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Extended Warranty - is it worth it?

Hi I just got a 2014 Subaru Forester; and in the past I have never gotten the extended warranty with a highly rated vehicle, but there’s so much technology and electronics in this thing that I’m wondering if it would be worth it. An additional four years (on top of the 36-month) would cost about $1700 through the Costco Auto Program.
I have the Touring 2.5i model, which is about the highest you can go without a turbo engine. EyeSight technology, rear backup camera - that makes three cameras on board - heated seats, push-button ignition, keyless entry, push-button back gate, automatic moonroof, etc

Extended warranties are usually worthless. If you read the fine print…they won’t cover the majority of repairs that vehicles need as they age. Put the money in the bank and leave it there until you need it to repair the Forester.

I agree with @missileman - have you read the detailed description of what your factory warranties (there are several) cover, and what the extended warranty will cover that the factory warranties don’t?

I’ve NEVER bought an extended warranty on ANYTHING…and never will. They are just very expensive insurance policies. Nothing more.

I have to agree with the other 3 posters. I’ve banked all the money that extended warranties would have cost me on appliances and electronics over the last 10 years or so, amounting to $1150. The actual repairs that would have been covered by those warranties came to $120, I believe. So the “payout” as measured by the insurers came to about 10%. I was offered the same $1500 4 year extended warranty on our Corolla in 2007. So far nothing has broken that would have been covered by the additonal warranty!

They are extremely worth it for the dealer selling you the warranty, since they make about 50% profit on selling the warranty to you.

The odds are stacked against you that you’ll recover the money you pay into such warranties.

I agree with everyone, Bank the money, you will come out ahead. There is a extremely rare chance that you could come out ahead, but there’s probably a .05 percent chance of that, and even then expect junkyard parts because they usually will use junkyard parts such as transmissions, engines ect…

Keep in mind many extended warranty companies have so many exclusions it will make your head spin.

Extended warranties only benefit the person selling them at a huge markup.

Costco site says check back in Feb, 2014 for details of extended warranty. I have bought dealer warranties, last one was $1100 for 7 years 70000 miles. It was reassuring to know I would have no repairs while paying off the loan, and no repairs for 2 years, as we keep the cars at least for 10 years and put on about 10k miles per year. We did have a couple of things covered, don’t remember exactly, probably not amounting to what we paid, but that is the same for all other insurance premiums I have. Read the coverage, none will do regular wear items, brakes, tires filters etc.

I just bought a new Legacy, they offered the 7 year, 70k extended warrantee for less than $700, a 7 year 100k for a little over $1k, I declined on both because todays cars are very reliable through this period. BTW, this is an extension of the factory warrantee honored by Subaru, not some third party party “insurance”.

Note that Subaru comes with a 5 year, 60k power train warrantee along with the 3/36 basic car warrantee.

They offered another road hazard warrantee for the tires for $250. I asked them that if one tire had to be replaced when half worn, would they replace the other three as well so the AWD wouldn’t be damaged or would they shave the new tire to match. I got the deer in the headlights look, no answer.

My Legacy is not the top of the line like your Forester, it’s the one in the middle. My daughter just bought a new Camry and the dealer offered her factory extended warrantees, 8 years 80k miles, $3500 for the car, $500 for the keys, another one for the tires and several more. She declined.

I was financially at the point we were so thin, a major repair would cause great inconvenience, but the extended warranty was affordable. Wifey was out of work due to spinal fusion, there are no guarantees, but I slept well at night, knowing our potential expenses were limited. It was a bumper to bumper, sure I could have skipped it and saved money, but the what if brothers hang on my shoulders, It is a gamble, I played the safety, others prefer otherwise, like the op I feel the risk reward is worth consideration given the potential costs of repairs. You also need to factor in miles, if you hit 70k after 4 years a no brainier to skip it.

Bottom Line is no, not worth it for the consumer. Great deal for the dealer. I got one for a Toyota that had a deal that if you did not use it you got your money back at the end of the warranty. Could not pass that one up, cost around $1,000. I had a water pump covered under warranty for about $350, so I do not get my money back. I would have been better off saving the money and only paying for the water pump out of pocket. I still have about 6 months and 7,000 miles left, but cars now days are very reliable so the likely hood of me making out are pretty slim.


When you buy an extended warranty, you are basically gambling that something very major will fail, like an engine, transmission, differential, etc.

If that doesn’t happen, you lose

Most repairs won’t equal the cost of the extended warranty

And if a lot of major repairs are needed during that first 100K, chances are the car wasn’t really all that reliable

If you’re set on getting an extended warranty, get it from Subaru, NOT Costco

Aftermarket warranties have too much fine print, too many limitations

I worked at a dealer, and a lot of the aftermarket warranty companies were also hard to deal with

My biggest problem with aftermarket extended warranties is the use of junkyard parts. They don’t come out and tell you this. Imagine if you had a factory warrantied car and the engine failed and the dealer put a junkyard motor in.

I feel if a part fails you should get new or manufactured parts if its under warranty.

You should pass on the plan due to a number of reasons.
You refer to an additional 4 years. Careful reading will probably tell you that the plan runs concurrent with the existing factory warranty; not consecutively.
Short of abuse or a maintenance screwup, the odds of your new Subaru having a major fault in 4 or 5 years is very, very slim anyway.

The main purpose of extended warranty plans is to separate you from more of your money and bump someone’s sales commission up…

I would tend to agree with everyone but its just insurance. If you read and agree to the fine print and its affordable and makes you sleep better, fine. Just remember that that a third party is less prefered than OEM, and you’ll probably never get your money out of it. Also most have a longer power train warranty. My Pontiac has a 100K power train. Also the electronics mentioned such as door locks and moon roof are not the expensive parts. The expense is diagnosis and computers. Check the dealer price though first if you insist.

I consider the best estimation that my car should be reliable in the long term is that companies still send me junk mail about purchasing an extended warranty for my 2006 vehicle.

Most warranties do not cover electronics. The warranty company is betting against you, and they understand the odds and rules of the game better than you do. I’d pass.

Interesting that a poster can track their elec purchases for a decade down to the dollar. Hard to argue with someone who has numbers to back up their arguments. They may have facts, but who is to say if their reasoning is valid? And a sample size of 1 is worth, what?

Most look at paying for extended warranties as a way hoping to “save money”.

Similarly, is it reasonable to think of playing the lottery as a way to “save money” just because we all know people who have won various amounts of money?

Who knows, you just might be one of the lucky ones who saves money with an extended warranty.

I’m going to go against the crowd here and say “it depends.” If it’s a manufacturer-backed extended warranty and you get them to throw in other things, it might be worth it. I’ve often found that you can get them to throw in a full Clearbra if you buy the warranty. So you get a $1500 Clear Bra for $1500, and a free warranty. Can’t lose there.

Also, if the extended warranty covers electronics and your car has a lot of them, it might be worth it. I advised my mother to get one (with the Clear Bra trick) on her new BMW. It ended up costing her $300 for a 4 year extension on the warranty which does cover all electronics, and since BMW’s are justifiably famous for being electrical nightmares, that makes sense.

@Cavell Yes, we always keep track of all purchases and anything with a warranty and an instruction manual is kept permanent record of. That 10 years of purchases is now 13 years and the repairs that would have been covered is still only little over $100.

Record keeping is easy; I can tell you exactly what we spent on maintenance and repairs over the 13 year life of our 1965 Dodge dart.

As far as the “sample of one”, I’m just relating our personal experiences. If you buy items that are not quality and have a large household of very rough users, your “extended warranty” might have a better payoff.

For example, when microwaves with touch pads first came out, the Sears salesman, in a rare moment of honesty, told me to either buy the extended warranty (He himself had had several claims with these unreliable components) or buy one with the manual rotary dial, which we ended up doing and got 21 years out of a Toshiba commercial model without any repairs. It finally developed an electrical short and could not be repaired.

Similarly an abusive driver buying an unreliable car and doing minimal maintenance may have a better than 10% return on his extended warranty.

Even though I’m careful with fire, I still have insurance on my house, since I cannot afford to replace it if it burns down. The high premiums in my area are due to high frequency of ice storms and fires. I know I’m paying partly for other’s carelessness with matches.