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Extended Warranty

I have a 2006 Volve XC90 with 41,000 miles. My warranty will run out in 9,000 miles and I would like to know if it is worth to pay $3,000 for a 6 year 60,000 mile extended warrenty from my credit union.

This is their top of the line warrenty which covers just about everything the deals’ version will cover and it’s a $100 per service deductable.

Your car has relatively low mileage,and if it has been trouble-free so far, an Extended Warranty is probably a poor investment. If you put the money in a special account, it will grow, and someday you may have a major repair and you will have the money to pay for it.

I find it hard to believe that the warranty is for 60,000 miles and covers EVERYTHING!. You can begin by reading the fine print carefullyas to what is not covered; I doubt that brake repairs, cooling system repairs and overhauls, worn CV joints, worn struts, etc are covered.

We get this question a lot. Understand that you are being offered not a warranty but an insurance policy. These are craftily worded and it can be very hard to collect when you have a claim. The general advice given by not only automotive experts but also consumers’ groups is to turn down these offers.

Wow…THAT’S expensive. Think about it…Only 60k more miles to cost you $3000…WOW…

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 peop;le 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

First and foremost, do you plan to keep the vehicle that long? If not, don’t bother.
Give the credit union your $3000, but put it in a money market or savings account and call it your “extended warranty fund”. If you incur any repairs(repairs do [i]NOT[/i] include brake service, oil changes, transmission fluid changes, air filters, gas fill ups, tires(only if you have a blow out on the highway will tires be included in repairs), take money from that account. If, after 6 years/60k miles, you have anything less than $3k, then you came out behind. If you have $3k or more, then you came out ahead.

“If it wasn’t for bad luck, I wouldn’t have no luck at all.”

If that describes you, then you might want an extended warranty. If not, keep the $3000 to yourself as your own little insurance fund. That will go pretty far, and you can probably take a vacation with whatever is left over.

Sorry, but you’re wrong. If any money is left in the account after the ‘warranty’ would have run out. you came out ahead.