New car extended warranty cost/value?

[73ss454]

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

PT only and the upgrade to complete coverage is now cheaper because of it.

[Nords]

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Originally Posted by FinanceDude I can understand FULLY why your friend wants a warranty on an "Exploder".........

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Originally Posted by 73ss454 And I can't understand why you didn't buy one on a Chrysler.

Considering the extra thousands already spent buying retail, it doesn't seem like it's worth the time or the effort of haggling over the cost of the warranty.

Retail buyers have already decided not to save money buying used-- because they want to remain blissfully ignorant or they want a certain car or they want warranty protection or they want peace of mind. These reasons are all deemed to be more important than the reason of saving money.

They buy the warranty because they can't financially survive a blown transmission. Or they buy the warranty because they'll sleep better at night.

But if a buyer's not gonna save money by educating themselves on how to buy a used car, then it seems like even more of a waste of time bickering about warranty pricing...

... however I think we've already firmly established that buying a new car is not a transaction made on the basis of financial logic. Whatever works for the buyer.

If I was going to buy a new car then I'd make my decision based on engineering, performance, reliability, looks, or the number of hot chicks I could pick up. I'd pick an affordable price range. Then I'd hand over my credit card and stop worrying about the money. Because if I wanted to save money then I wouldn't be there in the first place!

[FinanceDude]

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Originally Posted by 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.

Well, I take care of my cars, unlike most doemstic car owners.... And, I have a bit of advice to anyone who owns one. One month or about 1000 miles from the END of the warranty, ask the dealership to give you an in-depth safety inspection. Usually I have been charged up to $150 for this inspection. Tell them you want in in-depth report on how ALL the major systems of the car are operating. Ask them to check for TSB's and any recalls that exist, and tell them you want the report in writing when you pick up the car.

Dealers have no problem getting stuff covered under the bumper-to-bumper, it's after that when they have to decide on the amount of "goodwill" they want to extend to you that things get prickly.............

Don't kid yourself..............extended warranties are one of the highest margin biggest moneymakers a delaership has.............

[FinanceDude]

Quote:

Originally Posted by Nords Considering the extra thousands already spent buying retail, it doesn't seem like it's worth the time or the effort of haggling over the cost of the warranty. Retail buyers have already decided not to save money buying used-- because they want to remain blissfully ignorant or they want a certain car or they want warranty protection or they want peace of mind. These reasons are all deemed to be more important than the reason of saving money. They buy the warranty because they can't financially survive a blown transmission. Or they buy the warranty because they'll sleep better at night. But if a buyer's not gonna save money by educating themselves on how to buy a used car, then it seems like even more of a waste of time bickering about warranty pricing... ... however I think we've already firmly established that buying a new car is not a transaction made on the basis of financial logic. Whatever works for the buyer. If I was going to buy a new car then I'd make my decision based on engineering, performance, reliability, looks, or the number of hot chicks I could pick up. I'd pick an affordable price range. Then I'd hand over my credit card and stop worrying about the money. Because if I wanted to save money then I wouldn't be there in the first place!

Good points............I think 73ss454 and I are an enigma because as dealership employees we could buy new cars so cheap and get service work done gratis and all that stuff............ VERY few folks can say that...........

I bought a new 1996 Pontiac Grand Prix for $2500 below invoice ($13650+ tax), drove it 8 years, and then sold it for $4750 with 1300K on it. I think I got my money's worth..........

However, I paid cash for a used Honda Accord almost 2 years ago........so I guess I'm on that path..........

The only reason I bought the Chrysler is I got it for $7000 below invoice, and a low interest rate to boot. We will have it for 10-12 years, but it's our last new car........

[Nords]

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Originally Posted by FinanceDude Good points............I think 73ss454 and I are an enigma because as dealership employees we could buy new cars so cheap and get service work done gratis and all that stuff............ VERY few folks can say that...........

Eh, people think I'm crazy for working on a submarine...

[Finance Dave]

When they offer it to you for sale, there is a markup (profit) for the dealer. YOu can negotiate on the price. I think it's a good idea if: 1) You can negotiate the price down and 2) your vehicle has lots of "frilly" options that tend to break. Maybe "frilly" is not the best word...but things like power windows, navigation systems, moonroofs, traction control systems, and other such things have many electronic components that are very expensive. A power window motor alone can cost over $300.

P.S. I used to be an auto mechanic, and am still an automotive enthusiast.

Dave

[73ss454]

Quote:

Originally Posted by FinanceDude Well, I take care of my cars, unlike most doemstic car owners.... And, I have a bit of advice to anyone who owns one. One month or about 1000 miles from the END of the warranty, ask the dealership to give you an in-depth safety inspection. Usually I have been charged up to $150 for this inspection. Tell them you want in in-depth report on how ALL the major systems of the car are operating. Ask them to check for TSB's and any recalls that exist, and tell them you want the report in writing when you pick up the car. Dealers have no problem getting stuff covered under the bumper-to-bumper, it's after that when they have to decide on the amount of "goodwill" they want to extend to you that things get prickly............. Don't kid yourself..............extended warranties are one of the highest margin biggest moneymakers a delaership has.............

Nothing wrong with the dealer making some money. After all dealers are not none profit org's.

FD, if the dealer makes money on the ext warranty then they lose some money in the shop when the customer comes back for repairs under the warranty. Customer paid labor is always more than warranty money paid by the manufacturer. But the customer who has the warrany is always happier with the dealer when someone else is paying for the repair.

I'm done!

[Texas Proud]

Let me give my take.....

Back in '85 I bought a Mecury.... they wanted to sell me an extended warrenty... I said 'if you car is built so crappy I need one, I will not buy another Ford'... well, I will not buy another Ford...

Same thing for my GM Monte Carlo... it has been good over the last 12 years... a few dings here and there, but only one small one that would have been under the warrenty,

My Acura, they said 'how much will you pay for it'... they just wanted to sell it KNOWING that almost anything they get is profit... just hit three years on the car and only oil changes and tire rebalance except for the crack in the front windshield which is not covered...

[FinanceDude]

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Originally Posted by Finance Dave When they offer it to you for sale, there is a markup (profit) for the dealer. YOu can negotiate on the price. I think it's a good idea if: 1) You can negotiate the price down and 2) your vehicle has lots of "frilly" options that tend to break. Maybe "frilly" is not the best word...but things like power windows, navigation systems, moonroofs, traction control systems, and other such things have many electronic components that are very expensive. A power window motor alone can cost over $300. P.S. I used to be an auto mechanic, and am still an automotive enthusiast. Dave

Thanks for your valuable insight....... I know, our mechanics always used to bitch that what the manufacturer would pay for a warranty claim was WAY LESS than the manpower it took to do the repair. As 73ss454 says, they "make money" up front, and "lose it" in the shop.

This, however, HAS NOTHING to do with whether a customer should or should not buy a warranty............ Again, personal choice.

Let me ask this...........you have seen it all. If a car is really a lemon, are there not warning signs BEFORE the bumper-to-bumper warranty ends? Because, I've handled about 15 buybacks with GM, and there ALWAYS was a host of problems EARLY ON.........

[73ss454]

FD, lemon laws are only for the first 18 months at least in NY. Some states may differ but lemon law buybacks are always under the factory warranty. So yes you only see the problems when the car is newer if it has problems. But I disagree with you as to repairs. No one can tell when a car is going to break. The average car has 14000 moving parts so how can someone say that if it doesn't break in the 1st 3 years it won't break later. I think that's silly IMHO.

You are correct that what mechanics are paid has nothing to do with weather a customer should or should not buy a warranty. But some dealers would rather not sell warranties because of the extra money made in the shop with customer paid labor being so much higher. Case in point is the maintance warranties that are offered from the manufacturer, most dealers don't even offer them and they are great deals for the customer who has their services done at the dealer.

[FinanceDude]

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Originally Posted by 73ss454 FD, lemon laws are only for the first 18 months at least in NY. Some states may differ but lemon law buybacks are always under the factory warranty. So yes you only see the problems when the car is newer if it has problems. But I disagree with you as to repairs. No one can tell when a car is going to break. The average car has 14000 moving parts so how can someone say that if it doesn't break in the 1st 3 years it won't break later. I think that's silly IMHO. You are correct that what mechanics are paid has nothing to do with weather a customer should or should not buy a warranty. But some dealers would rather not sell warranties because of the extra money made in the shop with customer paid labor being so much higher. Case in point is the maintance warranties that are offered from the manufacturer, most dealers don't even offer them and they are great deals for the customer who has their services done at the dealer.

When I worked F&I we ALWAYS offered to extend the manufacturer's warranty at point of sale. As a matter of fact, I kept an old cheesy card file, and would call folks about 2 years in and offer to extend their warranty at that time, and I got a lot of takers...........

As far as lemon law goes, it usually is 12-18 months. However, there are provisions under something called the "Magnuson-Ross" Act that gives a customer the right to claim damages from the manufacturer past the lemon law. I have seen awards of anywhere from $2000 to giving the customer their money back..............

I remember getting into several "discussions" with the service manager about how the sales department was "killing" his bottom line with all the extended new car warranties and used car warranties we were selling............

That doesn't change the fact that my personal choice is not to buy one.............but plenty of them are sold out there............

If I ever bought a Jaguar, BMW or Mercedes, I probably would buy an extended warranty........as those cars are known to have expensive repairs........

[Gearhead Jim]

GM and Toyota (probably others) extended warranties can be sold by any dealer, not just the one you bought the car from. We had a 2001 and now a 2006 Chevrolet Corvette, purchased from a local dealer. But both times we bought the extended warranty from Fichtner (note the odd spelling) Chevrolet in Laurel, Montana. Best price we could find.

On the Corvette, and probably on your Vibe, you can buy the GM extended warranty at the new car price just so long as your car has less than 12 months/ 12k miles. If you do, THE MONTHS/MILES ON YOUR CAR GET ADDED TO THE EXTENDED WARRANTY TERM. Our current 'vette had 11,500 miles but only 8 months (yes, we like to drive it a lot) when we bought the 84 month/84k mile warranty; so the coverage goes to 95,500 miles and 92 months. GM seems to be the only company that adds the months/miles this way.

As noted above, an extended warranty is like insurance. It is a good deal only if you can't afford the repairs that it might cover, or you have reason to believe you are more likely than average to have problems. Since I drive the car pretty hard at times, I got the warranty. At about 60k miles on the 2001, it developed a series of intermittant electrical gremlins that probably would have cost more to fix than I paid for the policy. Each time something started going goofy, I'd just drop it at the dealer and say "fix it, call me when you're done." That attitude alone was worth the price.