After-market car warranties

[aja8888]

Last November, 32% of Americans said they were ill-equipped to cover a $400 emergency expense. But this year, that number has risen to 49%, according to a YouGov survey for the Economic Security Project conducted online between May 20-23, 2022.

These people are not buying new car or slightly used cars that offer extended warranties. They are buying old clunkers or not selling their old cars. And if they need repairs, they fix them themselves or the cheapest way. These people have credit cards and can vote (maybe).

 

[Jerry1]

So what makes people think they can afford the "extended warranty" plan that the sales person springs on them after a purchase?

They can finance the extended warranty as well as the purchase.

It’s all about the monthly payment. I know if you don’t have the money in the bank, you don’t have much choice but I wonder how many people in that situation appreciate how badly they’re getting taken advantage of. Many should be looking for good used cars that they can pay off sooner. Though the interest rates on a used car would be more so one would have to pay attention.

 

[CaptTom]

If they can afford the higher payment they can put that extra money in the bank, instead.

I'm not trying to be cold hearted. It's sad that people just don't know how to act in their own financial (or political) best interests. It's sad how many people are willing to take advantage of them. I wish there were something I could do to help. I know people like that, and it's horrible what they do to themselves and their loved ones. That's why I keep posting here; if I get through to just one person, I've made their life a little better.

 

[ivinsfan]

If they can afford the higher payment they can put that extra money in the bank, instead.

I'm not trying to be cold hearted. It's sad that people just don't know how to act in their own financial (or political) best interests. It's sad how many people are willing to take advantage of them. I wish there were something I could do to help. I know people like that, and it's horrible what they do to themselves and their loved ones. That's why I keep posting here; if I get through to just one person, I've made their life a little better.

Well kind of insulting to say people are too dumb to know what they are buying and that you can make their live better...OTOH you can just send people cash that would be helpful to anyone.
A...not all warranties are the same and/or cost the same.



B if you buy a new car and after the original warranty is gone buy an add on from the manufacturer. If you plan to keep that car until the extended you buy is used up. If you drive lower miles so you have basically pre--- bought the repair costs for as long as you own the car.. we bought an after market warranty from a dealer and they were 100% honest, the price was fair and we were more then satisfied with it.



C you have bought just a little less stress and hedge against rising parts and cost of labor. If that's what I decide to do that , that's my decision.



Have you ever bought a car with additional options, guess what the markup on options is huge...fancy wheels, upgraded sound yada yada.. I think that stuff is all dumb, but if you want it go for it. I'm not going to insult you by trashing the choices you made.


Our new Ford has more electronic safety features on it then you can count.I can only imagine what repairs on those item might cost.



mystang I'm curious about the last time you had 1000 car repair bill.. I'll wait. We farm and in the last 3 years repair costs for everything have just exploded.



And no I don't buy extended on toaters, tv's or washing machines. I also don't equate money and political interests, so I don't have a clue you meant by that comment. Anyway I don't see that all this piling random people that buy these products is "warranted" ..since we don't know what car they own, what product they bought, or how much money they have.

 

[aja8888]

Our new Ford has more electronic safety features on it then you can count.I can only imagine what repairs on those item might cost.

Believe it or not, but the electronic systems on newer cars are the least likely to have a problem. Electronics these days usually suffer from "infant mortality', meaning if they survive the first few months, they will live a very long normal life without premature failure.

What fails with greater frequency are rotating parts like the A/C compressor, alternator, wheel bearings, transmission internals, etc.

 

[Jerry1]

Believe it or not, but the electronic systems on newer cars are the least likely to have a problem. Electronics these days usually suffer from "infant mortality', meaning if they survive the first few months, they will live a very long normal life without premature failure.

What fails with greater frequency are rotating parts like the A/C compressor, alternator, wheel bearings, transmission internals, etc.

While I’m a believer in the “infant mortality” concept, I can’t agree in total that the electronics are of no concern. For one, unlike something like a computer, the environmental conditions in a vehicle come into play. More frustrating is the programming. I’ve had a few “gremlins” over the years that were a pain to resolve. These are complex machines and things going wrong are part of the equation. Whether the problems require an extended warranty is for one to decide on their own.

Personally, I bought the extended warranty on my truck. Couple reasons/rationale are that I get a GM discount which brings the cost on a GM issued extended warranty down considerably. Second, I want to have the dealer do the work, but I don’t want to pay dealer rates. Third, I like the vehicle under warranty as long as I expect to own it. Last, unfortunately, it’s a GM . . . .(need I say more?)

As for ownership, I’ve been one to drive new cars. When working, I got a new car every two years. In retirement, I expect something closer to 5 or 6 years. At some point, I may hold a car longer but for now, I like newer vehicles.

 

[ivinsfan]

Yes Jerry I'm not going to argue about electronics but I can say with certainly that any electronic issue with our machinery is a real PITA..the actual fix might not be a big deal but finding the cause of an intermittent electronic failure is a literal nightmare, an expensive nightmare.

 

[HI Bill]

I bought a used truck once, that had an extended warranty, that miraculously, was able to be transferred to me. However, the fine print in the warranty said that you had to have proof of all required maintenance as recommended by the manufacturer, for a claim to be considered. I don't do much of that stuff, and therefore, the warranty would be worthless to me, should I have needed it. It was a Mazda B2000 pickup, and the only problem I ever had with it was gunk that got into the fuel tank from a bad gas station.

 

[JeffreyC]

Your car doesn’t have a CVT transmission. Your MINI, an F57, is a third generation that has a proven BMW 4 cylinder engine. I currently own two.. A bad engine mount is common for this series and isn’t expensive to replace.

I wouldn’t buy the warranty, but if you do, but the MiNi branded one. There are many MINI only shops that you can take your car to for service. I’d also not be afraid of the dealer for oil changes as they are competitively priced.

Lastly, find a mini club in your area. Tons of fun and the peeps are very friendly. There’s a whole community behind you. Message me if you’d like more info or have questions.

 

[dheb]

Maybe, maybe not...I'm not talking about random cold calls from people pitching vague warranties. I'm talking about buying a reputable warranty from a reputable dealer. These are not the same thing. Generally speaking you always hope to lose money when you buy insurance...one might argue if you can get a negotiated price one that goes out 5 to 7 years you are somewhat protecting yourself against inflating labor and parts costs. Just saying...

Even buying a 'reputable warranty from a reputable dealer,' the company selling warranties has to take in more money than they pay out (including overhead); otherwise they would go bankrupt. That means, on average, most people will pay more for the warranty than they receive in benefit. When I bought a 3-year-old used truck in 2014, I bought the extended warranty, just because I was thinking that maybe the AC would quit when summer rolled around. 8 years later, I haven't had a single problem with that truck, and the AC still blows cold. I basically threw the money I spent on the extended warranty away, as the company that provided it was betting would happen.

 

[travelover]

Even buying a 'reputable warranty from a reputable dealer,' the company selling warranties has to take in more money than they pay out (including overhead); otherwise they would go bankrupt. That means, on average, most people will pay more for the warranty than they receive in benefit............

That is true for all forms of insurance. The question is whether you can afford the loss without insurance. Most of us would struggle to buy a new house out of pocket after a major fire or tornado, but paying a few thousand dollars for a car repair would be within the means of most folks here.

 

[Scuba]

Your car doesn’t have a CVT transmission. Your MINI, an F57, is a third generation that has a proven BMW 4 cylinder engine. I currently own two.. A bad engine mount is common for this series and isn’t expensive to replace.

I wouldn’t buy the warranty, but if you do, but the MiNi branded one. There are many MINI only shops that you can take your car to for service. I’d also not be afraid of the dealer for oil changes as they are competitively priced.

Lastly, find a mini club in your area. Tons of fun and the peeps are very friendly. There’s a whole community behind you. Message me if you’d like more info or have questions.

Thank you, will do!

 

[Gearhead Jim]

Over the last 20 years we've bought 4 new Corvettes, and also bought the GM extended warranty on each of them. The first 3 of those 'vettes, we "made money" on the extended warranty, sometimes a lot of money. The current car is recently out of the factory warranty and it's too soon to tell how the extended will work out.

In addition to the possible savings, there is a huge convenience factor. We use the car for long road trips, when something goes wrong we get it to the nearest dealer, hop in the usually-free rental car, and say "call my cellphone when it's fixed." Priceless.

I take good care of the cars but am picky about mechanical condition and run them hard but within their limits. And their reliability is crummy. Other folks are perhaps less likely to benefit from the extended warranty. On our Toyota family cars, we never buy the extended warranty and would have lost money big time if we did.

We don't buy the warranty when we get the car, either we wait until a few months before the factory warranty runs out or just before the end of the first year, comparing price-benefit for that decision. Press the dealer for a price comparison.

The best warranty is from GM "Chevrolet Protection Plan", Ally sells one a little cheaper but a bit less coverage, still quite good. All others need to be evaluated, some are ok and others are just a scam.

Shop around for price, most dealers overcharge but we buy over the 'net from a dealer in another state. There is a corvette forum website where you can find the good warranty sellers.

 

[JJpop]

Okay, but if the car has a known issue (the CVT trans mentioned above), doesn’t that make insurance more of an option? Read the contract and confirm what will happen if the trans goes bad. It might not be a bad purchase.

Personally, only because the OP said they would be driving it very little, I’d probably take my chances and self insure. The main thing is understanding that there is an issue common to the car and think it through. I’m not sure about Penske, but living in S.E. Michigan, that name has been around all my life. I don’t think their ability to pay will be an issue. Of course ability is not the same as willingness. Read the contract and make your best choice.

If you are concerned enough about a low mileage car that you are not going to drive much to consider adding $3500 to the price, why did you buy the car?
Makes no sense to me.