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Old 02-08-2016, 12:41 PM   #41
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Ripoff of the month award!

2012 - 2015 VW Passats (gas and diesel models): Heater core (behind the dashboard) is clogging up under 40,000 miles (typical). It's been determined buy VW that the solder flux used by the heater core supplier to make and install the core tubing in the core housing is not compatible with the G13 coolant VW uses in these, and all other, models. When the core clogs with coagulated muck, the heat stops and the cabin stays cold.

Now, one would think this is a standard "warranty" item and those with the very expensive "extended warranties" would also expect coverage. Correct?

Not happening! Those "warranties" cover failed parts. The core did not fail, it's merely clogged with foreign matter! Guess who has been shoveling out upwards of $1,200 to have the heater core replaced with a new core that has the same problem? You guessed it - the owners!

Interestingly, VW has put out a Technical Service Bulletin (TSB) on the proper way to change out the heater core. That TSB is for the dealership mechanics to follow. No recall is planned because recall are pretty much ordered by NHTSA for safety-related issues.

Give you a warm feeling for warranties in general (original or otherwise)?
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Old 02-08-2016, 01:24 PM   #42
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That confirms my prejudice toward Volkswagen. Excellent designs defeated by shoddy execution.
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Old 02-08-2016, 02:24 PM   #43
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I bought my truck as a CPO vehicle... at the time it was a year old and had 20k miles and the COP extended the 3/36 to 3/39 (or something like that).

In any event, we needed to replace the head gasket at just over 36k miles that was an expensive repair ($3k as I recall) and I thought it was going to be on me but the dealer said it was covered by that extra 3 months on the CPO..... whew!
I'm very curious as to the make, model and engine that needed a head gasket at just over 36,000 miles.
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Old 02-08-2016, 02:42 PM   #44
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Johnnie: Run, not walk back to that dealership and get them to rewrite that contract before Toyota Credit or Southeast Toyota's captive finance company cashes it. The reason you're buying a Camry is the rock solid reputation mechanically.

You have fallen prey to a fast talking "Business Manager" and he's simply "hit a home run" on this deal. Cancel all the add on's, including Gap Insurance, as all their programs are overpriced. Be prepared to meet some resistance and/or they will try to talk you into keeping part of the coverage. Don't fall into their trap.

It's a shame that Toyota has never purchased Southeast Toyota Distributers and their affiliated companies. Although Jim Moran has left this earth, his children still have these companies. They fly a fleet of Gulfstream Jets and have some of the largest superyachts in South Florida. And it all came from ripping people off on worthless add on's, like undercoating (in FL?) paint sealants and mud flaps. They also rip off all the dealerships in the southeast that have to purchase cars through them.
We have the same problem with our Toyota distributor, Gulf States Toyota.... years ago every Toyota had paint sealer, etc. etc. on them... there was no way to get a Toyota without all this valueless crap put on them.... way back when, when I was looking to buy one I did not know about this and thought I could go to another city... silly me...


I looked it up and these are the only two distributors!!! Looks like the rest of the country does not have to deal with a middle man taking extra money from your pockets...
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Old 02-08-2016, 02:50 PM   #45
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It's a shame that Toyota has never purchased Southeast Toyota Distributers and their affiliated companies. Although Jim Moran has left this earth, his children still have these companies. They fly a fleet of Gulfstream Jets and have some of the largest superyachts in South Florida. And it all came from ripping people off on worthless add on's, like undercoating (in FL?) paint sealants and mud flaps. They also rip off all the dealerships in the southeast that have to purchase cars through them.
"Jim Moran the Courtesy man." Dad bought a 1957 Fairlane from Moran when he was just hitting it big in Chicago many years ago.
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Old 02-08-2016, 03:42 PM   #46
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I'm very curious as to the make, model and engine that needed a head gasket at just over 36,000 miles.
Chevy Colorado 5 cyl - Volvo design IIRC - I would not read much into my instance as I think it was an isolated instance as I haven't heard of a consistent problem with those engines and head gaskets. Otherwise has been very good truck mechanically and we have 120k miles on it... 84k since the head gasket was replaced .... rust... a whole different story.
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Old 02-08-2016, 03:54 PM   #47
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Old 02-08-2016, 05:08 PM   #48
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Even considering your motivation, I would not buy any of these, especially at those prices. You would just be putting extra profit in the dealer's pocket.
Could not agree more. OP, do not let your emotions make your decisions.
Cancel all 4 items. And put the savings I the bank.
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Old 02-08-2016, 06:12 PM   #49
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I purchased extended warranty on almost all cars we purchased since 1991(Ford Taurus, Chevy Astro, Chevy Malibu, Toyota 4Runner and Lexus ES350). The cost varied from earlier purchased warranties for $900 and the last one at $1,700 for Lexus). Our extended warranty repair cost never exceeded $900 so far (sitll have it on the Lexus). Maintenance depend on where you do it, many good shops could do it for much lower cost than the dealer.
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Old 02-08-2016, 07:37 PM   #50
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Chevy Colorado 5 cyl - Volvo design IIRC - I would not read much into my instance as I think it was an isolated instance as I haven't heard of a consistent problem with those engines and head gaskets. Otherwise has been very good truck mechanically and we have 120k miles on it... 84k since the head gasket was replaced .... rust... a whole different story.
I have a friend who had to have the engine replaced after about 5,000 miles... it was covered under warranty.... Pontiac Grad Prix.... he is up into the 60s right now and his second engine is starting to have problems... he does take care of them, so it is not lack of maintenance....
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Old 02-08-2016, 07:43 PM   #51
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Must be different engine... the Grand Priz never had the 5 cylinder to my knowledge.
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Old 02-08-2016, 09:14 PM   #52
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I'm a fan of only one type of car extended warranty - the added mfg. warranty that comes with the purchase of a certified used car. I bought a used 2015 car with three years remaining on the new car warranty, and the certified qualification added another year/12,000 miles to the bumper-to-bumper coverage.
We're cpo buyers and I agree with this being a great benefit, tho we're actually out shopping for a car now and the various mfgs have started to really played with the terms of these cpo warranties, so you have to ask more questions now.

I had a BMW that was such a maintenance nightmare I appreciate longer warranties now. I would have saved a bunch if I had bought an extended one on that car.

With all the electonics in cars now, it's sort of like buying a $40k smartphone. We added a seven year bumper-to-bumper to my Acura cpo and I'm glad I did. Cost about $1000 if memory serves. We're close to buying either a Toyota Highlander cpo or Lincoln MKT cpo...will likely add some extra bumper-to-bumper on that if we can get it for the right price.
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Old 02-08-2016, 10:36 PM   #53
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Cancel all. Easier to pay for any unlikely issues with cash than try to make an insurance claim.
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Old 02-09-2016, 04:43 AM   #54
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I worked 24 years at a major auto manufacturer's captive finance company, and one of my jobs was to approve outside extended service plans to be included for financing. I am also fully trained to be a F&I man in a dealership--Finance and Insurance.

Bear in mind that any dealer can go and setup their own ESP company--with or without adequate capital resources to back it up. And realize that failures are the norm in this business with companies that are not extremely financially stable.

But it's ultimately the customer that ends up holding the bag on unsuccessful ESP companies. And because of this, any ESP company that's worth doing business with must be backed by an insurance company. Without insurance, it's just a worthless piece of paper. There are relatively few insured ESP companies.

Let me just say that you wouldn't believe how profitable the ESP companies are. Especially since modern drivetrains are so reliable. And dealers' commissions for selling ESP are also substantial.

Auto and truck dealerships are extremely competitive businesses. You can tell that by all their pricing in advertising. But dealerships' real profits often come from the "back end'--ESP, credit and disability insurance, GAP insurance, etc.

And please save your pocketbook if a dealer rolls you into a lease--commonly written at full MSRP. Leasing is highly profitable for the dealer. Although lease payments can be negotiated, few customers know enough about the subject to minimize payments.

When I go into a dealership to buy a car, I'm after the most trouble free brands and those with relatively low depreciation. And I quickly tell the F&I guy I'm not buying any add-ons. Presently, we're driving a Honda Civic SI, Lexus IS250, Ford Explorer and a 3/4 ton diesel pickup. If I thought I needed ESP, it'd only be with the manufacturer's ESP company.
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Old 02-09-2016, 07:38 AM   #55
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Thanks for all responses on this topic. I called my auto insurance agent yesterday and added GAP coverage to my policy. Auto Owners Insurance does not offer Anything in the way of extended warranties. Think I'll wait until original warranty is about to expire and then consider extending it. So, today I will cancel all four policies from the dealer. Even though I said this may be our last vehicle purchase, never say never applies in this case. Again, thanks for all the replies, information and recommendations. They were all helpful in making my decision.
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Old 02-09-2016, 07:43 AM   #56
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Even though I said this may be our last vehicle purchase, never say never applies in this case.
+1

I remember my dad saying that, and saying it again a few years later, then saying it again more than 15 years after saying it the first time...
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Old 02-09-2016, 08:03 AM   #57
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Thanks for all responses on this topic. I called my auto insurance agent yesterday and added GAP coverage to my policy. Auto Owners Insurance does not offer Anything in the way of extended warranties. Think I'll wait until original warranty is about to expire and then consider extending it. So, today I will cancel all four policies from the dealer. Even though I said this may be our last vehicle purchase, never say never applies in this case. Again, thanks for all the replies, information and recommendations. They were all helpful in making my decision.
Good luck, hope the cancellation goes well.

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+1

I remember my dad saying that, and saying it again a few years later, then saying it again more than 15 years after saying it the first time...
So, when do we know we are buying for the last time? Or should we assume (like in FIRECalc) that our needs will continue beyond the averages for our age?
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Old 02-09-2016, 08:11 AM   #58
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Or should we assume (like in FIRECalc) that our needs will continue beyond the averages for our age?
^ This. I see little to recommend setting an arbitrary driving expiration date.

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I suspect I will have outlived my teeth, probably have a bypass surgery, a hip replacement, new knees, be fighting prostate cancer and diabetes, be half blind, can't hear anything quieter than a jet engine, take 40 different medications that make me dizzy, winded, and subject to blackouts, have poor circulation, bouts with dementia, be unable to remember if I'm 85 or 92. But I'll be OK with that - as long as I still have my driver's license.
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Old 02-09-2016, 08:23 AM   #59
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I worked 24 years at a major auto manufacturer's captive finance company, and one of my jobs was to approve outside extended service plans to be included for financing. I am also fully trained to be a F&I man in a dealership--Finance and Insurance.

Bear in mind that any dealer can go and setup their own ESP company--with or without adequate capital resources to back it up. And realize that failures are the norm in this business with companies that are not extremely financially stable.
Thanks for your insights. I got royally ripped off on the financing of a Toyota in 1991 (to be brief, they rolled the costs of the add-ons such as rustproofing and a security system into the loan when I wanted to pay up front, I added the amount to the first payment and made extra payments along the way and found out I still owed $1K at the end when, according to my compound interest calcs, it should have been paid off- because the finance charge is fixed when you sign the loan). The last 2 cars DH and I bought were off rental and we wrote them a check from our HELOC account. No BS, no upsells. Perfect.

But, to get back to the OT and your second paragraph- extended warranty coverage on any product with a life of many years is notoriously hard to price and properly account for. Think about it- they collect the money when your car is shiny and new and not likely to need repairs, and if they don't keep enough in the cookie jar (the official term is "loss reserves"), when you get near the end of the warranty period and things start to fall apart the money may not be there to pay claims. You can keep writing new business to pay the old claims but eventually the house of cards will fall apart. I'm an actuary and Extended Warranty business is a specialty.
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Old 02-09-2016, 09:05 AM   #60
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.....Let me just say that you wouldn't believe how profitable the ESP companies are. Especially since modern drivetrains are so reliable. And dealers' commissions for selling ESP are also substantial.
....
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....But, to get back to the OT and your second paragraph- extended warranty coverage on any product with a life of many years is notoriously hard to price and properly account for. Think about it- they collect the money when your car is shiny and new and not likely to need repairs, and if they don't keep enough in the cookie jar (the official term is "loss reserves"), when you get near the end of the warranty period and things start to fall apart the money may not be there to pay claims. You can keep writing new business to pay the old claims but eventually the house of cards will fall apart. I'm an actuary and Extended Warranty business is a specialty.
One of my major clients was an insurer that specialized in extended warranties and it was an obscenely profitable business. Reserving was not a particular issue because claims were reasonably predictable (stable historical loss development triangles).

I totally disagree with the "house of cards will fall apart" comment with respect to these insurers.... it is unnecessarily alarming. These entities are regulated like any other insurer... they have adequate reserving practices that are audited annually, examined regularly by the regulators, lots of surplus and very strong RBC ratios. Can you cite any examples that have failed?
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