What do people feel about extended warranties for cars?
They’re only worth the price if you’re buying a car that has a bad reliability record - and then you’ve gotta wonder why you’re buying a car with a bad reliability record.
An extended warranty is just an insurance policy. I would rather put the money in an interest bearing account and be my own insurer. The odds are with the insurance company. That said, my brother bought a used Cadillac where the original owner had purchased an extended warranty and the warranty was transferable. My brother has never paid a dime for any repairs done to the Cadillac which now has over 100,000 miles. For him, it was a good deal because he didn’t pay for the warranty.
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.
Only buy cars with a “good” CR or JD Powers report? I don’t think that will become reality.
As a mechanic I liked the traffic that extended warranty generated and because I know for a fact that not every claim is rejected (because I have submitted hundreds for approval and recieved it) I don’t buy the blanket cavet that “as soon as you make a claim you will find out how useless the plan is”
Just one example is leaking GM AC compressors from the late 90’s to about 2003. Who knew they were going to turn out to be leakers and avoid them?
If you buy a plan make sure you ask questions about failures from wear vrs failures from breakage,tear down diagnostic time, electrical diagnostic time and the whole rental car procedure.
Rick, How Many Cars Do You Have?
Extended waranties don’t make sense if you’ve got more than one car. They’re not “portable” from one car to another. I operate many cars in our family. Buying a warranty for one vehicle ties up money in one vehicle. That vehicle may never need repairs, but another one could need repairs. Buying multiple warranties seems too expensive and silly.
More than one car? Save the money and “self insure” a warranty.
If you buy a warranty, I would only consider a “factory” extended warranty from your car’s manufactrer (Honda America ?), not a second party vendor.
I’ve had more than a dozen cars over the years; only one with an extended warranty. Only one of them needed an extended warranty to replace the transmission. Lucky me, it was the one with the 60/60 warranty. I wouldn’t buy it, but some people are more risk averse than others.
You’re looking at a Honda. If the salesperson is trying to bully you into buying an extended warranty, just tell them you are buying a Honda, not a Fiat or Daewoo. If they continue to press you to buy(some try and scam you by telling you the loan won’t go through unless you buy it), and let them know that if a Honda needs an extended warranty so bad, you don’t want to buy their junk(emphasize the last word as you get up and walk away).
Put the money towards that warranty into the bank as the car fund only. In the end I bet you will be ahead. That is exactly what warranty company’s bet and make some serious profit.
Only if you own a Jeep, Pontiac, Buick, Chrysler, Dodge or Mercedes Benz do you have a 30% or better chance of saving money with a warranty. Consumer Reports April 2008 issue. These statistics were for 2001-2002 vehicles reported by Consumer Reports readers. The good news was that the average loss on extended warranties is only in the hundreds of dollars.
Heck, you could avoid the warranty and spend the extra $300 on a muffler swap or one and a half chrome wheels.
It depends on the price, the coverage and your peace of mind. As we are a 10k per year per car household, I know others disagree, but the comfort in knowing I will not have any car repair bills until after the car is paid off, an extra 3 years and 35k miles was well worth the $750 it cost to me just for my peace of mind.
Even the BEST extended warranties are just a very very very expensive insurance policy. They are NOT worth it. Never have been…never will be. For every person you find who actually made out buying one…you’ll find 5000 who lost. Insurance companies LOVE these policies…Very high profit…Insurance companies (Allstate, State Farm, Travelers) have started whole divisions just for extended warranties.
This reminds me of a flyer I got in the mail for “dental insurance”. This policy covered a wide range of dental work, up to a maximum of $400 per year. The annual premium, deducted monthly came to $500!!! You get the picture.