I purchased a used '06 Element in October from a Honda Dealer. Along with the car, I purchased a Honda Care 8 year, 100k warranty for $995. Honda rejected the warranty application because the car is not eligible for that warranty. The car is two months too old. The dealer has offered to replace the warranty with a 2 year/24k one, for the same cost. The first warranty start date is from the in-service date of the car, the second one would be from my purchase date. The alternative warranty ends up being about 1/3 shorter than the one I originally purchased. I proposed prorating the cost by that amount, so that the warranty cost is $650ish. The dealership rejected this, stating that the second warranty is much more expensive, and they’re already losing $500 bucks as a result. We’re currently at a stale mate. Any advice? Thanks! I’ll update as more events transpire.
This one is dicey. You purchased the Honda Care warranty separately? Meaning the car had a price and the warranty is an additional line item on the invoice? I think the dealer must refund your $995. Then the question is about the value of the car you bought, without the warranty do you feel the car is worth less? You might be able to sue for diminished value since the car was not able to qualify for the warranty.
Did anyone at the time of the sale say that the warranty was not certain and that Honda might or might not accept it? If yes, you are not going to get anywhere. If no mention of any issues with Honda accepting the car for warranty then you might have an argument. This might take a lawyer to sort out.
I’d just get my money back (all of it) and forget the warranty, they’re not worth it to me.
Get the $995 back from the dealer…and NEVER buy an extended warranty. They are a waste of money.
The warranty is definitely a separate line item, and I did discuss with the dealer that a car that can’t carry that warranty has less value to me. I didn’t really get anywhere with that argument. The dealer has since offered to also throw in 3 years of oil changes (meh). Buying the 24month warranty (of which 3 months have passed) for $1000 just seems too high. The likelihood of recouping that seems almost zero. I suppose I can also do nothing (let this issue remain in limbo). If something catastrophic happens, buy the alternative warranty. If nothing happens, demand a refund of the initial warranty cost.
Even today, $995 will pay for a lot of maintenance that isn’t covered under the warranty, but will help avert expensive repairs. I would bet that for $995 you can get the timing belt replaced along with the water pump and tensioners and have the fluid and filter changed in the automatic transmission.
In my books, the $995 is best spent on proper maintenance. I would just request the return of tye $995.
I can’t understand why anyone would say extended warranties are a waste of money. When in the dealership world I saw those no good extended warranties save peoples behinds every day. I would probably research the car first to see if they’re any known problems. Any automatic trans out there is going to cost you more than $ 995 to rebuild or
In fact, almost anything you do repair can easily hit $ 600 to $ 700
Warranties other than the OEM Manufacturer warranty, are just a way for the seller (Dealer, maybe the manufacturer, etc. are sold for only one reason, To get more money from you than it will cost them. It is a big time profit item. Generally less than half of the cost of the warranty goes to pay for covered cost. Everyone gets their share of what you pay for it.
The dealer, the salesperson, the insurance company (Yea, it is a product sold by the insurance company holding the paper) and anyone else that can get a piece of your pie.
Get as much of your money back. If you can just cancel the whole insurance deal.
Either take the shorter warranty or get your money back. These are usually a waste of money. If you really really like the idea of a trouble free warranty, you might want to compare the cost of new versus used, once you throw in the cost of the extended warranty.
I like the idea of a bumper to bumper warranty from Honda for $300 bucks a year, which is what I initially purchased. I’m not so on board w/ $500 year. Maybe I’ll push for a refund, plus the three years of oil changes, which they said they’d give me if I bought the other warranty. At the end of the day, this is a Honda w/ 60k miles on it, and I only drive 8k a year. The odds of super-expensive repairs seems pretty low. BTW, regarding the timing belt comment a few posts up, this car has a timing chain, which is nice!
They definnitely owe you a full refund. You paid for the warranty, they failed to deliver.
I have the utmost respect for Transman, but I have to disagree with him on the issue of extended warrantys. If any part of the car is going to fail prematurely, it’s highly likely to happen during the initial manufacturer’s warranty period. Once it passes that, and during the period of most extended warrantys that I’m familiar with, the probability of one of the covered parts or systems failing is extremely low. And if you then factor in the probability that the cost of the repair will exceed the cost of the warranty, it’s even lower.
IMHO you’re much better to just keep the money yourself. That way, you only lose it if the car actually breaks. If you give it to the warranty company you lose it whether the car breaks or not.
Having said that, I respect that having an extended warranty gives some folks an added sense of security and for them it may be worth the money. But from a purely economic standpoint, it’s a bad bet.
Transman is right, in that factory backed warranties save some people money. What he didn’t see were all the folks who bought warranties that didn’t need repairs. So there are two issues:
On average, the warranty must cost more than you get in repairs, or else they wouldn’t sell it. Some might find that ‘peace of mind’ worth the cost.
Third party warranties can be worse than useless, with endless cycles of arguing over denied claims and fine print. Are there good ones out there? I guess, but there are many, many bad ones.
This particular car is used, w/ 60k miles on it, and I don’t really know the history of it. For $300 bucks a year, the HondaCare warranty seemed like a reasonable investment. Any more than that, and I would have passed on it. I guess that answers my question… I should just get a refund. I can’t help feeling like I’m “owed” something for their (arguably unintentional) bait-and-switch, though.
Extended warranties are a waste in that the VAST majority of people who own cars never need a repair that is covered by this warranty. So it’s GREAT for the person who has a problem and needs repair…but a complete waste for the other 90% of the people who buy them and never need them.
I would try to get a refund and put the money in the bank.
“Warranties other than the OEM Manufacturer warranty, are just a way for the seller (Dealer, maybe the manufacturer, etc. are sold for only one reason, To get more money from you than it will cost them.”
Almost right. The purpose is to get more money from the pool of buyers than it will cost them, not from you individually. An individual buyer can hit big with an expensive repair covered under warranty, but most do not. It’s essentially a lottery. Mike got it right.
The last thing I would do is put the money in the bank. Spend it on good food, a TV, or keep it on hand as cash for emergencies, gas, or repairs. Whatever your priorities happen to be. Is the tiny interest you get worth the effort of putting it into and then taking it out of the bank?
Get your money back. It is very unlikely that you will need any repairs that it would cover anyway. You are playing off the risk that you will need repairs worth more than $1000 against the loss if that money for other purposes. It is possible you might need an expensive repair, just unlikely.
When you look at the service life expectations and reliability of a Honda with less than 100k miles and less than 8 years old, you cannot justify the cost of the warrantee.
Cars typically have a few problems when new due to manufacturing defects. After the first two years, the repair history drops to near zero until the vehicle approaches the end of its expected service life. The problems usually start somewhere in the last thirty percent of its expected service life and ramps up from there to the end of its economic service life.
That’s why they call it insurance. How many of you have homeowners insurance and have had to make a major claim? It’s all risk based costing. If the majority of people made claims it would be more costly to purchase. Anyway, a manufacturer backed warranty will cover more things and likely be less hassle in the event of a loss. It’s funny the people who have one and need it think it was a great idea. I never buy them. Guy at work used his 2x and it paid for itself big time. Do you feel lucky punk?
I’d say that I generally agree with those against the purchase of an extended warranty, particularly in this case. You can sometimes justify it on a new vehicle when the equipment on it doesn’t have a history of reliability to go on. For example, take some of Honda’s variety of transmission and engine issues from the late 90s into the mid 00s - The 06 Civic, for example. Based on prior experience, no one would have expected them to have problems with engine blocks cracking, and the warranty was likely fairly cheap. Therefore, that may have been a case where the owners, on average, actually got paid more than all the policies cost, and purchasing one would have been worthwhile (yes, I know Honda actually covered the cost of some of the necessary engine replacements, but I’m using this as an example).
However, for a used vehicle - particularly an older one where there is a solid track record to pull on for reliability, you can be pretty much guaranteed that the average owner will lose money by buying the warranty.
And keep in mind, many of these companies completely prey on your fears. I’ve seen quotes for the exact same extended warranty on a Pontiac Vibe come in at THOUSANDS more than on a Toyota Matrix, where they cost barely over $1000. That extra price is based on nothing but fear.