New car extended warranty cost/value?

[Darryl]

What Grumpy & TromboneAl said, self insure.
If your worried about a surprise expense just throw $900 in a money market and watch it grow.
I never buy these things. Insurance is a wonderfully profitable business to be in and you can start your own insurance company today by throwing the $900 in the money market, next time you are offered a warranty like this throw that money in there too. If you ever have a large repair write a check from this account, continue this process for 20/30/40 years. Then check balance in account and smile.

[jazz4cash]

I generally don't buy these unless there are mitigating factors...........these could include 4wd/AWD, very high or very low miles/yr, assuming the coverage covers these items. The point I really want to make is regarding the 3rd party warranties. As others have pointed out, they are not very good and if you think about it, the reason is obvious. Only the mfr has access to the replacement parts at cost to make the warranties worthwhile at all. A 3rd party warranty is "insurance" and any claim is subject to all the pitfalls of dealing with any insurance company.....cheap replacement parts, non-factary authorized repair facilities, etc. etc.

[Nords]

Quote:

Originally Posted by Khan Last week I received mail telling me I should consider an automobile warranty since the manufacturer's warranty on my car was expiring. Well, the original warranty was for 70,000 miles and I recently went over that; but the car is 18 years old. Their code could use some tweaking.

You should take them up on it before they realize their mistake!

Bill Gates says he's always tempted by the offers he receives for prepaid legal representation...

[FinanceDude]

I was in the auto business for 7 years..............

Take the money the warranty costs, and put it in a money market fund. Come back on this board and tell us in 3 years how much money you have LEFT OVER from the original amount.......I would guess between $5-700 minimum............

GMAC is NOT in the business od losing money...........

[73ss454]

No company is in business to lose money.

If your going to buy a warranty from a dealer make sure it's from the manufacturer of the car your buying. Ins. companies warranties are bad news.

Buy the warranty at time of vehicle sale because if you buy it later you'll pay price increases, surcharges, and it goes back to the original in service date any way. This way you'll also take advantage of the extra bennies offered during the first years when the car is under the original warranty.

End of story, that's all you need to know.

[FinanceDude]

Quote:

Originally Posted by 73ss454 No company is in business to lose money. If your going to buy a warranty from a dealer make sure it's from the manufacturer of the car your buying. Ins. companies warranties are bad news. Buy the warranty at time of vehicle sale because if you buy it later you'll pay price increases, surcharges, and it goes back to the original in service date any way. This way you'll also take advantage of the extra bennies offered during the first years when the car is under the original warranty. End of story, that's all you need to know.

Yeah, but you SOLD those warranties for over 30 years...........

Sorry, just pointing out perhaps a little bias? What about my advice??

[73ss454]

After sitting in the box for 34 years I've seen it all. My office was right next to the shop and I know what repairs cost. (nuts). It's an option that I believe in. Most folks like having the piece of mind that their not going to get killed in the shop for the 7 years that we offered.

If the price is fair it's a good deal as long at the dealer offers the manufacturers warranty only.

FD, how's my advise

[whitestick]

Quote:

Originally Posted by Peaceful_Warrior 3) I'm not sure if this is all manufacturers or just Toyota, but I know that the extended warranty can be bought any time up until the limited warranty expires. So, I could have waited until the 364th day after the car was initially sold (not to me, but just sold to anybody) and still purchased an extended warranty.

Also true for GM cars, at least the ones that I have bought. My philosophy is that I wait till close to the end of the original warrently period, and add up the totals of the warrent repairs that I would have had to make, and apply a bias that says, is there some mitigating factors (first year for this model, lot of repairs due to mechanical equipment, etc.) and if there are then purchase the extended warrenty with some basis of facts, or let it go, playing the odds that you will not incur enough problems to justify the cost of the insurance.
Has worked for me so far - 7 vehicles no extension, 2 vehicles with extension (both due to high cost of mechanical repairs due to complexity in features). Score me 9, dealers 0.

[saluki9]

Quote:

Originally Posted by 73ss454 After sitting in the box for 34 years I've seen it all. My office was right next to the shop and I know what repairs cost. (nuts). It's an option that I believe in. Most folks like having the piece of mind that their not going to get killed in the shop for the 7 years that we offered. If the price is fair it's a good deal as long at the dealer offers the manufacturers warranty only. FD, how's my advise

I agree. I deal with cars a lot and if you have negotiated the price down a little bit then I would say go for it.

To me it's worth the $900 not to worry about it. I am only 30 and in the 14 years I have been driving I've seen plenty of repairs cost more than $900. (yes, even on the toyota I owned)

[FinanceDude]

Quote:

Originally Posted by 73ss454 After sitting in the box for 34 years I've seen it all. My office was right next to the shop and I know what repairs cost. (nuts). It's an option that I believe in. Most folks like having the piece of mind that their not going to get killed in the shop for the 7 years that we offered. If the price is fair it's a good deal as long at the dealer offers the manufacturers warranty only. FD, how's my advise

I HATE using these words, but it "depends".......... :P :P One thing I noticed over the years is how folks that buy imports for the most part do an excellent job of keeping up on the maintainence of their cars, while domestic car buyers treated their cars like crap. If you ask the average Joe which car would cost them more in repairs, GM or Honda, I think we know what the answer would be................

Here's my caveat: All manufacturers put a minimum of 3 years/36,000 miles on their cars. If you have a true LEMON, would that not happen in the first 36000 miles of ownership? In my experience, it happened about 95% of the time...............

It is true that the LOWEST cost is to buy one that "extends" the manufactuer's warranty, rather than buy one "after the fact". The cost difference is significant. I have NEVER owned an extended warranty, and have yet to be burned.......... And keep in mind I owned 5 GM cars in a 22 year period, so I guess I like Russian Roulette..........

Also, dealership work tends to be the MOST EXPENSIVE avenue for repair. I have a little independent shop I got to with 4 ASE certified mechanics. Their labor costs to fix stuff is about half the cost a dealer charges. I recently got new front brakes on my Honda. The Honda dealer wanted $578 for front rotors and brakes. The independent charged me $307 plus tax.

To me, it's kind of a "scam". I think warranties on new cars from the manufacturer are overpriced, because the work HAS to be done at a dealership, and they know the costs will be higher, so they price the warranty accordingly.............

Funny, the stuff IMHO people most bitch about is stuff warranties don't cover, like grinding brakes, wipers that streak, etc............. :P :P

[73ss454]

It's like anyother ins., if you don't use it then it wasn't a good deal I guess.

You don't buy homeowners ins. to hope your house burns down and I don't know anyone who want's to use their life ins.. But if they don't use their ext. warr. it wasn't worth it.

To each his own, I like the piece of mind of knowing your not getting killed in the shop with repair costs.
Also I found that the people who have the ext. warranty like the dealer a lot better when the time comes for that repair.

[FinanceDude]

Quote:

Originally Posted by 73ss454 It's like anyother ins., if you don't use it then it wasn't a good deal I guess. You don't buy homeowners ins. to hope your house burns down and I don't know anyone who want's to use their life ins.. But if they don't use their ext. warr. it wasn't worth it. To each his own, I like the piece of mind of knowing your not getting killed in the shop with repair costs. Also I found that the people who have the ext. warranty like the dealer a lot better when the time comes for that repair.

Well, that's true for those folks who have ALL their work done at the dealership........

The only place I recall folks getting "killed" on repairs was my dealership.........

I remember taking over as used car manager, and found out our average used car was getting $1200 worth of reconditioning.........

Since the used car department is a good "customer" of the service department, the service manager and I had a little "chat". My costs dropped to $600-$700 a car, after I reminded him that one-year old trade-ins with 20,000 don't ALWAYS need new brakes and tires............

Seriously, folks should do what makes them sleep at night..........if buying a $2000 warranty on a new Toyota "floats your boat", do it.

Few if any folks I know in the car business buy an extended warranty, FWIW.........

[rjk514]

Another thought I had was that consumer reports states that the vibe is above average in reliability. If that is true then that points all the more to not getting the extended warranty.....

[73ss454]

Quote:

Originally Posted by FinanceDude Well, that's true for those folks who have ALL their work done at the dealership........ The only place I recall folks getting "killed" on repairs was my dealership......... I remember taking over as used car manager, and found out our average used car was getting $1200 worth of reconditioning......... Since the used car department is a good "customer" of the service department, the service manager and I had a little "chat". My costs dropped to $600-$700 a car, after I reminded him that one-year old trade-ins with 20,000 don't ALWAYS need new brakes and tires............ Seriously, folks should do what makes them sleep at night..........if buying a $2000 warranty on a new Toyota "floats your boat", do it. Few if any folks I know in the car business buy an extended warranty, FWIW.........

Funny but the service writer from where I worked called me the other day, he's now working at a different Ford dealer since where we both worked is going out this month. He asked me the dealer cost of an ext warranty and If I could pass it through the books where I had worked on his private car. Also our service manager bought a 7 yr 75K on his wifes Explorer last year. I also had it on my car but it has since expired.

Your not a believer and I am.

[73ss454]

Quote:

Originally Posted by rjk514 Another thought I had was that consumer reports states that the vibe is above average in reliability. If that is true then that points all the more to not getting the extended warranty.....

Get the price of the warranty from the dealer and go onto the internet and shop it around. If it looks like a fair price and it makes you feel better get it.

Let's say it cost $200 a year, if labor is $100 an hour and the warranty covers parts and labor that's not so bad is it.

[FinanceDude]

Quote:

Originally Posted by 73ss454 Funny but the service writer from where I worked called me the other day, he's now working at a different Ford dealer since where we both worked is going out this month. He asked me the dealer cost of an ext warranty and If I could pass it through the books where I had worked on his private car. Also our service manager bought a 7 yr 75K on his wifes Explorer last year. I also had it on my car but it has since expired. Your not a believer and I am.

Those folks (and you) get it at DEALER COST, which is LESS THAN HALF what they would charge a customer for the car............remember, I worked in F&I too.............

I AGREE with you there are 3 reasons people need to buy an extended warranty:

1)They get all their work done at the dealer, which typically have $100 a hour labor rates.

2)They own a domestic car

3)They want peace of mind

For me, I took the $2000 or so Chrysler wanted and put it in a money market, where it's making a little over 5%. If I need an unexpected repair, I use that money. Besides, most of the warranties have deductibles abyway, and the $0 deductible contracts are REALLY expensive.

I can understand FULLY why your friend wants a warranty on an "Exploder".........

[73ss454]

And I can't understand why you didn't buy one on a Chrysler.

Most dealer personel would get the warranty at cost. Yet you say most don't buy them, this has not been my experience.

[Fireup2020]

Confession time: I purchased a '96 Dodge Stratus (used)....and signed up for the additional warranty. About 6 mos prior to the warranty expiration, I brought the car in...they did about 4K in work (including replacing my rear windshield that had a couple lines of defroster not working - hadn't worked as long as I had the car!)...I think I had it in for a recall for that matter - and asked the service guy at Dodge to give it the once over with a fine tooth comb. I paid maybe $100 for all that stuff....transmission & other stuff I was unaware of.

Not all extended warranties are bad or useless, but I am not standing in line to buy them on any electronic gizmos!

On the flip side, current car's warranty ran out.

[CybrMike]

doesn't GM have a 100,000 mile warranty on all new cars now?

[CybrMike]

I too made the decision to self insure car repairs and all electronics. So far, I have come out ahead.