Replace car or get extended warranty?


#1

I have a 2003 Audi A4 Avant, only 51,500 miles, but middle aged and starting to fall apart over the past year and a half. I love the car but am frustrated with the repair bills. I have the opportunity to get an extended warranty through Audi, about $1000/yr (can get 3, 4, or 5 yrs). The car is worth about $7500 in trade - it isn’t worth selling privately because it currently has a few things wrong that will cost to fix up (some of which I can get the warranty to cover, one $1000+ not). Am I better off hanging onto the car with a warranty, or getting a high reliability car with this as a trade?


#2

I would think you are better off keeping the car, doing repairs as needed and skipping the warranty. The warranty is a no win, trade in may not be bad, but is audi that bad? sure my vehicle is 120k or so and just getting broken in, it is sad at 51k one is considering a car toast.


#3

That warranty was set up by Audi. They wouldn’t have done that if it wasn’t meant to make them money rather than save you money. Audis are notorious for requiring a lot of maintenance and repairs. You’d be better off getting rid of it and getting a different car if you’re worried about repair bills.


#4

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. 

Good Luck


#5

The car’s history over the past 7 years is a good indicator of what to expect in the future years. If you’re fed up with the repair bills to date, it’ll only get worse with age. Extended warrantys only very rarely recoup their cost, and they never improve the reliability of the vehicle.

I vote to trade it for something more reliable. Consumer Reports New Car Preview, available at the local bookstore, is a good refernce in making the selection.


#6

I vote trade it in.
A Mazda 6 would make for a nice replacement


#7

There is an awful lot of fine print much of which excludes all kinds of repairs. Before you go for an extended warranty you have to read and understand the whole thing. You aren’t listing the needed repairs, but if the list includes brakes (not covered), exhaust (not covered), tires (not covered), struts (not covered), battery (not covered), timing belt water pump (not covered), etc.

Extended warranties are priced to make money for the provider of the policy. They have lot of data and guess who wins most of the time?


#8

European cars should come with a warning that they’re expensive to maintain and repair. If you don’t want to spend $1000 per year in repairs or warranty, then pick something by an American or Asian manufacturer.


#9

If it’s troublesome, I’d trade. One other option, find an independent shop to do the repairs if you’re still going to the dealer for work, would cut the repairs significantly. I would not buy the warranty.


#10

While normally, extended warrantees are a loser, on an Audi with over 50K, it would be the only affordable thing to do. They will nickel and dime you to death. I guess my advise would be to trade it while you can.


#11

“Extended warrantys only very rarely recoup their cost, and they never improve the reliability of the vehicle.”

Actually an extended warranty on an Audi, written by Audi, with work to be done by an Audi Dealer, might well make it so that a lot of repairs that used to be imperative are no longer necessary.

"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?"

Excellent points Joseph.


#12

Trade it in for a Toyota or Honda!