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Extended warrantees - what should we really pay?

I just bought a 2009 Mazda 5, and love it. And by the way, it’s not a minivan. It’s just a car with the OPTION of third row seating. Indulge me in my denial of being in the minivan set :slight_smile:

Anyway, I lost my steam after negotiating everything from the addition of the fog light kit and rear-view mirror to removing the Cilajet coating from the deal. I didn’t have it in me to negotiate on the extended warrantee too. Why don’t they just cost what they cost?? But, that’s not my question.

My real question is how do you figure out what the right price is for a warrantee where you are not paying double, and the dealer gets just enough profit to feel ok about the deal?

By not buying an extended warranty at all. You will get a better bang for your buck by putting the money in the bank and keeping it for emergencies.

Forget the dealer. He’ll make sure he gets enough profit. Your job is to get the price as low as possible. Your obligation is to keep as much money as possible for your family. The salesman’s job is to take as much of it away as he can for his family.

Forget extended warrantees. They’re simply profit generators for the dealer. They’re insurance contracts designed to cover the cost of specific items BEYOND the normal manufacturer’s warranty, during a time period between that point where anything likely to have broken would have been covered anyway and anything that hasn;t yet broken is unlikely to break. They’re almost pure ripoff.

Take the money you would have paid for the extended warranty and put it in the bank. You’ll come out way ahead 99.997% of the time.

If you really want the extended warranty, all you can do is dicker. If the dealer won’t bargain with you, then forget about it. You might also find companies that sell extended warranties on line and compare prices. Maybe you could save that way. I’d put the money in the bank and save it, if I had to have the funds immediately available. But you won’t need the money for at least 3 years.

My real question is how do you figure out what the right price is for a warrantee

You just tell the dealer and everyone else, you don’t want the insurance (it is not a warrantee it is just an insurance policy) Whoever sells the policy gets a cut of what you pay then the insurance company makes a profit and pays it’s staff out of the money you can and then what is left is what it cost them to fix you car if needed.

 Read the message above a few times.   Everyone gets a cut of your money if you buy the insurance, if you don't buy it, you, on average, will save all that money paid to the dealer sales reps as well as the CEO and staff of the insurance company. 

  If you really like the feeling of having that insurance, then go ahead, but in the long run it cost owners more that way.

In the unlikely event you need the insurance, the deductible they are going to charge you usually covers the total wholesale cost of the repair. “Extended Warranties” are a total rip-off, a profit center for the dealer. Read the fine print then check the box where it says “I decline this offer”…Put your money in YOUR bank, not the dealers bank…

the two Mazdas I have owned has not required any work that would be covered under an extended warranty, and both have exceeded 100K miles each. I would expect your Mazda 5 to do as well, or better.

Don’t buy the warranty, very few people come out ahead.
Enjoy your minivan

An extended warranty is not worth the expense and the sales department succeeded in what they were doing: they wore you down through talk.

The more you talk with them the more you’re playing in their ballpark and the best option is to simply stand up and say no more. The less talk the better.

If you’re stuck with this policy with no back-out option, then I suggest you read the policy carefully so you will at least understand what is and is not covered, the deductibles that apply, etc.

Hopefully this is a factory backed policy or one through a reputable company. There are a number of fly-by-night warranty companies who won’t pay off on anything without a major, time-consuming battle or who go into business for a year or so, collect the premiums, and then go “belly up”. Followed by reincorporating the following week and repeating the process.


These were all really good points, and I’m coming up with a big fat - don’t buy the insurance, uh - I mean ext. warrantee. I did not purchase it when buying the car, so I’m glad I waited on something I did not know much about. I’m thinking that in three years I should get the gist of how well this car is going to hold up and can also make a call then. But for now, I’ll sleep well knowing that I did not get talked into the extended warrantee OR the Cilajet application. I just got the car that I loved, and the practical accessories that I wanted.

It’s great how some people will avoid a mistake and then find out that it was the right thing to do. That must be a natural talent. Some people will write to us after doing the worst possible thing and spend three days here trying to justify their wrong thinking. I wouldn’t hesitate to ask ItsNotAminivan for advice.

Read The Fine Print.

My experience with extended service contracts is that a factory (Mazda Corp. in this case) is usually just that - an extension of the warranty. I bought a Chrysler one once, but never used it. However it would have covered what the factory warranty did.

However, many after-market (not your car’s company) extended contracts are really just insurance policies, except they often exclude too many things. It’s not what they cover that’s so important (they list that), but usually the listed items don’t suffer from failures. It’s what they don’t cover (not listed in contract) that is the problem. Some carefully craft a contract that excludes many items much more likely to fail, like a gasket. The part is cheap, but the labor to replace it can cost hundreds and since they can show you it’s not on the list in your contract, it’s not covered.

Owners of multiple cars benefit even more from saving the money instead of buying the policy. These contracts are not portable. Buy a policy for car B and car A blows up. The policy ties up your money for one machine. Buying policies for cars A and B is too expensive. Cash is portable and can go toward either car (or boat, lawnmower, diswasher, etcetera.) The more vehicles you have, the less sense they make, in my opinion.

I’ve never heard of Cilajet before but after a quick net search it appears to be just another on of those unneeded paint protectant scams.

There must be about a 1000 of these hokey paint protectants on the market and they’re all the same. A very tin wax that may cost the dealer 15 bucks (wax and labor) to apply and will vanish the first time the car is washed.

That’s right in there with interior protection, rustproofing, etc.

You have shown good judgment. Keep being skeptical and stay informed, it pays.

from the way it’s worded, i think the OP meant the dealership would remove the cilajet coating. The 5 is built in Japan and needs to cross the Pacific ocean to get here.
I’ve read on a CX-7 forum that several owners report an odd burning smell coming from their brand new vehicle for a couple weeks. Most posters agree that it’s the protectant that’s burning off the vehicle.

To demonstrate the effectiveness of extended warranties, consider the following. I kept track of 11 items (appliances, electronics, etc) our family bought over the last 10 years. All had a one year factory warranty, and all offered an extended “warranty” for the next 4 years. The total cost of all these extended “warranties” would have come to $1150!! I did not buy any of them, and calculated the actual repairs we had on all these items from the end of year one to the end of year 5, the period that would have been covered. The total came to $110! So for “only” $1150 in warranty cost we would have recovered a whole $110, or about 10% of the price paid.

I hope this explains the economics of extended warranties! The major part of this goes to salesmen’s commissions (50% in consumer durables) and profit to the warranty company.

However, there is a place for those warranties. If you are forgetful, a sloppy driver, and buy an unreliable vehicle or a vehicle with new and unproven technology, you may well benefit from an extended warranty, since a breakdown is much more likely!

You do not seem to fit that category and your car is one of the most reliable on the market, I concur with others that it is a waste of money. Remember, the average payout of an extended warrany is about 10%. Put your money in the bank, and it will more than pay for you first out-of-warranty repair, and leave money for a nice holiday!