Extended car warranty

I’ve read a lot of previous comments here on the extended car warranty and it sounds to me like the consensus opinion is: don’t buy it. I got two quotes for my 2009 Altima, one from my Nissan dealer and one from WarrantyDirect. I usually keep my cars for over 10 years/100K miles, so in theory it makes sense. I am looking for a reason to buy, actually. Just want to make sure that the company offering this is reliable. Any suggestions would be appreciated.

Just a savings account gamble.
Just an insurance policy gamble.
Not a warranty at all if you have to pay MORE in addition to the item purchase price ( TVs , phones , cars, refrigerators, etal )

Put the same money into a personal savings account and it remains yours if unused.

I proved this to myself when both purchasing the trying to insure $10k worth if musical gear ( amps, guitars, PAs, lights etc, everything for a country/rock band ) cumulatively , not all at once, over the years.
I did NOT purchase the extended warranties.
I did not get an insurance policy only for the gear.
30 years later, all that money IS STILL MINE :slight_smile:

( I have a 1979 Kramer dmz4001 4string bass guitar for sale if your interested in buying some proof )

usually keep my cars for over 10 years/100K miles, so in theory it makes sense.

Not it doesn’t. I keep my vehicles for 8-9 years and 300k+ miles. Never ever bought one and never will.

All extended warranties are…are very very very expensive insurance policies with very high profit margins for the companies selling them. Less then 5% ever cash in on these extended warranty claims. That means you’ll have a 95% chance of just wasting your money. That’s a lot of money to waste.

One never knows how these things will turn out. You may indeed be one of the few people who manage to collect more than the cost of the premiums. The insurers are gambling you will not.

Since the few lucky winners will not collect much more than their original premium costs, why even bother?

My opinion is that extended warranties rate right up there with playing the lottery; it’s for the mathmatically challenged.

However, if you feel that you absolutely, positively would benefit from an extended warranty you should only purchase one that is backed by the people who manufactured your car; in this case, Nissan. Some of these companies are here one minute, gone the next.
(Do a net search about U.S. Fidelis and look at how that one turned out.)

You should also carefully read the fine print about your duties as a car owner in regards to maintenance, deductibles, and what really is and is not covered by the policy.

It is an insurance policy. For me buying the extended warranty for $750 and knowing I will have no major repairs while I am paying it off was reasonable. As far as a used car goes, I would probably take my chances, what is the deal they are offering? It is hard to judge unless you look at the cost and coverage.

Insurance companies (you are talking about insurance not warranty) don’t set their rates lower than they expect to pay you for any claims plus a good profit. Look around at those nice big fancy buildings that are the headquarters for those insurance companies. Who do you think is paying for them?

I’ve always looked at it this way; If someone thinks the car they are considering buying actually needs an insurance policy, they shouldn’t be considering buying it.

If you decide to buy an insurance policy anyway, make sure you understand exactly what is covered. Judging by the amount of email spam and phone messages I’ve gotten for extending my car’s warranty - when they obviously have no idea what kind of car I own - I would guess that selling extended warranties is a highly profitable business.

This URL was originally posted in another thread by gsragtop:


Go to figure 7. It shows that Honda, Ford, and GM pay less than $500 per car in warranty repairs. Yet, they want a whole lot more from you for this extended warranty. Extended warranty costs will be higher because they bridge the gap between your Altima’s basic warranty and the 10/100 endpoint, but even if it doubles, it’s likely to be a grand or so in repairs over 100,000 miles. Add to that the issue of wear and tear. The issuer has to be convinced that you did not damage the car yourself, and that it was an inherent defect that caused the failure. That gets more difficult as time goes on. If it reduces your angst. then buy it. But you don’t seem like a worrier. I’d keep the money for something else.

Thank you all for your feedback - I really appreciate it.

An extended warranty is really overpriced insurance. I want coverage for disaster, but take care of the smaller expenses myself. I have high deductible on my auto collision insurance and my homeowners insurance. Part of the money I save by the higher deductible policies goes into a repair account. What I have saved over the years by paying for my own repairs as opposed to full coverage has benn considerable. Usually, a manufacturing defect in an automobile will show up during the warranty period. I would recommend you put the money you would spend on an extended warranty into an emergency account. I believe that by insuring yourself, you will be money ahead.

Folks I have known who have bought extended warranties have not been happy with the results when they had a claim. The companies tried to weasel out of paying by saying it was a condition caused by something they didn’t cover. One blown head gasket was SUPPOSEDLY caused by a bad radiator cooling fan. I doubt it because the gasket blew as the car was being driven down a 60MPH highway in 20 degree weather. It didn’t NEED a cooling fan. They offered to pay for the fan. The client offered to see them in court, but since the insurance company had a cadre of lawyers the client was not able to find an attorney to fight the case over $1100. I’m sure the warranty company was well aware of that.

I’ve been in the middle of a few warranty/customer disagreements and in every case it seemed a rep was trying to weasel out of coverage for the most nitpicking, and often wrong, reasons.

As a matter of fact, I think that a guy who ran a warranty company may have been responsible for my becoming unemployed once. I worked for an import dealer whose owner spent time at his GM franchise. He was reputable and had been around a long time. At one point he backed a guy on a Chevrolet franchise and apparently over about 2 year time frame the guy he backed was looting the bank so to speak. Eventually the place was just locked up one morning when the employees showed up for work, leaving a number of people hanging on the hook financially including the guy I worked for.

The guy who bailed out (reportedly with a quarter million dollars) surfaced a year or so later in another state and was running an extended warranty company selling policies that were crammed full of loopholes and which no one on Earth was ever going to collect on.
The financial fallout from the ex-Chevy dealer/extended warranty guy really put the hurt on the import place where I worked and my boss’s GM dealership. A few years later the import store closed down; followed just a few years after that by the remaining and long-established GM franchise.
Both buildings have since been bulldozed down with one being replaced by a small strip mall and the other with a high rise hotel.

The previous owner of my car spent $8000 in 4 years at a moderate priced independent mechanic.
I think the NUMBERS make sense, but the main issue is what is not covered.
That should be the real discussion here. It all depends on the car type.

The previous owner of my car spent $8000 in 4 years at a moderate priced independent mechanic.

AS OK4450 noted, many warranties would not have paid a cent toward that $8000 in repairs. Their fine print is worded very carefully to avoid having to pay anything.

If you decide to buy one only get one backed by car brand itself not some third party. Dealers sell third party too so read carefully.

I often get mailings from companies wanting to sell me extended warranties on my cars and they always end up in the trash can. Most repairs I do myself and I can usually do the repair cheaper than the deductible would have been on the extended warranty if they even covered the problem. One of my cars is 24 years old, has over 518,700 miles and doing the work myself I’m able to keep it in good mechanical condition for less than the cost of an extended warranty on a newer car. Since I do my own work I buy parts that have lifetime warranty and when they wear out I just take them off, return them to the store and get a new one so all I’m out is the time I spend working on it. In the average year I probably spend less than $200. on preventive maintenance and repairs on the car with 518,700 miles. The only thing I can think of that I’ve done to it in the past couple years that wasn’t covered by a lifetime warranty was replace the timing belt and an extended warranty wouldn’t have covered the cost of replacing the timing belt since it’s a regular service item.

On the other hand my dad bought a used Buick in the early '80’s. The car seemed to be in very good condition, but he negotiated a price including an extended warranty. He drove the car for a few thousand miles and found that it was using way more oil than it should have and took it back to the dealer he bought it from and they pulled the engine and put a new short block in it. I think he had a $100. deductible to pay. There’s never any guarantee what kind of car you’ll get when buying a used car, but I think part the money would be better spent on taking the car to a trusted mechanic and paying him an hour or two labor to give it a going over of problem areas instead of buying the extended warranty. If the mechanic finds problems either make them repair it before the purchase or find another car.

I was at my mom’s house this afternoon and she had received a mailing from Maytag wanting to sell her an extended warranty on her refrigerator. The cost of the extended warranty for 5 years was $300. We figured even if the refrigerator wore out in the next 5 years it could probably be replaced for $700.-$800 and she’d have a new refrigerator with a manufacturer warranty instead of one that’s several years old that might continue to give her problems.

In my 36 years of driving and owning vehicles I’ve found that in most cases with my cars or any car if it’s maintained properly they need very little work in the first 100K miles.

My auto club just introduced such a program and it costs $1800 and runs for 4 years and from 50,000 miles (expiry of most factory warranties) to 100, 000 miles. During those miles, the starter and alternator would be the only things likely to wear out, if at all. There is a clear list of the things it covers and does not cover, but I don’t drive enough miles to warrant it. A salesman with an unreliable car could possibly collect on it. At least it is honest and transparent.

But I can`t imagine $1800 of failures during those miles.

Plus, this thread is a year old. Resurrecting old threads for spam is just pitiful.

There is no free lunch.

No one can some how come up with an insurance policy that is going to cost you less, on average than just paying for what ever it would otherwise. If you self cover (don’t buy the insurance/warranty (some like to call it a warranty, but nearly always they are selling you an insurance policy and you will in the long run will pay more, than just pay what breaks.

You should buy insurance for what you could not afford if it went bad. Over time, it is going to be more expensive to buy those policies.

Just ask yourself this. Who is paying the cost of the repair etc? Don’t expect any insurance company to pay out more than they charge the customer. They can’t afford it.

Why they do provide is a kind of safety net that will save you from the really big bills, but in the long run they must charge their customers (you) more than the average cost.

Good Luck