOME policies stains or bubbles MIGHT get covered, but all of the policies I have seen only MECHANICAL DEFECTS are covered, and those are rather covered poorly. If the policy excludes cosmetic issues, your service manager would be powerless to get the extended warranty to cover it. Perhaps those were taken care of by separate warranties of the fabric protection the customerpurchased, or the factory’s coverage in the case of a defective dash.
What is a “sick in the condensor”?
That is a stick,you may want to lay off the coffee,little uptight today?
if you had good luck with your Camry why are you not looking at another Camry or at least a Toyota?? These are very reliable vehicles.
Extended warranties are nothing more then a very very high priced insurance policy. Compared to other insurance policies it’s considered one of the highest if not THEE highest profit for insurance companies. Some companies have started their own divisions just to sell this type of insurance.
I WILL NEVER buy one.