Just want to clarify: This extended warranty was offered by (or I guess sold through) the finance guy at the Honda dealership.
I just recently bought a new 2016 Honda Fit and the dealership talked me in to purchasing an 8 year 100000 mile warranty from Carefree Car Protection for $1250. The service company and administrator for this extended warranty is listed as Fidelity Warranty Services. Do you all know anything about this company and if these deals are usually worth it or a rip-off? I think I can still cancel it and recover most of my money. Any advice you all can offer is appreciated.
I believe the Honda Fit has 3 year 36000 mile bumper to bumper and 5 year 60000 mile drive train. That means the extended warranty does nothing for 3 years on the car and nothing for 5 years on drive train.
Some people like them for piece of mind but you really need to read what it covers and how much you have to pay each time you use it. I will not buy one because most serious problems usually show up early.
The manufacturerâs warranty covers that period when any problem is likely to show itself. The extended warranty covers that period of the vehicles life when problems are by far the least likely to occur.
Take the money you would have spent on an extended warranty, put it on the bank under a special account called âmy warrantyâ, and then if a problem should occur beyond the manufacturerâs warranties youâll be covered⊠and if not, youâll still have the money!!
Why give it away to someone now years before you know if youâll ever need it?
One more point: those warranties often have exclusions that exclude just about everything that could happen.
Iâm not familiar with your company, but Iâve also never known anyone who bought an extended warranty from other companies who were satisfied with how their companies paid for needed repairs. Iâll never buy one.
Most folks would say its a waste of money but if you must, it should be from the manufacturer, not a 3rd party. Also you have to read the fine print to see what is included, where you can have it fixed, any deductibles, etc. A few years ago one of the 3rd party outfits went out of business leaving everyone high and dry. They got neither service or their money back. So that is the risk as well as some aggressive denial procedures.
The thing is, car companies will never, ever, never-never ever offer to sell us something which will end up as a net loss for them. They base the coverage and what theyâll charge for their extended warranties on data banks of statistics which predict on average they will make a nice hunk of change on every one of them. Yet, like life insurance, depending on your personal financial status, and other factors, buying coverage may be the safest way to head into your future. I wonât touch them. But, I am nuts.
Indeed. Consumer Reports thinks they are a rip-off. A much better investment in the car and in building personal wealth would be to take the time and energy and a few bucks to do the regularly scheduled maintenance and upkeep. You can groom her to outlast any warranty coverage, for practically nothing, IMO, get more if you trade her in and you can take your main squeeze to Burbank on vacation with the savings.
âMost folks would say its a waste of money but if you must, it should be from the manufacturer, not a 3rd party.â
+1
God must have been looking out for me, because when I bought my Chevy Citation, I paid for a GM extended warranty, and it really paid off when GM had to foot the bill for two transmission replacements, as well as a host of other repairs over the 5 years that I owned that car.
If the extended warranty had been from anyone other than the manufacturer, there would have been so many weasel clauses that the underwriter would likely have been able to stick me for all of the repair costs.
So, while a Honda should not need the paltry coverage that an extended warranty offers, if someone wants the extra assurance of one of those warranties, it should be ONLY from Honda, not from Fidelity or any other aftermarket provider.
I avoid all extended warranties. And I would advise anyone that asks to never buy a 3rd party warranty, like the one you bought. For the extremely risk-averse, a factory-backed warranty might be ok. But NOT a 3rd party one, they are often worse than a waste of money because of the aggravation involved, to end up with nothing.
A general rule: NEVER buy anything being offered during closing for a car, it is guaranteed to be a major profit item for the dealer, which means it is a bad deal for the buyer.
@JBofEastTN
"âŠCarefree Car Protection for $1250."
These âextended warrantyâ plans are a profit enhancer for the seller.
Iâm sure Honda offers actual extended warranty agreements. Iâd check into that and compare coverage and cost. These plans, like insurance policies, buys peace of mind for certain restless buyers. Iâd only consider a genuine manufacturer policy.
If you enjoy peace of mind at a cost then this could work for you. Is this your only family vehicle? If not, Iâd consider banking the money instead.
For every person who actually collected more money on these warranties then they paid intâŠthere are hundreds or thousands who lost money. Itâs nothing more then a very expensive insurance policy.
Seems very odd to me a dealership would be pushing a third party âwarranteeâ. Wouldnât one expect a Honda dealer to be pushing an official âHondaâ warrantee?
Seems very odd to me a dealership would be pushing a third party "warrantee". Wouldn't one expect a Honda dealer to be pushing an official "Honda" warrantee?
Thereâs more profit in the third party warranties for them. The dealer makes more then 50% of the money spent on these warranties.
It is an insurance policy. I always felt better having the policy rather than having a repair out of pocket while paying off the car. many people say, your chance of recovering the investment is not worth the cost, now how is that different from homeowners, blanket policy, car or any other insurance. How many people come out ahead? do the people who say it is wrthless have no insurance for anything? I doubt it. With all the new technology and problems I am leasing a car forever! 3 years and go, tires brakes repairs no worries,
I think the 1250 is a worthy price to sleep at night knowing a massive bill is not coming your way.
I always felt better having the policy rather than having a repair out of pocket while paying off the car. many people say, your chance of recovering the investment is not worth the cost, now how is that different from homeowners, blanket policy, car or any other insurance
Because the cost to whatâs insured is way way out of proportion. It is such a high profit margin for insurance companiesâŠtheyâve stared their own divisions. A more in-line cost of these policies is much closer to $200, Even at $200 for a 100,000 mile warrantyâŠinsurance companies would still make a boat load of money.
I must say manufacturer warranty, works for me. So tell me @MikeInNH you have no insurance policies that have adjusted costs to cover overhead, or every insurance coverage you have has resulted into a net gain for you.
The fine print in these service contracts varies so widely itâs hard to know if theyâre worth it in any event. I deal with a number of these companies and they run the gamut from worthless to fantastic.
Iâve seen them pay for complete diagnosis and replacement of a failed turbo with no cost to the customer beyond the $100 deductible, which more than paid for the cost of the warranty.
Iâve seen them have some ridiculously low cap on labor rate (like $80/hr), not pay for coolant for a water pump failure, not pay sales tax, not pay for diagnostic time, not pay for ancillary failures (like a belt that came off and damaged wiring), and so on.
In general, I advise people not to buy them. The exception is if theyâre buying a used car with high maintenance costs.
@asemaster just to clarify In my mind there is a world of difference between oem warranty and the shark tank of 2nd market (junk) warranty providers. I have had good service from manufacturer extended warranties, sure probably lost money, but had no doubt a major problem would be covered, agree 2nd market contracts may not be worth the paper they are printed on.