Auto insurance mechanical breakdown coverage v new car manufacturer extended warranty

[ziggy29]

Quote:

Originally Posted by Osprey I called twice and both reps said they did not have a written document to share that spelled out coverage in more detail

That is awful -- that might as well say "we'll cover it if we feel like it". Cancel it, like yesterday.

[Jerry1]

Quote:

Originally Posted by jimbee They are typically a good deal for the seller, usually not a good deal for the buyer. I would not buy it.

Generally I agree with this, however, I’ve had a couple cars with extended warranties and they did end up paying for themselves. Of course those were GM vehicles so the odds may have tilted a bit more in my favor. Plus, I receive employee pricing (father in law is a GM guy) so that helps too. Right now I have one on my truck (6yrs/100K miles). I’m going to sell the truck right before I hit one of the cutoffs. On my other car I went bare. DW does just not drive enough. I’d need something like a 10+yr/100K warranty and they just don’t sell those.

[CRLLS]

No small details on the coverage before buying is not uncommon in a lot of situations. The detail is too difficult to convey with a short synopsis. Much like buying an auto or life insurance policy, and many other kinds of service purchases. "They" give the prospective buyer a short description outlining some major points. If you buy, then you get formal documents with more detail than most will read. You then have a short period to cancel at no cost if you don't like the details. Not the way I would like it to be. But it is what it is.

[travelover]

Quote:

Originally Posted by Jerry1 Generally I agree with this, however, I’ve had a couple cars with extended warranties and they did end up paying for themselves. ............

If you were in the business of pricing and selling extended warranties and had all the durability and lab test data on the car and all of its components, would you price the policy so that most people come out ahead buying it? That is exactly the position the manufacturer is in.

[Ian S]

For me it's easier to buy a vehicle like Hyundai or Kia with a solid lengthy initial warranty. No question about what's covered and I've found routine maintenance at the dealer to be reasonable in extent and price. I mean oil and filter change for $30 is hard to beat although they just increased it to $40 for 2020.

[jimbee]

Quote:

Originally Posted by Jerry1 Generally I agree with this, however, I’ve had a couple cars with extended warranties and they did end up paying for themselves. Of course those were GM vehicles so the odds may have tilted a bit more in my favor. Plus, I receive employee pricing (father in law is a GM guy) so that helps too. Right now I have one on my truck (6yrs/100K miles). I’m going to sell the truck right before I hit one of the cutoffs. On my other car I went bare. DW does just not drive enough. I’d need something like a 10+yr/100K warranty and they just don’t sell those.

I did say they are usually not a good deal for the buyer, not always. If the policies were a good deal in general for the buyer, they wouldn't be good for the seller. Travelover's post explains it better than I do.

[ncbill]

IIRC, Geico's plan gets good reviews...it's the only non-OEM plan I'd consider if I had their insurance.

[ziggy29]

Quote:

Originally Posted by travelover If you were in the business of pricing and selling extended warranties and had all the durability and lab test data on the car and all of its components, would you price the policy so that most people come out ahead buying it? That is exactly the position the manufacturer is in.

Of course not. I think that has already been stated. They aren't going to sell something that loses money for them on average. No one is suggesting these things are a "good buy" on average for someone who can afford to self-insure.

[travelover]

Quote:

Originally Posted by ziggy29 ............. No one is suggesting these things are a "good buy" on average for someone who can afford to self-insure.

But whenever we have this discussion, someone brings up an anecdotal tale of coming out ahead. My point is that anecdotes do not equal data.

[CRLLS]

It isn't always the mathematical breakeven answer that drives whether it is a good deal or not. It could be a good deal based on one's management of possible catastrophic occurrences that makes it worth while. Think Term Life insurance. If you die during the policy period, your family wins. If you survive and never get to collect, you win but it wasn't such a good financial deal in the end. There is a real cost to such things. Overall, the issuing company wins. Individually, one might pull one over on the company.

[ziggy29]

Quote:

Originally Posted by travelover But whenever we have this discussion, someone brings up an anecdotal tale of coming out ahead. My point is that anecdotes do not equal data.

Perhaps. But on the other side, whenever we have this discussion there are people who ridicule the idea and anyone who would consider buying such a product. I would always encourage due diligence, educating yourself about the product and shopping around, but everyone has their own comfort zones, risk tolerances and everyone places a different value on removing uncertainty from their financial lives.

So I would say that people's own comfort with accepting unknown financial risk does not equal data, either. It goes both ways.

[Ebendana]

We. have used the mechanical breakdown coverage with Geico, it is very inexpensive (on our new 50,000 Diesel 4x4 3500 truck, it is about $10 per month...we don't put alot of miles, so basically it is like doubling our manufacture warranty...paid out very well on another car we owned...actually it is the reason we stay with GEICO, because much cheaper than extended warranty and much better...you have to be the first owner of a new car and get it when the car is new.