I have a 2005 Ford Taurus SE Wagon that I
purchased in March 2008. The Limited Warranty runs out soon. Should I purchase a
warranty or should I self insure by maybe
putting away $200 a month for about a year. And if should purchase a warranty, what kind, where, etc. What’s my best deal
Have no clue.The mileage was 54,800 and is now 59,000 so I put about 1,300 a month. Only drive it around the city, but might take a road trip in it.
I have a 2005 Ford Taurus SE Wagon that I
Forget the extended warranty and just set aside the money. Extended warranties are just money makers for the people who sell them.
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.
Thank you so much for answering my post. Now, you do understand that the car I purchased in March 2008 came
with a limited warranty and is now running out. The company that sold me the car is not trying to offer me
another warranty, in fact they don’t sell them. I’m just wondering should I purchase a warranty from an
independent warranty company. I don’t think I’ve ever purchased a pre-owned car before. Generally a warranty came with the new cars I purchased and then I sold them before those warranties ran out. But this
being a used car I didn’t know if I should perhaps get a warranty. You are right, I read the limited warranty that came with this car and it didn’t cover much as it was, so I think you are saying don’t purchase a warranty period, no matter who offers me one. If I’m going to give a warranty company a down
payment of several hundred dollars and then pay another $150 a month, I should just pay myself $200 a month and that would give me peace of mind that I have some money should the car need repairs?
That’s kinda what I thought. Thanks for re-assuring me.
You would not be purchasing a warranty. Technically, you would be buying an insurance policy and one with a lot of terms. Some are reputable and some are not. A rather large company filed for chapter 11 protection last year leaving thousands of customers unable to have claims processed. As an insurance company, they have actuaries that determine the risk, i.e., the likelihood that your car will need a major repair during the duration of the policy. I can tell you that the odds are in their favor that you will pay a large sum of money for the policy and may never need to use it, or will have minor repairs within the deductible or what breaks will not be covered. You are FAR better off setting aside money for repairs. If you never need them, you will still have your money. Forget about the so-called extended warranty; they are not a good investment.
Extended warranties are always a poor bet from a numbers standpoint, but you cannot put a number on peace of mind.
If you would like an extended warranty, see if the company that sells your car insurance offers one, they are likely easier to deal with than the usual extended warranty companies.
Satin Doll; as mentioned by other posters, pay yourself and start a “Repair Kitty”. Everyone seems to be in agreement that this is not a warranty, but very expensive insurance. My mechanic advises his clients to set aside $125 per month to care for their vehicles.
In consumer products extended warranties, this situation is even worse. I kept track of 11 household appliances we bought with the standard 1 year warranty. Extended warranties for these normally cover the next 4 years. If I had bought the “warranties”, I would have spent $1150!!! Instead I paid for those repairs in years 2-5 myself, and spent all of …$125!! So, as you can see, the odds in Las Vegas are much better than coming out ahead in an extended warranty. Spending $1150 to save $125 does not make a lot of sense, does it? Sears is one of the worst companies for aggressively pushing these warranties.
If you carefully read the terms of these car warranties you will find many exclusions and those items covered seldom break down during th period covered.
Thank you so much. You are absolutely right. Now that I think about it objectively, it is just insurance.
And there are lots of exclusions in the one that came with the car that is about to end. Thanks for taking
the time to help me.
I agree with the “repair fund savings” over a “warranty” policy. Also, if EVER purchasing an extended warranty policy from another company besides the manufacturer (on anything, even refrigerators etc. ), FIRST find a repair facility who will actually honor that company’s warranty. Many oddball companies offer a “warranty” but just try finding someone who can actually get paid and then you might have something to consider.