My 86 yr old friend has a 2005 cadillac deville with 51,000 miles on it. The warranty has expired. They are trying to talk her into another warranty for $7000.00 covering 4 yrs or 51,000 more years. The car hasn’t had any problems other than routine maintenance. Are they just trying to take advantage of her or should she buy the warranty. She is concerned that if something happens to her car, it will cost her more in the long run and she will be without transportation. What should she do?
DO NOT DO IT !!!
That is a total rip off and they are taking advantage of her.
On average, an extended warranty will pay out far less than the cost. Although a given buyer could possibly come out ahead, anyone who buys one is playing the odds with the odds stacked against them. If someone still wants to buy one given that fact, the usual recommendation is to get one from the manufacturer, as the third-party ones have a reputation for denying claims and even going out of business altogether.
This is CRIMINAL. $7,000? From a senior citizen? They should be arrested. And who is ‘they’? I bet it’s not a GM warranty, but a WORTHLESS warranty from some fly-by-night outfit.
Please make sure she doesn’t do this, and also that she tells her children about this so they can take steps to better protect her from thieves like these.
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 lose 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
It’s a very bad deal, especially for an older driver who puts on fewer miles. For $7000 you can affiord a lot of towing. I would just maintain the car carefully and put the money into an account.
The people trying to con her into this should be ashamed of themselves. Yes, they are just trying to take advantage of her.
Extended warrantees are methods by which corrupt individuals take thousands of dollars up front from people for work that is highly unlikely to ever be needed. And $7,000 is an outrage. Hedes has a special, extra hot spot for those who try to sell an elderly person a $7,000 extended warranty for a car with only 51,000 miles on it. These are the people Lucifer trains to be first-line demons, helping him to cheat people out of their souls.
Not only should she not take the extended warranty, she should contact the consumer reporter at the local TV station.
On a car that age , that is NOT A WARRANTY !
And that’s a red flag clue in itself, for a company to call their product by the wrong name to sucker anyone .
It’s a repair insurance policy that…
– tell her this to put her at ease –
by her own car’s track record she has proven she’ll never use even the purchase price.
If she’s even remotely concerned about the age related repairs possible, have her start a car repair savings account.
If she never uses THAT money ( or a portion of it )…, it remains hers.
if she never uses the ‘‘warranty’’ company policy…the money is GONE.
+1 to Ken Green’s comments.
In addtion, I feel the need to point out that these aftermarket “warranty” companies have two disturbing habits:
They inevitably find “loopholes” that allow them to either disallow a claim in its entirety, or to pay…perhaps…10% of the claim.
Many of them seem to go out of business after a couple of years, thus leaving the fully paid-up warranty holder with a totally worthless piece of paper and nothing else…except for an empty wallet.
Trust me…if the people who pay for these “warranties” actually received adequate value for the amount of money that they paid, the “warranty” company would not be able to make a profit. And, trust me on this one also…these fly-by-night companies DO make unconscionable profits from those who are foolish enough to believe their BS advertising claims.
I hope that she did not respond to one of those official-looking “second notice” mailers that tell you that your warranty has expired and dire consequences are on the way.
I agree with everyone. The only extended warranty that should ever be considered would be from the manufacturer. In addtion to the non-payment issue, remember a few years ago the warranty company that went bankrupt? Everyone who had bought one were just out of luck. And they were a huge operation out of St. Louis I believe.
I live in an area with lots of Sr citizens. The dealership I work at is seeing a rash of people come in who are being contacted by these scam warranty company’s. They buy lists of registrations in an area and send out mailers, or make phone calls. Many of the people who are coming in have warrantys but are being told by this scam company they do not. The govt is cracking down on these guys, but they open new companies faster then they can close them.
Not all extended warranties are bad, in some cases they make sence. However $7000 will never make sence, she could get a new motor and trans installed for that money. DONT DO IT. If she really wants one tell her to call her dealer and see what they have to offer. It should be much cheaper and be more reliable coverage. I still would not do it my self though.