Many people are not in a position to just suck it up and buy a different ca
Yes it’s a gamble…but the odds are well in you favor. The odds of having a failure that exceeds the cost of this expensive insurance policy is more then the odds at a crap table.
Actually, yes. It's ALWAYS what the market will bear.
I disagree with that 100%. The way they try to pressure you into buying and the way they show their very skewed numbers that are really meaningless…many people are convinced it’s a GREAT deal. It’s NOT a good deal. I’ve ran the numbers…I’ve done the math…it’s LOUSY insurance policy for consumers…but a GREAT insurance policy for consumers.
Take away the high pressure sales tactics…and actually show the consumer the real number breakdown…and I guarantee you the number of people buying policies at the current price will drop like a stone.
A correction to my original post, the cost is $2400, not $1500, plus tax. (Actual cost over $2600) I mixed up the cost of Lojack (which I am keeping) with the warranty.
In any event, this week I went in person to the dealership and got it taken care of. The guy says it will take 4 to 6 weeks to credit the refund to my loan balance.
I should get back the ~$2600 (inclusive of tax) right?
The dealership’s post-sale service has been shoddy, so I am feeling like I need to pay extra attention to this. I made sure I asked for a copy of the cancellation form, so I at least have that in case they try to pull anything funny, like claim I didn’t file the cancellation within their grace period or something.
I definitely won’t be driving very much so lord willing I probably won’t use the warranty. I commute to work as it’s impossible to find parking consistently in midtown Manhattan, unless I wanna pay for parking everyday. So my driving will consist of mostly of short drives around the neighborhood or weekend trips.
The guy says it will take 4 to 6 weeks to credit the refund to my loan balance.
Hmm…I wonder if he meant that literally. i.e., your $22,600 loan (say) would then become a $20,000 loan. Possibly, your monthly payments won’t change, but the loan will be paid off sooner (?).
Tax on an extended warranty ? That does not sound right. The refund will be prorated . The refund check will most likely be made out to borrower and lending company.
If the person was dealing directly with the warranty issuer the refund would be less time. In this case the dealers commission , the lending company and the amount if coverage time all come into play. This is not like dealing with an outright purchase and return.
I was being a little facetious with 4-6 seconds…but it shouldn’t take 4-6 weeks.
This is all done electronically. No paperwork is needed. Each transaction should take at MOST 1 day. It’s a way for these companies to hold on to the money as long as they can to collect interest.
It took 4-6 weeks 30 years for a refund like this BEFORE they were using computers for money transfers.
The guy who did the cancellation said that I will not get a check. Rather I will get my principle payment reduced but my monthly payment remains unchanged. I expected this so no prob.
As long as I get the amount I should get back (i.e. $2400 + tax) I am satisfied. Since I cancelled well within the 60-day grace period I am supposed to get a full refund, according to the Honda site.
They wouldn’t allow me to do the cancellation online or over the phone. All the guy did really was do a one-page cancellation form and had me turn over my HondaCares warranty card and sign the form.
Since I live in Oregon which has no sales tax I am not all that familiar. I have had experience in other states where sales tax was only applied to physical commodities. Things like insurance, services, and labor were exempt. $2,400 added to a new car that is financed would probably also involve interest.
Yeah just depends on the state. In South Dakota there is tax on everything including groceries but in Minnesota only on hard products and not clothes, or labor, etc. Its different everywhere.
Sales tax on groceries, that’s harsh. Where I live, groceries don’t get taxed, but some junk food does. Its weird, like some cookies are considered food and some aren’t. The exact same bag of potato chips, at 7/11 they charge sales tax but if you buy them at the real grocery store they don’t.
4 - 6 weeks to refund you money? I bet they contact you in 2 - 3 weeks and say something like, “Well, wouldja be interested in re-instating it if it were $1,800? How about if it were $1,400?” Which should give you an idea of how big the profit margin is on this type of thing.
When my time to buy comes, and they hit me with that extended warranty pitch, I’m just going to say, “Well, if I really NEED this warranty, then I’m obviously buying the wrong car. I’m going to leave and go buy a car that’s built well enough that I don’t need an extended warranty”. And then sit back and enjoy the reaction.
I have only bought one automotive extended warranty. We purchased a new 1991 Jeep Cherokee in August. As a year end special it was $6,000 of MSRP. This included $1,500 manufacturer rebate, $3,000 dealer discount, and $1,500 manufacturer rebate on ABS option. $26,170 MSRP for $!8,210 (title and registration). We proceeded to the sales manager torture session. Add interior Scotch Guard, extended warranty (7 year 70,000 mile $1,700) over 3 year 36,000 mile factory. Clear coat (over existing clear coat). Undercoating (over existing undercoating). After saying no far too many times the extended warranty was offered for $500 which would “only” add $11 per month. Math was never my best subject but my organic calculator came up with $11 X 60 months= $660. I said fine and wrote a check for $500. He was visibly angry. I then dropped the real bomb. We would not be using GMAC financing (at that time Jeeps were made by Chrysler but this one was being sold by a Pontiac dealer). We had pre-approval for up to $30,000 with my Wife’s credit union. 5.5% interest verses 9.5%. He approached apoplectic but could not do anything (legally) about it. First warranty claim was nearly immediate with a wing widow weather stripping which was repaired. Second was a stuck front brake caliper at 6,000 miles which was repaired with caliper, rotor, and pads replaced. They tried to charge me $80 for brake pads that I could purchase in their parts department for $24! Of course they were non-warranted wear items. I had to point out in my owner’s manual that non warranted items that were damaged by failure of warranted items were covered by warranty. They pretended that this was a “revelation” when they are fully aware of this. They hope that the majority of customers never open their owners manual. My extended warranty paid off when the $1,400 ABS unit had to be replaced at 45,000 miles. (now at Chrysler dealer) When they said it would take 2 days I asked them to call Enterprise for my rental car which was covered under warranty. They said there was no rental covered. I had my warranty in hand and showed them it was covered. They try anything to prey on the customer’s ignorance!
@sgtrock Unfortunately your experience is very common! When I bought my wife’s Mazda3 Sport the “salesman” kept trying to get me to use the dealer financing at low interest. I said I was writing a certified check to pay for the car. He said he had to talk to the sales manger to ask his “permission”. He had never done a cash deal. Then at delivery I was turned over to another guy who sold all the other stuff, overpriced wax, extended warranty, etc. I graciously declined all this stuff.
In a desperate attempt to get more money out of me they added $200 to the final invoice since the car had to come from another dealer in a different city. I told the sales manager that was his problem and to put that extra charge “where the sun don’t shine”!
We’ve been buying our cars with cash for years. Dealers don’t like it one bit. They make a lot more money if you finance the car through them. My son bought a used car a couple years ago. I cosigned the loan. We actually did go through the dealer because they were affiliated with our credit union (DCU). Got the exact same rate and terms/conditions as if I walked in the branch and did it there.
If you want to get the best deal and suffer the least attitude from the dealership and salesperson simply take their financing and then, within 30 days, pay off the loan with cash. Most loans have no prepayment penalty and you only have to pay off the principle balance. This keeps the process at the dealership friendly and tips the bargaining power in your favor. Simply keep them believing that they will get the financing commission and they will lighten up on hammering you for warranties and useless add-ons. You can also get a lower price sometimes. They have no idea you will paying off the loan in 30 days and it is really not any of their business.
I’ve done all three or four. It just depends. Back in the Carter days it was 18% at the bank I’ve used since a kid, plus they used the rule of 78ths that accelerated interest. Up from their normal 11%. So GMAC at 7% was very attractive back then. Credit union was a little better than the banks then but didn’t always have money. Now of course the CU is 3%, but Honda was 1% and not sure what the bank is. I like them but won’t pay their rates any more. So it just depends but I agree with Bloody, rather than complicate the transaction, just pay the thing off if you want to pay cash.
Nah, don’t believe that. I think SOME people may feel it is a good deal but most are driven by FUD. That’s Fear, Uncertainty and Doubt. The very fundamentals of insurance sales. No way any LOGIC is going to counteract FUD. The market price is what it is based in large part on FUD factor.
I think you’d have as much luck trying to explain to the target audience why diamond prices are ludicrously over inflated and get them to forego buying a diamond ring. Fabulous example of marketing strategy IMO. They know EXACTLY what that market will bear, and even give you the guideline to boot (in case you have any ideas about weaseling out)!
The only two extended warranties I’ve bought have been on my Garmin GPS ($40), since there were rumours about the touch screen not lasting, and my Carrier high efficiency gas furnace ($500 for 5 years additional). This was new technology at the time and repairs on those furnaces cost a lot. So far, no problems and we are almost at the 10 year point where the additional warranty expires
In 2003 ford was offering 0% financing for 6 years, wifes van was up against a $1200 ac repair as the compressor in the old plymouth van puked. Got a good deal, and 0% financing. 6 months later my 11 year old truck was facing repairs of some sort, it was running so lousy I was afraid I would not get it home, got a great deal, 10,300 for a new ranger, but was denied financing still at 0% because I had taken a loan out with them in the previous 6 months. No matter my credit score was in the incredible range.
Got extended warranties for both, I am sure they made some money, but we did have a few repairs covered that would not have been covered otherwise.
