After-market car warranties

[CRLLS]

Not sure if Mini does this. I bought an mfgr's extended warranty on a used 3 year old Ford Escape. Original warranty was over. I bought it online where the prices were easily 1/2 the list price. So far, I have 3 years into a 6 (or is it 7 or 8?) year extended warranty with no claims. That' OK. I'm happy with the peace of mind.

In '87 I bought a mfgr's warranty because they sold it to me at cost and lowered my loan's interest rate to get the sale. It paid for itself a couple of times over during my ownership.

I don't usually buy extended warranties. The few times I have, they have been worth it. The many times I haven't, self-insuring was the right decision. You pay your money and take your chances.

 

[pb4uski]

My brother in law owned a small percentage of a good size ESP company. When it was sold, he got a small fortune for his small share. It's a highly profitable business. ...

+1 I had a client that was an insurer and wrote both home warranty and vehicle extended warranty insurance... they made a boatload of money.

 

[Scuba]

I get calls every other day stating that my car warranty is about to expire and they are offering me an extended warranty. When I press 8 to speak to an operator and tell them I have a 72 Ford Pinto they get mad and hang up.

[emoji23][emoji23][emoji23]

 

[Scuba]

Are any of you guys speaking from actual experience? In 2013 we bought a new Nissan Altima...with the CVT trans. We loved everything about the car including the huge buying incentives. My husband was a little leery of the CVT so we used some of the incentive money to buy a 3rd party warranty directly from the dealer. It was 10/100K. With our mileage we figured we'd get at least 8 years out of it. Cost around 2K after some haggling. It was our understanding it was transferable so might help at resale.


In year 6 out of original warranty we had a repair.... about 1500 dollars that cost us a 100 dollar deductible. Traded the car for one with more modern safety features in Dec of 20. Due to Covid and DH's 2 heart surgeries it had around 80K. at closing we found out no it didn't transfer it was prorated and we would get a refund for our unused time/mileage. Within a week we had a check for around 600 bucks. I'm using round numbers since I don't want to dig up paperwork. So 2k original cost one repair 100 OOP 600 dollar refund in cash. We literally broke even ..not sure how that's a ripoff or a bad deal.



I don't know what you payed for that mini but I might suggest before you say no you haggle with the dealer and get and last and best price on the warranty. Or course having said that repairs costs parts and labor have gone up tremendously in 10 years.

$3,500 was the last and best price. It started at $5,000 for a 5-year warranty. Then $4K for 4 years. Then a couple of more drops to the final offer of $3,500. I told him we were passing on it yesterday.

 

[pb4uski]

I get calls every other day stating that my car warranty is about to expire and they are offering me an extended warranty. When I press 8 to speak to an operator and tell them I have a 72 Ford Pinto they get mad and hang up.

I've always wanted to tell them that I have several cars, which one is it where the warranty is about to expire?... and see what they say.... well you said that the warranty was about to expire so why don't you know which car it is?

 

[ivinsfan]

$3,500 was the last and best price. It started at $5,000 for a 5-year warranty. Then $4K for 4 years. Then a couple of more drops to the final offer of $3,500. I told him we were passing on it yesterday.

Wow that's a lot of money. Either it's Cali pricing or you might have gotten a vehicle brand with a problem repair history. It sounds like a fun car, enjoy.

 

[pb4uski]

You could always call them and offer them what you think it is worth to you. Worst thing they can do is say no, at which point you tell them that you are not interested. Who knows, they may cally you back a couple days later and say that they reconsidered and will do it for your price.

Or you could write out a check for what you think it is worth to you with extend warranty in the memo line, hand them the check and tell them that if they are willing to do it for that price then you are on board, otherwise rip up the check.... and watch them squirm.

Don't leave before they rip up the check and give it back to you.

 

[bmcgonig]

Is anyone familiar with these guys?

They sell a factory ESP for around half retail ( that’s the pitch) Ford only but there might be other dealers for other makes.

https://www.zeiglerfordesp.com/default.aspx

 

[Donno]

Is anyone familiar with these guys?

They sell a factory ESP for around half retail ( that’s the pitch) Ford only but there might be other dealers for other makes.

https://www.zeiglerfordesp.com/default.aspx

I have a Ford extended warranty on my F150 and when I was researching prices this company and Flood Ford came up as the least expensive. I went with Flood Ford because it was about $25 cheaper at the time. I paid about $800 for an 8 year warranty that covers everything except wear items for 36k miles and no deductible. I'm 4-1/2 years into it and only used it once to get a rental car when I had leave it at the shop for a week for a 4 wheel drive repair. I don't drive it much and only have 15k miles on it, but the amount of electronics and a new 10 speed transmission and twin turbos scared me enough that I figured one repair would more than pay for it.

Interestingly enough, when I bought the truck, the selling dealer wouldn't even
sell me a Ford warranty, they were pushing some 3rd party for nearly $4000 so I was a hard pass on that.

 

[CRLLS]

I looked at several genuine Ford warranties and ended up with a 96 month 75,000 mile
$100 deductible warranty. I paid around $1350 from Champion Lincoln Ford. Be aware when comparing from different sellers. At least with mine, the coverage stated started not 8 years from the date I applied, but from the date the car was originally put into service. In my case, it included the 3years and 3 months and ~18,000 miles the car had on it when I bought it. My coverage was for 4 years and 10 months or 57,000 miles of my ownership. According to my papers, it ends this coming November. Other than that, it is registered in the Ford warranty system per my Ford dealer.

 

[Chuckanut]

I have a Ford extended warranty on my F150 and when I was researching prices this company and Flood Ford came up as the least expensive. I went with Flood Ford because it was about $25 cheaper at the time. I paid about $800 for an 8 year warranty that covers everything except wear items for 36k miles and no deductible. I'm 4-1/2 years into it and only used it once to get a rental car when I had leave it at the shop for a week for a 4 wheel drive repair. I don't drive it much and only have 15k miles on it, but the amount of electronics and a new 10 speed transmission and twin turbos scared me enough that I figured one repair would more than pay for it.

Interestingly enough, when I bought the truck, the selling dealer wouldn't even
sell me a Ford warranty, they were pushing some 3rd party for nearly $4000 so I was a hard pass on that.

Rumor has it that you can get a manufacturer's extended warranty from any dealer as long as the original warranty is still in effect. Some dealer in Backwater, MN may be able to give you a better deal even if you live in California. I don't know if this is correct.

 

[CRLLS]

It is correct. I purchased my car and a Factory Warranty just outside the car's original 3-year warranty. It was tuned in after a 3-year lease by the PO. I paid up slightly for it being post original warranty. See my earlier post.

 

[braumeister]

I have always felt that the only kind of extended warranty worth buying is one sponsored by the manufacturer. And that would be only if other criteria existed:

• You put very high mileage on the vehicle
• You plan to keep it well beyond the standard warranty period
• You get a reasonably good deal on the warranty

 

[Scuba]

I have always felt that the only kind of extended warranty worth buying is one sponsored by the manufacturer. And that would be only if other criteria existed:

• You put very high mileage on the vehicle
  
• You plan to keep it well beyond the standard warranty period
  
• You get a reasonably good deal on the warranty
  

This makes sense to me. So I passed.

 

[Scuba]

Wow that's a lot of money. Either it's Cali pricing or you might have gotten a vehicle brand with a problem repair history. It sounds like a fun car, enjoy.

Thanks! It will be a blast once my shoulder heals and I can actually drive it!This photo isn’t the exact car, but the same model/color.

 

[CaptTom]

Sorry to beat this dead horse, but I think it's helpful to look at warranties the same way the insurance companies (and fraudsters) do.

Average them across all your purchases.

Over your lifetime, how many major auto repairs (e.g.; transmission rebuilds) will you need? Certainly not on EVERY vehicle you buy. Insuring all those vehicles which don't need major repairs would be a waste of money.

Expand that to every piece of technology you buy; vehicles, appliances, electronics, all of it. How many will need expensive repairs?

Just through your normal purchasing, you're doing exactly what the insurance company does - spreading out the risk.

Assume you never buy extended warranties on any appliance. If you buy one lemon appliance and have to throw it away as a total loss, you still come out ahead. You saved money by not buying the warranty on all those other appliances you've bought which never needed repair.

Extended warranties and service plans are just like the lottery: A tax on people who can't understand statistics.

 

[aja8888]

Sorry to beat this dead horse, but I think it's helpful to look at warranties the same way the insurance companies (and fraudsters) do.

Average them across all your purchases.

Over your lifetime, how many major auto repairs (e.g.; transmission rebuilds) will you need? Certainly not on EVERY vehicle you buy. Insuring all those vehicles which don't need major repairs would be a waste of money.

Expand that to every piece of technology you buy; vehicles, appliances, electronics, all of it. How many will need expensive repairs?

Just through your normal purchasing, you're doing exactly what the insurance company does - spreading out the risk.

Assume you never buy extended warranties on any appliance. If you buy one lemon appliance and have to throw it away as a total loss, you still come out ahead. You saved money by not buying the warranty on all those other appliances you've bought which never needed repair.

Extended warranties and service plans are just like the lottery: A tax on people who can't understand statistics.

Excellent post and the best way to analyze it. I have NEVER bought an extended repair policy (they are not warranties, folks) and over 50 + years of driving and 30 + vehicles (trucks, cars, motorcycles, vans) have only had one transmission wear out and my repair cost at that time was about $2500.

All other work on the vehicles was limited to normal maintenance. Maybe I lost a wheel bearing somewhere and I can't remember it.

And I have never bought any similar appliance service contracts.

Maybe I am lucky?

Please remember that when you buy a new vehicle, it comes with the factory warranty. In general, if the fancy electronics make it past the first 48 hours, the probability of a failure after that is nill.

 

[Scuba]

Sorry to beat this dead horse, but I think it's helpful to look at warranties the same way the insurance companies (and fraudsters) do.

Average them across all your purchases.

Over your lifetime, how many major auto repairs (e.g.; transmission rebuilds) will you need? Certainly not on EVERY vehicle you buy. Insuring all those vehicles which don't need major repairs would be a waste of money.

Expand that to every piece of technology you buy; vehicles, appliances, electronics, all of it. How many will need expensive repairs?

Just through your normal purchasing, you're doing exactly what the insurance company does - spreading out the risk.

Assume you never buy extended warranties on any appliance. If you buy one lemon appliance and have to throw it away as a total loss, you still come out ahead. You saved money by not buying the warranty on all those other appliances you've bought which never needed repair.

Extended warranties and service plans are just like the lottery: A tax on people who can't understand statistics.

Great way to look at this, with one addition. Extended warranties may be a good option for those who can’t afford to self-insure for a catastrophic loss. Most of the people on this forum can easily afford to pay for an expensive repairs if required.

 

[mystang52]

Extended warranties are in large measure merely a prepayment for a major non-warranty repair. Sure, we can all come up with a horror story of some potential needed repair for a transmission or something else costing $5000. But more likely is a needed repair costing $1000 or $1500. Rather than spend $3500 for extended warranty from an after-market company, take the $3500 and put it in a segregated bank account. Most likely in 4 years it'll still be there. And if the unusual major repair is needed, at least you already have $3500 socked away for it.

 

[aja8888]

Drive trains in modern ICE cars are usually warranted for 60,000 - 100,000 miles. That's where the highest repair cost would be in the event of a CATASTROPHIC failure (Ex, $4,000 transmission repair). And I'll bet the probability of that kind of event happening with a routinely serviced modern vehicle is very low.

If that's the case, why pay for an "extended warranty" (repair insurance policy) until passing the factory's warrantied miles?

 

[travelover]

Extended warranties are in large measure merely a prepayment for a major non-warranty repair. Sure, we can all come up with a horror story of some potential needed repair for a transmission or something else costing $5000. But more likely is a needed repair costing $1000 or $1500. Rather than spend $3500 for extended warranty from an after-market company, take the $3500 and put it in a segregated bank account. Most likely in 4 years it'll still be there. And if the unusual major repair is needed, at least you already have $3500 socked away for it.

Here is why.

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.

https://www.fool.com/the-ascent/per...ergency-expense-today-up-from-32-in-november/

 

[euro]

Here is why.


https://www.fool.com/the-ascent/per...ergency-expense-today-up-from-32-in-november/

Yup, very true -- and very, very sad!!!


BUT: I'd be stunned if that 49% number that applies to the "general population" were any more than maybe 1% for the audience of THIS board. So, it is not that these warranties are bad for everyone. It is just that they are bad (or pointless) for pretty much everyone who reads these posts.

 

[CaptTom]

Here is why.

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.

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

 

[ncbill]

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

What I noticed at work was people were willing to pay higher monthly premiums for health care insurance in favor of a lower total out-of-pocket...seems few want to risk having to come up with thousands of dollars in a lump sum.

 

[RetMD21]

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

do they roll it into the monthly payment?