Extended warantee worth the dough?

should I get the extended warantee on my new Honda Fit?

reg warantee is 3 yrs./36,000 miles.

extended is 8yrs/120,000 miles. but costs $1,600 or so. I don’t want to throw away $ (don’t have a lot). what are the chances I’ll need $1,600 worth of repairs? and if I do, will the repairs I need be covered? I know it’s a crap shoot, but would like your advice before deciding…p.s. so far the car feels good! but, then again, my old car was an’86…

thanks.





Like a crap shoot, the house always wins on average, and often wins big. Your call, but you might consider waiting, I believe you can sign up later. Also, the cost can be very negotiable. $1600 seems high (especially for what should be one of the most reliable cars on the road!), but then again, I’ve never bought one, I keep my cars 10 years or more, and have never regretted my choice.

The Fit is one of the best cars made, so I would call it a waste of money. The things covered are not likely to fail within the 120,000 mile period. The people who often do win are bad, sloppy drivers who do the absolute minimum in maintenance and are accident prone. You don’t sound like you fit in that category.

If you are buying one of the most reliable brands around, why spend the money on an extended warranty? In my opinion, it is a waste of money.

I think it is funny that the salesman will tell you how reliable the car is and then he will sit you in front of a guy who will try to sell you an extended warranty. I have fun in this situation. I say something like “If this car needs an extended warranty, perhaps I am buying the wrong car.” Make the guy think he just talked you out of the deal and he will back off real quick.

Also, since you are buying a Honda, I would not spend money on gap insurance. It is a waste of money. Gap insurance covers the difference between the car’s value and the amount you owe. Hondas hold their value so well that even if you put no money down, you will probably never owe more than the car is worth.

Think about gap insurance this way. What happens if the car is totalled? What if someone steals and wrecks the car? If the car is worth $10,000 and you owe $9,000, or if the amounts are equal, gap insurance is totally worthless. If it is the other way around, and you owe $10,000, but the car is worth $9,000, you will owe the finance company $1,000. Considering the unlikely event that this could happen, how much money is it worth paying? Considering the history of the rate of depreciation of Hondas, I think it is safe to say it isn’t worth the cost.

The warranty is only for 120k miles. Very very few cars need $1600 in repairs for the first 120k miles. Extended warranties are nothing more then a very very expensive insurance policy. Insurance companies make HUGH profits on these types of insurance policies.

Maybe if you were buying car with poor reliability and high repair costs, like a VW or Benz, then it would make sense. But Honda’s are about as a reliable a car as you can get. Save your money

Maybe if you were buying car with poor reliability and high repair costs, like a VW or Benz, then it would make sense.

If you knew the car was poor reliability and high repair costs…then why would you buy it??

Maybe if you were buying car with poor reliability and high repair costs, then it would make sense.

The trouble with that is the insurance company knows what cars have high repair cost and they add that cost to the policy before you get it.

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 peop;le 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

For some people having a status symbol trumps everything else, Otherwise nobody would buy Lambos, Ferraris, or Bentleys.

Would you gamble with a car dealer who gets to set all the rules and knows all the odds?

Casino’s are a $30billion/yr business. So the answer to that question is that a LOT OF PEOPLE DO.

Extended warranties are always overpriced considering what they really cover. Statistically, the Honda Fit is a very reliable, low maintenance car. However, you may be unlucky. One way to hedge your bet is to put the $1,600 into a money market account, instead of the dealer’s pocket. During Honda’s warranty, you will be earning interest on your money. If you need expensive repairs after the warranty expires, pay for them out of this account. The most likely outcome is that, ten years from now, you will still have the money as well as the accrued interest.

Take that $1600 to a bank and open a money market account and let it accrue interest FOR YOU. If, at any time your car needs repaired(brakes and timing belt do NOT count as repairs, they’re maintenance items), take money out of the account to fix it up. Do NOT touch that money for anything else besides car REPAIR. Depending on how long you’re gonna own the car(average car buyer seems to only buy and trade in while they’re still paying off their 5/6 year loan), the warranty probably won’t be worth it. In fact, if you own your Fit for a long time, and don’t take much money out to fix it, you will have a nice chunk of change to buy that next car with.

If the warranty was worth the dough to you, that would mean the company offering the warranty would lose money on average. Do you think they’ve set the price so they lose money?

wow, thanks everyone for such excellent advice. I’m NOT buying the extended warantee (or gap insurance). I think the suggestion to put the $1600 in a money market is an excellent one. I’ll do it and then see how I end up.
thanks again all. I now feel good about the decision (instead of all wishy washy like I was feeling before…)

Dont buy the warranty from the people who are selling you the car.Reasearch extended warranty (go to sites other than this forum).Get everything in writing,ask alot of questions,rentals,wear vrs part failure,diagnostic time.Be sure of what you are buying.

Extended warrantees are not gap insurance. Gap insurance covers any deficiency in the value of the car in an insurance pay off and the loan balance. A warrantee will cover repairs over an extended period.

Like anything they have to make money on it but there are always individual winners and losers. Most people will lose money on it but once in a while a $7000 repair bill is avoided. You pays your money and takes your chance. I would be uncomfortable with a non factory based warranty due to the financial health of some of these folks. While the theory is that they make money, one very large one went belly up not too long ago leaving dealers and policy holders with the loss.

“Portable warranty” as opposed to “All your eggs in one basket” theory:

I agree with Mr. bscar’s advice. I apply this logic to owning multiple cars in a family (lots of families have 2-3 cars or more) or multiple home appliances (most people have a range, refrigerator, dish washer, dryer, washing machine). When you put your money in a warranty on one vehicle or one appliance then what happens if one of the other ones breaks? You need more warranties or… by saving the money they can each be covered only if they need coverage.

You single people out there, yah, even the ones that are never getting married… You never know when all of a sudden… WHAM!, you have multiple cars, multiple appliances, bills, kids, kittens, and on and on…

And Land Rovers, and Jaguars.

I agree with Mr. bscar’s advice. I apply this logic to owning multiple cars in a family (lots of families have 2-3 cars or more) or multiple home appliances (most people have a range, refrigerator, dish washer, dryer, washing machine). When you put your money in a warranty on one vehicle or one appliance then what happens if one of the other ones breaks? You need more warranties or… by saving the money they can each be covered only if they need coverage.

My wifes a IT manager for a LARGE company in NH. They just recently bought everyone new PC’s…little over 1200. The maintenance agreement for each PC was $100/yr…that would be a total cost of $120,000 for maintenance. There is no way they’re going to have $120k worth of repairs annually. Far Far cheaper to just fix and replace as needed.