So we finally got around to writing about service contracts (aka extended warranties). Millions of them are still sold every year. Trying to help people separate legitimate companies from the scams: https://www.cartalk.com/reviews/extended-warranties/reputable-car-warranty-companies
@Car_Talk_web_monkey Why did you tag onto a thread that is 4 years old and shouldnāt this link be on the main CarTalk page instead of the Community Forum .
Without reading all the other comments, itās like anything else, if you need it itās a good deal but if you donāt itās a waste of money. What are the odds? In favor of the insurance company of course. Thatās how they make money. But do you feel lucky or not and do you have resources or not?
That all assumes youāre dealing with a legit company. Many car warranty companies arenāt.
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So I bought the extended Toyota warranty for our rav4 coming off lease in Sept. we plan to purchase the car after lease. $1400 for 8 years and 125k miles. Pretty much bumper t bumper coverage except for wear items of course. Seems like a reasonable gamble to me.
Neve ever buy any extended warranty on a car or anything else for that matter. I once looked at an extended warranty offer before signing on the dotted line of my new car purchase. I laughingly said to the salesperson, no thanksā¦if this car is any goodā¦I should not need an extended warranty for this timeline.
Most new and fairly new cars nowadays, should last a good 200,000 miles if reasonably given just routine maintenance. But other than that, check out the monthly payments for any extended warranty on anything. You will conclude, that if you put that money in a savings accountā¦you will probably exceed any likely repair to come about over a period of time. Bottom line: using consumer car shopping guides to shop for the best car in value and repair will pay off far better than an extended car warranty.
I donāt disagree but the repairs on the new cars now can be very very expensive. I never bought an extended warranty and I havenāt had much work done but the charge for two rear shocks on my Acura (covered under warranty) was over $700. Engines and transmissions now approach $5,000 plus, although they are not likely to fail. Still the odds. Then the worst would be electronic issues such computers and info systems. Saving $30 to $50 a month away for contingency isnāt going to provide much cushion. At any rate it boils down to whether a person can or wants to pay a $5000 repair bill or take a chance. When Iām approached on an appliance or home warranty and the guy asks what I would do if my XYZ thing went out tomorrow, I just say Iād buy another. But with a car you arenāt just going to buy another but gotta fix it.
Thanks for your reply. But wow, you need to be more of a conscientious shopper. Example: I had KYB struts all around put on my Nissan Sentra (installation included) for $400 out the door. I could have also done the same deal for the same amount for the optional best Monroe shocks; I happen to like KYB better. $5000 for a Acura trans or engine? You need to be a better shopperā¦and for your own good and pleasures in life. For that same Sentra, I visited a import wholesale trans and engine place and got the engine and trans together for $900 (installation included) out the door. And no problemsā¦ran like a brand new car. For those trans and engine prices you suggest, I hope you are not talking about what the car dealerships would cost you (I also believe that their costs are even higher than that). Because what you are getting is a rebuilt partā¦whether it be a trans or engine. They donāt have new parts like that laying aroundā¦so it would be a rebuilt shipped to them. Iād rather buy a slightly used (30,000 miles or less) engine or transmission. Thatās how I got my total package deal on the engine plus transmission for my Sentra. Japan has been exporting low mileage engines and transmissions to the U.S. and other places for a very long time now. It is part of their program to combat pollution from high mileage vehicles. Anyway, shopping information like this helps to save a lot of money in the marketplace. Note: For best prices on any car part or accessary, check out CARID on the internet.
Thereās no āone size fits allā warranty. Other factors and considerations come into play.
I bought new appliances for our southern home, refrigerator, dish washer, range, microwave. To buy extended warranty coverage on all 4 is expensive, too expensive. I declined. If I buy coverage on just one or two then one not covered will break. My northern home has two kitchens (it came with an extra mother-in-law/party kitchen), so 12 appliances total. Buy 12 warranties?
Many families have multiple vehicles. I have half a dozen cars. Does it make sense to buy 6 extended warranty policies?
If an individual has more than one car (or more than one whatever) then it could make more sense, much more sense, to bank the money they would have been spent on extended warranties and self-insure. That way one is sure to have coverage on the unit that goes down. If nothing breaks then itās money in the bank.
Plus, another factor, I do most car repairs DIY so cost would be a fraction of the going rate pros would chargeā¦
They donāt call me ācommon sense answerā for nothing, eh?
CSA
That is a fraction of what a typical repair shop charges. A few months ago my used car department at work had to replace a transmission in a Sentra, $3000 for a used CVT, they are in demand.
Nobody works that cheap. For example two KYB struts and two shock absorbers for a 2015 Sentra from Rock Auto cost $197 plus shipping. With sales tax and shop supplies added there isnāt enough money left for one hour of labor. That job will be at least $1000, especially since your Sentra has struts front and rear, if that is accurate.
Also cheap replacement shocks and struts arenāt available for some late model vehicles like that Acura, some have electronically adjustable dampers.
Either A - Your mechanic missed a lot of stuff.
Or B - Heās working for less then minimum wage.
Letās say he could buy a used Engine and Transmission for $500.I doubt it, but letās use that number. The real number is closer to $1500. So at $500 - that leaves $400 left for labor. Around here a mechanic Iād trust to do this work wages start at $90/hr. So that means itās taking him less then 5 hours to do the workā¦NO WAY IN HELL.
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Never buy an extended warranty except one backed by the actual manufacturer of your vehicle.
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Iāll never buy an extended warranty no matter who backs it. Waste of money.
An extended warranty is a gamble,and not a good one. Your odds ate much better at a casino.
Please read first sentence of my comment that you responded to. This also applies to you. Obviously, you are not aware of the high mileage car pollution control policy of Japan and other countries. In Japan, it is law that any car with what they deem to be high mileage (somewhere in excess of 40,000 miles) must not be on the roads. Therefore, these cars become useless. And their perfectly good engines and transmissions are exported to places that do not have such stringent vehicle emissions policy. In the U.S., there are wholesale import part assemblers who contract to receive and assemble these engines and/or transmissions in similar cars bought in the U.S. And it is not a breakdown in costs as you surmise. The workers are assemblers and not mechanicsā¦therefore no mechanicās labor rate. These places do it all. They receive these parts from Japan at a ridiculously low price, and then install themselves. Believe it or not, volume wiseā¦they do turn a profit. Before you doubtā¦ask someone who is aware of thisā¦do your diligent research.
There was only one time in my life that I bought an extended warranty, but I guess that God was looking-out for me because it paid off BIG time. In retrospect, Iām not even sure why I decided to buy GMās extended warranty for my '81 Chevy Citation (one of GMās awful āXā cars), but I wouldnāt have been able to afford all of its ongoing repairs if not for that extended warranty.
In general, extended warranties are profitable only for the seller, butāas I learnedāthey can be very valuable to the purchaser. This was almost surely an isolated experience, but as I also learned from that experienceā¦Never say never!
Really?? So whoās putting the engine in the car? Obviously not you! To remove and replace an engine requires a qualified mechanic. I take it you donāt know much about cars.
The cost of those engines from Japan for a Nissan is over $1,000
Please show me where you can get the engine cheaper.
And then show me the mechanic who will install the engine for just a few hundred dollars.
Your numbers are completely outside reality.
And for every person that actually profited from the extended warranty there are THOUSANDS who didnāt
Yes, but as my experience proves, they can be helpful.
If I was going to buy another GM product or a Volvo (no, I wonāt actually be doing eitherā¦ 
), I would be sure to buy the mfrās extended warranty.