Extended warranty- worth it?


#1

Hi- just purchased '05 ford expedition with 84k miles- seems to be in great shape and well maintained. Trying to decide whether or not to take the plunge and shell out $1800 for continental’s 3 yr extended warranty. Are these warranties worth it? Seems the stories I hear are that everything that goes wrong is never covered. But- is $1800 too much for potentially unrealistic peace of mind? Thanks in advance.


#2

65 bucks to have a mechanic check it out is option 1. See what the warranty covers, and what potential costs are on the horizon based on the mechanic opinion. In general, they win, you lose.


#3

Take the $1800 & put it in a 1 year CD, if available. If not, put it in a savings account.

When/if the car breaks down & you need the money, you’ll have it + interest.

If you never need the money…well…it will still be there, instead of a piece of paper.


#4

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 people 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


#5

You’re not the first person to ask this here. In fact, you’re not the tenth, or hundredth, or probably even the thousandth by now. Please search for all of the previous discussions, which have all of the opinions you need.