Extended warranty

I purchased a 2005 Subura outback station wagon last fall and at that time did not purchase an extended warranty - the car had about 55,000. Now, at 58,000 I can get an extended warranty from the dealer that covers most problems, including electronics. I wonder if I “should.” Sometimes my philosophy seems to be just pay for repairs as needed and other times I think I should have this “insurance.”

What do you think?

You can get an extended warranty, I believe, but it is just very expensive insurance, covering things that usually don’t break and excluding all things called “maintenance”, like brake jobs, rad flushes, timing belt repalcements, etc.

Put the cost of such a program in a special bank account and do your maintenance and repairs out of it. You will be much further ahead this way.

Not a fan. First, find out exactly what is covered, and more importantly, what is not. You may surprised at the answer. Secondly, if this is a non-manufacturer aftermarket warranty company, they are difficult to deal with, both in the diagnosis and payment processes if you do have a warranty claim. There is also an inconvenience factor if the suggested repair is questioned, and you are left holding the bag without a vehicle. Several state attorneys general have lawsuits against many of the aftermarket companies, for non-performance to the contract.

Most of us here believe you are better off putting the same money in savings and use it for major repairs (not maintenance). I know I have come out ahead by doing something similar, rather than buying an extended warranty.

Most extended warranties make a profit for company providing it. Meaning they are more likely to make money on the deal than you are. Some buy the policy and utilize it and get more services than they paid for, but most don’t.

You didn’t mention the price of the policy. Impossible to give you an answer without a price. Your Subaru shouldn’t need too much for another 3 years or so. At 10 years and 100K plus miles that’s when you’ll start with the big repairs. By then the policy will have lapsed and you’ll be on your own anyway.

Savings account gamble.

Who’s savings account do you want to gamble with ? Theirs or yours ?

If you pay them money you never use, you never see it again. ( the gamble; you pay them money then need MORE than you paid in. )

If you pay YOU money you never use…

Agreed with the others that you should not buy a policy like this and I would only add that you should not be swayed by any arguments that it “covers everything”, “will cost you nothing”, or any one of a number of claims like that.

There are many exclusions, often a deductible for EACH repair and EACH visit (even for the same thing), etc., so the fine print should be read very carefully. And if one feels they must have an ext. warranty policy then stick with one that is backed by the car maker only.

Murphy’s Law of Warranties says basically that by the time things start to fall apart, the warranty is void anyway. I make regular deposits to a separate savings account and use it just for unexpected car expenses. I bought a 9 year old car a little over a year ago, and was offered the warranty and declined; Lo and behold nothing has gone seriously wrong with the car yet, then again I do an excellent job maintaining it, but you get the idea.

Most extended warranties make a profit for company providing it. Meaning they are more likely to make money on the deal than you are. Some buy the policy and utilize it and get more services than they paid for, but most don’t.

MOST??? Try 100%. If they weren’t making a profit they wouldn’t be in business.

It’s NOT just a profit…it’s a very very high profit. Here’s an example…

A Grocery store has a profit margin of about 2-4%…This type of insurance has a profit of OVER 50%…I’m not talking about overage…I’m talking about PROFIT.

I bought a warranty with my 05 Tahoe from a dealership for the first time ever and I feel like I made a huge mistake. My car was hit by lightening (I know, crazy isn’t it) and the dealership replaced everything electronic. The warranty company was a huge pain in the (insert body part)and made everything as difficult as imaginable. My insurance company ended up paying for it and I will never buy another aftermarket warranty.
I know lightening is an act of “god” but because of the warranty company the experience was awful, and it didn’t need to be.

About 10 years ago I was given a free 7yr-70K warranty from Chrysler (in return to make me happy for other problems they caused me).

Anyway, when I had an CV joint axle boot that leaked, they said it wouldn’t cover it because the warranty only covers the boot and not clamps. The leak was due to the clamp not clamping tight enough.

Then, when the water pump seal began to seep, they said it covers water pump leaks but not “seepage” out the weep hole.

So listen to the warnings others are providing when they say that these extended warranties have carefully worded what they will and will not cover. I was amazed when I read through the warranty again in detail - only to realize how much it didn’t cover. And this was a warranty from Chrysler. At least I didn’t pay anthing for it.

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.