Are extended warranties like auto shield worth it

[zinger1457]

I've never purchased one but am starting to wonder after my new 2019 purchase and with all the high tech safety features and computer control systems how well they will hold up in the long run. Some of those systems are high $ items to repair/replace and not a DIY job.

 

[karen1972]

I would only buy one if I thought my car was a lemon and for some reason didn't want to sell it. There is always that one car that comes off the line and is just nothing but problems and at that point it is likely a good deal. However, several of the things you listed are general maintenance of any car and not sure these types of warranties cover general maintenance items like your battery replacement.

 

[ERD50]

I've never purchased one but am starting to wonder after my new 2019 purchase and with all the high tech safety features and computer control systems how well they will hold up in the long run. Some of those systems are high $ items to repair/replace and not a DIY job.

I'd bet that the insurance company has this figured out with far more resources than your "wondering", and will charge accordingly.

How can anyone expect to win at this game? Self-insure, period.

-ERD50

 

[Chuckanut]

Years ago I replaced a 20+ year warranty. The sales lady tried to sell me a maintenance contract on it telling me "These newer machines are not as reliable as your old one and are more expensive to repair." I replied saying that perhaps I should not buy the machine if that was true. She shut up. I had my Consumer Reports information on reliability, and this particular product was in the upper quadrant of reliable machines. I was confident that my odds of getting a problem machine were small.

Check Consumer Reports to see what areas your care might be the most vulnerable to failure, and the over all reliability of the car. If it's bad enough to need a warranty, only get an extended warranty from the auto manufacturer itself. Understand the deductibles and repair limitations. Or put the money aside to help pay for repairs. Or, sell it and buy a more reliable car.

 

[Sojourner]

got an extended bumper to bumper 60 month warranty on my 09 forester turbo - cost was about 1500 paid over 2 years

a few months into it the sun roof took a crap, the entire tracking assembly had to be replaced - would have cost me 1700 bucks to get it fixed so the warranty paid for itself

so yes, they can easily be worth it

I also bought an extended warranty several years ago when purchasing my new car from a local dealership: 10 year/100,000 mile bumper-to-bumper "platinum" level warranty, $100 deductible. I negotiated hard on the price, and in the end, I feel like there's a fair chance it might pay for itself. Total cost was $1700, which is a good bit less than I paid for several big repairs on my previous car over its lifetime. Time will tell, of course, if it was a good or bad decision.

 

[COcheesehead]

update: radiator took a crap yesterday - it's also covered

found out I needed some suspension work, all covered

still have full coverage till the end of 2021, so far this warranty has paid for itself almost twice

Sounds like the one and only Subaru I owned. Wait for the tranny to go out. Then you'll get an even bigger return on the policy.

 

[OldShooter]

I'd bet that the insurance company has this figured out with far more resources than your "wondering", and will charge accordingly. ...

Of course.

The people who sell these policies like to see posts where a person has won the extended warrranty bet. It is exactly like those billboards the casinos buy, showing some schlub who got lucky.

 

[COcheesehead]

Of course.

The people who sell these policies like to see posts where a person has won the extended warrranty bet. It is exactly like those billboards the casinos buy, showing some schlub who got lucky.

Agreed, never bought one, never will.

 

[aja8888]

I have no idea why some people will by this extended insurance coverage for possible repairs at the time they buy the new car. One should realize that new cars come with a determined full coverage period (miles and months) and typically drivetrain coverage up to 100,000 miles. You are paying for that initial coverage when you buy the car. Buying a policy at this time is double coverage and a waste of money.

If I was to buy one of these "extended repair insurance" contracts I would not do so until the car was out of manufacturer's coverage. These policies can be bought from third party sellers at typically 25 - 50% of what the dealer is selling them for.

For the record, I have never bought any extended repair insurance contracts.

 

[Big_Hitter]

If I was to buy one of these "extended repair insurance" contracts I would not do so until the car was out of manufacturer's coverage. These policies can be bought from third party sellers at typically 25 - 50% of what the dealer is selling them for.

that's why I bought the one on my subaru - 5 year bumper to bumper warranty on a 7 year old, modified turbo car for $1700? that's a gift

I've never bought an extended warranty upon purchase of a new vehicle.

 

[OldShooter]

that's why I bought the one on my subaru - 5 year bumper to bumper warranty on a 7 year old, modified turbo car for $1700? that's a gift ...

Really? You know more about their aggregate underwriting losses for cars like this than they do?

 

[Big_Hitter]

Really? You know more about their aggregate underwriting losses for cars like this than they do?

no, but I know that first year model turbo cars usually have issues

I'm way ahead already with 2 years to go!

 

[JustCurious]

A warranty is a guarantee issued by the manufacturer of a product. The product you are referring to is not an "extended warranty" unless it is issued by the manufacturer, it is an "extended service contract" issued by a third party. They are very bad deals. Anytime a financial product is advertised on TV, you can be sure that it is a bad deal because TV advertising is very expensive and the fact that they are spending lots of money on advertising means they are making lots of money for them which means it is a bad deal for you.

 

[timo2]

It really depends upon the item being purchased if an extended warranty is worth it. Don't warranty stupid stuff. But some things that are pricey and complicated enough may be worth it. I rarely buy extended warranties, but the ones I have purchased I needed about 60% of the time.

The first one I actually purchased was for some very expensive (pre-plasma) fancy TV years ago at a Sears. The sales guy was an engineering student, and said emphatically that this model of TV needed an extended warranty. He was correct. The item broke after a year, and the repair would have been almost $2000. Which meant without the warranty, we would have junked it.

The second time I've been lucky with an extended warranty is with paper shredders. The first two shredders I purchased (at office max I think), neither one outlasted the extended warranty and I received big credits on a new shredder. I'm still on shredder number three, so I didn't use the extended warranty on that, but I came out ahead with shredders.

The third time I succeeded with my extended warranty was the extended coverage plan for automobiles from USAA. On my old car I got my value out of that. So my new car has one too, although the manufacturer warranty 3 year warranty is not up until this August.

My most recent extended warranty purchase is on a little thermoelectric wine fridge. In doing my due diligence on the best wine fridges, I notices that a noticeable amount of reviewers complained that they broke after a a year or so years. That was across all brands, regardless of price or brand. So I got the extended warranty on that. We shall see!!

 

[FreeBear]

Almost 2 decades ago, I bought one at the dealer for my Honda CR-V. Seemed foolish given the legendary reliability, but 800 bucks didn’t seem too bad. Back then Honda powertrain was only 3 yr/36k miles. Broke even in less than 4 yrs. just average reliability. My new crv’s much better

 

[OldShooter]

The plural of "anecdote" is not "data." That some people come out ahead on some extended warranties is completely predictable. That they post about their "winnings" is also predictable. The people who pay and get little or nothing back do not boast about it. There is also a dearth of stories about insurance companies or casinos failing because they paid out more than they took in.

It really depends upon the item being purchased if an extended warranty is worth it. ...

Only if the extended warranty on a specific item was improperly priced by the insurance company. I don't think this happens very often. I would say instead that "It really depends on luck whether an extended warranty is worth it."

For the insurance company, all they care is whether the unlucky customers significantly outnumber the lucky ones. If so, their pricing is working.

 

[Al in Ohio]

Consumer Reports has done a few articles on these. They are never worth it. Go back and search some of their archives.

 

[JoeWras]

I don't believe in these at all. But... I bought my first extended warranty last month. Underground water replacement insurance. $5 per month.

Here's the thing. I'm able to join this insurance 40 years after installation. I haven't been paying for 40 years. The chance of a $3k+ failure in the next 10 years is fairly high. Over 1/2 of our neighbors have had to have their lines replaced.

Really, the only reason to do this is because it is so old, I haven't paid anything yet, and people have had good things to say about the claims process, even on complex (very deep) line failures.

Now, as for CARS. Never. For a new car, the warranties are good. And frequently, certain failure prone items are extended by the manufacturer.

As for long term repair service: they tend to fight you during the claim. Happened to DW before we were married. Found every reason to deny the claim. Never again...

 

[brett]

When I bought my new Camry in 1997 the dealer tried hard to sell me an extended warranty. This was not our first Toyota. They wanted 1000 for it. No thanks.

In 2017 I gave the car to my son. 250k miles on the clock. Only repair other than the usual mice was an ignition switch.

 

[JoeWras]

In 2017 I gave the car to my son. 250k miles on the clock. Only repair other than the usual mice was an ignition switch.

And unless these warranties have gotten better, mice damage will be excluded. In DW's case, they excluded her electrical issues because water was leaking by a window seal, unnoticed. Garbage.

 

[JustCurious]

No, they are most definitely not worth it.

 

[WhenIsItTime]

They are offered for the issuer to make a profit not loss. That means if you buy one, by design you are paying for the losing position. If your luck is that bad, go for it.

 

[Sunset]

Generally I think extended warranties are not worth it, same with after-market protection plans.

However, I have a rental, and I do pay a monthly fee for a plan on the heating/cooling system.
I do this because I don't want to deal with an emergency of the furnace not working in Winter (notice nobody has a furnace emergency in Summer ! ).
My plan includes annual cleaning which for my high efficiency furnace seems to matter.

After I deduct the cleaning cost, and the times it has been used to fix furnace, replace thermostat, replace coil in A/C (that is expensive), I've probably wasted $10 a month for peace of mind.

 

[JoeWras]

Generally I think extended warranties are not worth it, same with after-market protection plans.

However, I have a rental, and I do pay a monthly fee for a plan on the heating/cooling system.
I do this because I don't want to deal with an emergency of the furnace not working in Winter (notice nobody has a furnace emergency in Summer ! ).
My plan includes annual cleaning which for my high efficiency furnace seems to matter.

After I deduct the cleaning cost, and the times it has been used to fix furnace, replace thermostat, replace coil in A/C (that is expensive), I've probably wasted $10 a month for peace of mind.

I think you bring up a good point. If the payment results in priority service, fast turn around work, with them handling all the details, then it may be a useful service. There are a few service-plan kind of warranties that actually work well this way. Yours sounds like one of them.

However, if it results in no priority, and if they put you through the wringer to justify the service, then what's the value?

 

[Markola]

When we by a pre-owned car from a dealership once a decade or less often, yes, we buy the extended warranty from the dealership. That way, it’s in their interest and expertise to duke it out with their own warranty company. We’ve had cars before (Volvo, Saab) where the warranty has paid for itself. Now we have a dependable Acura so we’ll see if it was a good decision or not.