This article on Csrtalk’s website reads like it was written by a shill for the extended warranty industry.
While all the old arguments against buying extended warranties still apply. one that this article did not address is the way these companies wiggle out of covering things.
The most recent and flagrant example from the forum was a Ford Motor extended Warranty that did not cover a destroyed engine caused by the tip of a spark plug the had been installed by the factory and was not due to be changed. The denial was that the spark plug was not a covered component.
The fact is, these warranties are expansive and generate large profits and most consumers would be better off dropping the warranty money at the horse track.
If you’re buying a new car, consider the manufacturer’s extended warranty, for example Toyota Care on a new Toyota vehicle. NEVER even consider any so-called “extended warranty” underwritten by anyone other than the manufacturer itself. Even then, it might be wiser to just save your money.
Otherwise, consider putting $100 a month into a bank account specifically designated for car repairs and eventual replacement. If/when repairs are needed, then DIY or pay a shop to do the work. If expensive repairs are recommended, get a second opinion. If the car becomes too unreliable and/or costly to keep running, you should have money available to pay towards a replacement (or at least a down payment towards a replacement).
See #1 and 2 above.
See #1 and 2 above.
Wait a minute. You’re not seriously still considering wasting a bunch of money on a scam “extended warranty” that isn’t going to cover anything when the time comes?
Even manufacturer extended warranties aren’t worth it. They are way too expensive. You are buying an insurance policy for the time period that the vehicle is it’s most reliable. That makes no sense at all.
It is an insurance policy, When I get a new car, I usually get the extended warranty. for $1400 I got 7 years bumper to bumper, as mileage will not come into play. An extra 4 years not worrying about what ifs. Like any insurance policy it is most likely a money loosing proposition, but when I was younger a major repair while paying off a car loan was a big concern.
The extended warranty worked for us the one time we had it. The transmission in our 2003 Olds Silhouette failed at 58,000 miles and well within the time limit. It was a 60/60 ( months/thousand miles) warranty. We got a new transmission installed at no cost. Of course, we’ve had 11 cars since the early 1980s and only needed the extended warranty once. Good thing that GM was giving them away as an inducement to buy Oldsmobiles after the demise of the brand was announced.
Usually, major components will fail within the manufacturer warranty period. The only time I purchased an extended warranty was when I bought my POS Ford Tempo. I did the right thing!
That’s the key. Assuming it’s a legit warranty (factory backed), you would have spent many extra thousands of dollars had you gotten a warranty on every car. You picked the right one!
I think we have gotten to the point in society that we want to be protected against any repair expense. I receive calls about extending the warranty on my car. At least once a month, I receive information about insuring the electric cable from the meter base to the circuit breaker panel, or insuring the water line from the water meter to the house. There are commercials on television urging me to insure our household HVAC system and our household appliances. I really don’t think.any company is going to insure and replace a 25 year old refrigerator, a 27 year old washing machine or a 20 year dryer with a new appliance or repair the one I presently have.
Of course, all these warranties come at a price. I grew up where we took care of our own repairs–we fixed what we could ourselves or hired a repairman if it was beyond our expertise. I can manage my own situation. I don’t need to pay extended warranty companies to take care of me.
Extended warranties are also a huge profit machine.
There are a variety of reasons for it… but my own personal theory is that too many people today are “Credit Rich, but Cash Poor.” Meaning, there are a lot of folks who can make a monthly payment with no trouble. But if the engine blows up or the transmission falls out, they have no cash to pay for repairs. And even if it might be far cheaper to repair the current vehicle than to trade it in or buy a new one, many people go the most expensive (long term) route of just getting a new car. And the cycle repeats.
But the key is our society encourages people to buy new all the time. People like me who literally wear things out before buying new (or the wife tells me to) are getting more and more rare.
@ledhed75. What you said is probably an accurate description of today’s society. Consumer Reports several years ago had an article titled “Repair or Replace”. Three years ago, I spent $275 having a 24 year old washing machine repaired. CR would have argued that it should have been replaced after 8 years instead of a major repair. Well, I have gotten three more years. It’s hard to find an appliance repair technician these days. I have a Toro push mower I bought in 1988. It has a cast aluminium deck so it won’t rust. I had to have the carburetor rebuilt but to me it made more sense to repair rather than replace. I think CR would have advised replacing after five years.
I know that some things aren’t feasible to repair. My former dentist sold his practice and a new dentist bought the practice. I saw him for the first time last week. I asked him if he knew how to fix geezer’s teeth. When he looked at me with a strange expression on his face, I said “I couldn’t get my car fixed because nobody seems to be able to repair a carburetor. No TV tech will work on my vacuum tube television. I want to keep going for many more years, so I hope you can fix my teeth instead of saying I am old technology and should be replaced”.
You have me with the tube type TV, but I did have a Kenmore dryer for more than 40 years. I newer called a repairman, always fixed it my self. Had toe replace the door springs 3 times. the door switch 3 times, the foor seal once the drum rollers twice, the flame reader once the drive belt 3 times and the motor once. The most expensive was the motor at $75. Most of the repairs were under $10.
Yesterday, I replaced the cabin and air filter, It had been 30.000 miles. The air filter looked almost new, the cabin filter was dirty. I remove the cabin filter at 15,000 miles and tap it out per the schedule in my owners manual. Some sources have the two filters cheaper if you buy a combo pack. It took me 15 minutes and I was working slow. My cost was under $20 and on another post a CRV owner complained that the dealer wanted over $200 to change the pair. There were 3 owners on the post who were complaining about smelly seats and non had ever changed the cabin filter, with two of them admitting they has neglected FIVE filter changes.
@MikeInNH Consumer had an article some years back titled “Bait the Hook With Merchandise”. According to the article, selling the loan was as important as selling the goods.
One problem I have with saving money so I can pay cash for a car is that once I have saved the money, I hate to spend it, especially for a car that will depreciate. Banks encourage people to borrow. When I took out a mortgage to build a house back in 1972, the savings and loan institution wanted me to include the kitchen appliances on the 20 year mortgage. I declined. I told the loan officer that if the refrigerator died after 10 years, I would be paying for a ‘dead horse’ for the next ten years of the mortgage.
Just buy a reliable vehicle. Consumer Reports lists vehicle problems. Buy a one or two year old reliable vehicle from somebody like Carmax and save one half to one third of the new price plus lower taxes and insurance. Also by that time the vehicle should be through with recalls and misc early failures.
As far as extended warranties go, I recall a cracked exhaust manifold replacement that was declined because it was part of the exhaust system which was not covered.
Ah yes, not part of the block, heads or internal parts. I pay for everything I can with credit cards. It doesn’t matter how big the bill id, I pay it and pay no interest, reap the rewards points, and have more consumer protection than if I paid with cash, check or debit card. Every time I open a bank account , the bank employee who talks to me tries to explain the advantages of a debit card. I must be pretty dumb because I never “get” it. The reason I open so many bank accounts is because they keep paying me to do it.
