I have a 2008 Buick Enclave with 37,000 miles on it. It’s in good condition, I’m top speed on keeping up with maintenance. Should I buy an extended warranty if I keep this vehicle? The factory warranty expires in July, 2011.
I don’t recommend it. Few people come out ahead or break even on these. In addition, outside the manufacturer’s extended warranty program, there is plenty of outright fraud, or fine print exception denials to deal with. Better to invest the money into a savings fund and take your chances.
Not worth the money. Put the price of the extended warranty in the bank instead. If you need it, it will be there. If you don’t need it, it will still be there.
Extended warranties are primarily profit for the seller and usually don’t cover nearly as much as the buyer thinks they cover.
Save your money.
Put the money in the bank. I used to sell RV’s and my boss always pushed the “extended warranties” especially for the new units. Most customers bought it. It sounds so good but very rarely delivered on the promises. The sales manager called all extended warranties “free money”. Less than 50% of the extended warranty fees were sent to the warranty provider. That should tell you something.
No. Put the money in the bank instead.
Agree; we just bought a new washer and dryer. The salesman tried to sell us on an extra 4 years warranty beyond the 1 year for “only $375”!!! The price of the set is $1700. I told him that the money was going into the bank since over the last 10 years, we bought 11 new items and the Extended Warranty on those would have cost $1100. The out of pocket repairs for the 4 years covered were a whole $125!
He had to agree that geting back $125 for spending $1100 was a poor return.
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.
Although For A Worrying Type Person I Might Recommend Buying Peace Of Mind By Purchasing Only A Genuine Factory Extended Warranty, In This Case Only A GM Warranty, You Have Hit On The Problem.
I recommend never buying a warranty other than the manufacturer’s extended warranty.
I have purchased extended warranties before, but never really came out ahead, but I did enjoy a little peace of mind.
We run four cars at once. The cost of 4 extended warranties would be excessive and chance are that I would not need major coverage on all the vehicles. Also, as you point out, a person could buy coverage on the car and the home furnace or air conditioner could go bad and the money for repairs is tied up in the car.
Buicks have a pretty good track record for reliability. Saving the money will allow the flexibility to “self insure” in lots of different areas. I believe that one should always have a “car account” for unforseen and regular maintenance expenses.
“Agree; we just bought a new washer and dryer. The salesman tried to sell us on an extra 4 years warranty beyond the 1 year for “only $375”!!!”
I can top that. Years ago, I had an upright vacuum cleaner which was great on carpets, but had lousy suction for cleaning upholstery. I found a vacuum cleaner on sale at Sears for $19.95. The low price was due to the fact that somewhere all the tools had gotten lost–all I would get for ther $19.95 was the canister and the hose. I bought the vacuum figuring that the tools for my upright would work on this vacuum which they did. Three days after I bought the vacuum, Sears called and wanted to sell me an extended warranty. For only $20 Sears would extend my warranty from 90 days to three years.
I bought a 1.1cubic foot Sears Microwave, new in the box for $56, in the mail I got an offer to extend the warranty for $60.
My thoughts on this are not automotive but rather financial in nature: If you never bought any kind of warranty on anything and just paid for repairs as they were needed, you would be money ahead.
If you consider an extended warranty only buy one backed by General Motors not third party. Third party is a nightmare.
Also the price is highly negotiable. They typically offered initially at 1.5-3 times the actual cost to seller hoping people bite(they do).
I personally don’t buy them but I think certain people’s financial states (pay check to pay check and going into debt hole) they can make sense.
My personal approach to this is put the money into an emergency fund that is fluid but earns okay interest. My wife and I managed to save over $10k and slowly add to it, avoiding warranties in case our 1965 oil fired heating Boiler dies, washer breaks, Subaru needs serious repair or well pump dies etc.