I recently purchased a CRV. The car comes with a 3-year warranty for free. Being a first time car owner, I got talked into buying Honda’s extended 7 year warranty for $1500. After reading different reviews, I realize I don’t really need the warranty so I want to cancel.
My question is, do I still get to keep the 3-year free warranty if I cancel what Honda calls “Honda Care”?
The 3-year warranty is still in effect. You’re doing the right thing. I’ve never bought an extended warranty…and never will. They are nothing more then a very very very expensive insurance policy.
Did you solve your DMV problem?
“They are nothing more then a very very very expensive insurance policy.”
And…in my experience…useless.
Agree; I was offered a similar warranty by Toyota. The term would have expired a year ago. During that time covered my repair costs (a drive belt) came to $42! These warranties are real money makers for the dealers.
I do not buy them but there is a guy here at work that prefers Chrysler products. He has used his extended warranty numerous times on a few vehicles. In short, they paid off BIG TIME for him when he had engine and transmission problems outside of the factory warranty period. He swears by them. By and large, those that have never been burned think it’s a waste and those that have had to use them think you’re nuts for not having one…
By and large, those that have never been burned think it's a waste and those that have had to use them think you're nuts for not having one...
And the people who haven’t been burned far far far exceeds the number that had to use them. Close to 50:1. If the number of people needing to use them even came close to the number of people who didn’t…then they would never sell them. They are in business to make money…and in this case a LOT OF MONEY. Insurance companies have setup whole separate divisions for this type of insurance because of the extremely high profit margins.
My 1978 Oldsmobile had a greatwarranty. When the car was 23 years old, the left door hinge was worn and it was hard to close the door. I went to one body shop and I was told that I would have to find the hinge. I decided to see if the Oldsmobile dealer might be able to get the part. When I drove in the service writer got the body shop manager. She came out and told me that the part was no longer available. I decided to have some fun, so I,told her that when I purchased the car from this dealer, I was told that parts and,service would always be available and Iwas really disappointed. She replied that they hadn’t expected me to keep the car 22 years and drive it 225,000 miles, but she would see what she could do. She disappeared for about 5 minutes and returned with a really large bodyshop man. He had a big box wrench, a drift pin and a sledge hammer. He loosened tbe bolts on the hinge, put the drift pin under the hinge and pounded on it. He tightened up the bolts,and the door worked perfectly. When I inquired about the, charge the body shop technician said "There is no charge. We guarantee these babies 25 years or 250,000 miles.
The stupidest attempt to sell me an extended warranty came from Sears on a vacuum cleaner. We had an upright, which was great on carpets, but the tools,didn’t work very well and it was hard to use it to vacuum out the car. While walking through Sears, Isaw a canister vacuum marked down from $59.95 to $19.95. The problem was that the tools had been lost, so,all that was included was,the power unit and the hose. I bought it because I figured the tools from my upright vacuum would fit, which they did. Three days later I got a call from Sears,offering me an extended warranty on the vacuum for only $20 a year for the next three years.,I,declined.
I’ll be a dissenter. I’ve never bought one, but the thing you have to consider is 36,000 miles can go by pretty fast. I’ve been used to 50K and 5 years with a 70K drive train which offers some protection. Your chance of ever getting your money back is maybe 10% however, repairs can be very pricey these days. Especially electronics and computers and transmissions and engines. A cat converter is what maybe $700 on up?
So I’m just saying read the fine print to know what is included such as is it a bumper to bumper like the first 36 months or just drive train, etc. Then you have to make sure it is a factory offering from Honda and not a third party that can go broke or deny deny deny coverage. If you won’t be upset if you have a $5000 repair at 50K and just chalk it up to bad luck, that’s fine. But if you really don’t like surprises like that it might be something to think about is all.
Well Mike, it really doesn’t matter one iota whether or not the insurance company is making a little money or a boatload- to the one poor soul buying into the policy. All that matters to that person is if the risk outweighs the expense. Some makes/models are more prone to risk than others. Some makes/models cost a whole lot more than others to repair. Some people are far less risk averse than others. The insurance company has done a great job of weighing all the factors and stacking the deck in their favor. And setting a price point the market will bear. Naturally, otherwise it wouldn’t make much sense as a business, would it?
Your chance of ever getting your money back is maybe 10% however
Your chance of getting your money back…based on the insurance industries own stats…is less then 1%.
The insurance company has done a great job of weighing all the factors and stacking the deck in their favor. And setting a price point the market will bear. Naturally, otherwise it wouldn't make much sense as a business, would it?
Actually no. It’s not what the market will bear the determines the price…it’s how much PRESSURE is enough to put on the buyers so we can get our price point. Extended warranties are not sold like other insurance policies. The risk is almost an unknown.,…at least compared to the insurance you buy on a house. You don’t buy home insurance to cover things that break…home owners insurance covers catastrophes like fire and storm damage…not things that wear-out and break or was faulty to begin with and just need replacing.
If people were really informed about these policies…I think you’ll find the price would be a LOT LOWER. A comparable price for this coverage and what it covers…would be about $300. That would give the insurance companies the same profit margin they have with their other insurance policies.
Our 2003 Olds Silhouette needed a new transmission at 58,000 Mille, well outside the 36/36 warranty period. Olds gave away a 60/60 warranty as an inducement to buy a brand that had just announced they were going out of business. The free extended warranty covered the new transmission plus installation, about a $4000 cost. I would never have bought the extended warranty, but it did pay off in this case.
If I were a sloppy driver and did the barest of maintenance and bought a trouble-prone car such as a Dodge minivan, the warranty might pay off. I’ve seen it happen. The abusing owners did not deserve a free engine or transmission but they got it.
You also have to drive a fair amount to be able to utilize it.
You’re doing the right thing by declining an extended warranty and since you’re a first time car owner I might add this.
That 3 year warranty is not actually free; it’s factored into the MSRP of the car and the factory is gambling you won’t exceed that number in warranty repairs during the first 3 years, etc.
It’s also one reason warranty reimbursement to the dealers is notoriously chintzy.
Don’t assume that because you have a 3 year or even a 7 year warranty that everything is covered. Routine maintenance, wear and tear items, components failing because of neglect, abuse, road or environmental conditions, are not covered.
Read the owners manual disclaimers very carefully.
If the extended warranty isn’t backed by the manufacturer it’s often worthless.
We all have different views of insurance and what it should do. True maybe it should be less on items that wear out but we are talking protection against significant repairs for the $1500. I had/have life, disability, dental, long term care, health insurance in addition to the normal house and car insurance. I hoped to never collect on most of it but that didn’t mean I shouldn’t have it.
$1500 didn’t seem all that bad for an extra four years of warranty but then the risk would likely be small. Still the GM dealer down the road advertises lifetime drive train warranty, but they tack on an extra $4000 to cover it.
We all have different views of insurance and what it should do. True maybe it should be less on items that wear out but we are talking protection against significant repairs for the $1500.
Remember it’s NOT for the life of the car…Most are UP TO 100K MILES. I rarely see extended warranties beyond the 100k mile mark. If I had $1500 in repairs the first 100k miles…I’d buy a different car because that thing is a piece of cr*p. The last 5 vehicles we’ve owned I didn’t have $1500 in repairs for the first 250k miles COMBINED.
If I had $1500 in repairs the first 100k miles…I’d buy a different car because that thing is a piece of cr*p.
So what would you do if you suffered a significant failure that was more on the order of say $4500? Many people are not in a position to just suck it up and buy a different car. These policies are not aimed at people like you Mike that can afford to simply ditch the now junk car and buy a new one…
Actually no. It’s not what the market will bear the determines the price.
Actually, yes. It’s ALWAYS what the market will bear. If they tried to charge more, the number of people willing to spend that amount of money would be fewer and below the threshold to make it viable. In addition, if they tried to go higher, that would make it more attractive to competitors willing to accept less profit to steal away market share. And fear is just one factor in the equation that sets what the market will bear. It’s ALWAYS about what the market will bear…