Extended Vehicle Warranty Plans

My insurance company is always sending me E-mails concerning extended vehicle protection. It doesn’t really go into detail about what it covers other than the claim is that “It saves the consumer money in costly vehicle repairs.” Now I know I can easily call a representative about what exactly these “extended” plans cover but I’m curious as to what people have to say about these. I already have GAP insurance on which is financial protection, say like if my insurance company totals my car out after a wreck, they’ll only give me what my car is worth and the GAP insurance covers any remaing balance I have left to pay on my car, but I’m curious as to what people who have invested in extended vehicle protection have to say about it…

Never bought one, I never will. Those from other than the carmakers can be worse than worthless, with denied claims. Those from the makers will return less than they cost, on average, otherwise they’d always lose money.

My GAP insurance is from the same company that financed my car. My Insurance company is Highly Reputable. It’s one of the best in the nation and I’ve never had an issue with them whatsoever. I was curious about it because when I had my 1999 Chevy Malibu for 8 years I spent close to 7K keeping that heap running. I don’t anticipate problems with my current car, a 2010 Nissan Versa that I bought brand-new. I make sure that car is serviced regularly. You’ve probably read in my posts how particular I am about its maintance but I don’t want to go through the same issues I had with my Malibu when my Nissan gets up there in years. I’m the type of person that will keep a car until its dead or I end up spending more keeping it running than I would on a down payment for a new car.

most auto insurance companies offer GAP insurance too. Price the difference between the finance company and your auto insurance.

I’m not talking about GAP insurance, I’m talking about the extended warranty. Different animal entirely.

It’s the same price. I looked into that when I bought my car. I may refinance my car soon through my insurance company because it has a lower interest rate but since I lost my job 7 months ago and haven’t gotten a new job since, my credit has gone down the toilet :frowning: Sad times but I’ll make it through.

Just another bill to pay, something you probably don’t need right now…Read the fine print…Insurance companies don’t make money by paying claims…

I don’t plan on signing up for anything right now. Right now whatever money I have goes to current bills.

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 lose 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?   

Your decision has to do with the value of the piece of mind it gives you. If that is worth the cost then buy it. Don't expect it to cover everything however, most are written to keep cost down and exempt what they know will cost them money. 

Good Luck

Most extended warranties are virtually worthless unless you encounter something extremely unusual that it happens to cover, like a manufacturing defect in an engine or transmission that somehow waits around to show up until after the factory warranty runs out. I know someone who bought a bumper-to-bumper extended warranty that supposedly covered everything under the sun. She filed a couple claims and was not happy. First one was a leaky sunroof, which also destroyed the headliner, carpet, and trip computer which was mounted in the overhead console. The warranty covered fixing the leak only, nothing that was damaged by the leak was covered. Second was a worn inner tie rod end I found for her that was causing unusual tire wear. She brought this to their attention and was told that the only way they would cover that is if the tie rod end broke completely. What about incidentals, since if it breaks completely, it will take other stuff with it, like the brake hose, fender, maybe the entire car and everyone in it? Not covered. Those things are sneaky, and most are worthless, so be careful.

The extended warranty is another insurance program offered by your auto insurer. Before you go further, understand that they have to make money on it. That means they will pay out less than half the money they collect from extended warranty buyers. You will also have to show that the damage is not due to neglect or just regular wear and tear. As a car ages, this is more difficult to do. We had the transmission replaced on one of our vehicles at 58,000 miles; just before the 60 month-60,000 mile extended warranty expired. We received the extended warranty at no cost as an incentive to buy the car when new. It happened to pay off. But I have never needed an extended warranty on any other car, and I’ve owned 11 cars. It’s your choice; this is just a little perspective to help you decide.

while i sympathise with you on losing your job, refinancing your car loan is a horrible idea; unless you somehow got a 25% interest rate and you could somehow get a 7% rate

Never buy an extended warranty on ANYTHING. Not worth it…never have been. They are a very very very expensive insurance policy. Extremely high profit for the insurance industry.

Got suckered into one of these once; never again! Run, do not walk away from it! Worse thing I ever bought.

Every insurance company wants to sell you more insurance,
that’s all it is.
A savings account gamble…the house always wins.

Will you EVER reap more from them than you paid in ?

( State Farm is even sending me propoganda on additional insurances for my 79. )

I never bought an extended warranty plan, but I do occasionally still get offers for extended warranty coverage on vehicles I haven’t owned in years. They must be desperate.

“They must be desperate.” No they are doing quite well. Selling those insurance policies (they are not really warranties) is a big profit source for whoever is selling them.

I got one of these (extended warranty) from Toyota this time around. My first time.
I talked them down to half price, plus with 6 years of roadside assistance with no deductible it seemed like not a total ripoff.

I bought a maintenance agreement from AAA (American Automobile Association) and it has saved me at least the purchase price on my 2006 GMC 2500 diesel pickup. Whatever can go wrong on the GMC has and every time some expensive part dies, thanks to the AAA policy I’m only out the $100 deductable. I’ve read and heard about a lot of ripoff policies, but this is one that works.

Financially speaking, it’s a bad deal. For every person who actually benefits from a policy there are many times more people who will not. The insurance provider is playing the odds and they’re not offering policies without having the scenario already figured out.

Do you think an insurance carrier or the car dealer who is offering the policy has one molecule of concern about your car’s longevity and any problems you may have with it? Nope, they’re offering the policies because the odds are stacked heavily in their favor. They push them because they’re profitable, nothing more.

It’s the same thing with warranty policies on appliances and electronics; waste of money.