New Car Warranty Question

[BooBoo]

Just bought a new car from the dealer. I have the option of buying an 8 year/80000 mile extended warranty for $2300. The standard coverage is 3 years. I don't put many miles on the cars. Thoughts?

 

[Car-Guy]

To start, how many miles/yr do you put on a car? How long do you typically keep a car? What kind of car is it? Do work on cars yourself or depend on a professional?

 

[The Cosmic Avenger]

So you'd get an additional 5 years for that $2300. It depends...what does it cover? All repairs outside of routine maintenance? If it's a reliable car, you're not likely to have any major issues until 10-15 years, but then one big repair could cost you as much or more than the extended warranty. I probably wouldn't, partially because I tend to be meticulous about maintenance and buy cars with very high reliability ratings, so I can't imagine needing it. And on many things that wouldn't put a huge hit on our wallet, like consumer product warranties and pet insurance, I prefer to self-insure, meaning take the chance that the few expenses we do incur are less than the total of all the extended warranties/pet insurance that we could buy.

 

[frayne]

Not a fan of extended warranties on anything. Cheap old bastard that I am.

 

[Midpack]

They wouldn’t offer an extended warranty to the buyer if they didn’t profit from it. There is no way buyers collectively come out ahead. Odds are you won’t benefit, if you do it will be an exception but it’s possible. Extended warranties often have lots of annoying fine print. I never take extended warranties, and I’m way ahead without them even if I have to pay for a repair once in a while.

The biggest risk in buying an extended car warranty or vehicle service contract is that you can spend several thousand dollars and never need to use the coverage. With today's new cars lasting longer than ever, your chances of needing the coverage are fading.

The quality of extended car warranty companies and their partners that handle claims is mixed, with some generating thousands of consumer complaints. We can't stress enough the importance of checking out not only the extended auto warranty company but also the company backing its claims.

https://cars.usnews.com/cars-trucks/advice/extended-car-warranty

 

[jazz4cash]

It's more like insurance than a warranty. Some extended warranties are available to purchase up until the base warranty expires.
Get the details on when you can buy the warranty. In theory, it should cost more if you wait to buy it but if not it is to your advantage to eep the funds in your account instead of theirs. $2300 isn't so bad for 5 yrs extra coverage depending on what it actually covers. Is it the manufacturer's warranty or a 3rd party. I would avoid a 3rd party warranty. Is it transferable? That could be a plus if there is a chance you will sell the car.

 

[2HOTinPHX]

Is it a third party warranty or from the manufacturer? I have manufacturer warranties are better if you choose to get one.
Just like the price of the car the cost of the warranty should be negotiable.

We bought a new car warranty many years ago that had a refund policy if you didn't use it. You had to remember to submit a request and jump through some hoops to get the refund. We were probably one of the few that remembered to request the refund but we got the refund. So basically we loaned them money at zero percent. Live and learn.

 

[finnski1]

Not a fan of extended warranties on anything. Cheap old bastard that I am.

Makes me a cheap old bastard as well.

 

[38Chevy454]

I never buy extended warranty on anything I purchase. With your low mileage use, I doubt your new car will even have any issues within 8 years total. Any serious real manufacturing defect or assembly problem will show up in the std warranty period.

 

[COcheesehead]

Only buy insurance for perils you can’t or do not want to afford.
Extended car warranties are huge profit centers for the providers.

 

[Montecfo]

Only buy insurance for perils you can’t or do not want to afford.
Extended car warranties are huge profit centers for the providers.

Agree, I buy reliable makes and avoid warranties.

But if you want one, by all means investigate and negotiate. I recall when I was buying a car telling the after-sales guy I never buy warranties and, if I did, I would not buy theirs. I would buy from xyz company (that I had researched). The after-sales guy then dropped the price of the warranty 25%.

Of course, I still did not buy it.

 

[Bamaman]

My brother in law was a minority owner in a 28 auto dealership chain, and he ran their ESP company. They sold the ESP company, and his ROE was nothing short of incredible.

I combat buying ESP by purchasing only vehicles that are the most reliable in their class. In the last 850,000 miles we've driven, only a Ford Explorer was returned for a recall on a exhaust header--and it was no cost to me.

I've driven Toyota hybrids 42K and 69K miles and they have never seen a dealer. Toyota has hybrids down pat--with 1.5 million the road. They even hold up in NYC taxi cab usage.

Buy smart and setup a separate savings account for car maintenance and any problems. My only complaint is that some OEM tires only have a 30K lifespan and replacement tires are much, much too costly than they need to be.

 

[Sunset]

OP - What is the car, that could mean a lot and decide for you.

If I bought a BMW , I'd get the warranty. Same with a volvo.

 

[isisdave]

You can buy the manufacturer's extended warranty from ANY dealer of that brand, and there is a lively market for them. We bought Ford's 8-year 100k mile extended warranty for about half of what Ford itself and the local dealer were asking. And you usually have until the original warranty runs out, either due to time or mileage.

I understand that if somehow the vehicle is totaled before the warranty expires, insurance will return a portion of the warranty cost.

 

[OldShooter]

Only buy insurance for perils you can’t or do not want to afford. ...

This.

In the event you do decide to look at repair insurance, start by reading the "Exclusions" section but read the whole thing. DW's brass hat Mini came with their "Certified Used Car" warranty. That warranty requires that all manufacturer inspections be conducted on schedule, oil changes per schedule, etc. This gives them easy "outs" if an inspection or oil change was missed or done late. It also tends to drive revenue to the dealer, increasing the cost of the repair insurance.

DS was offered a used car warranty one time and asked me to look at it. The exclusions included everything that might typically go wrong; brakes, fuel system, electrical system, exhaust system, .... About the only thing covered was if a rod went through the side of the engine and then the engine R&R was not covered.

And yes, as @Montecfo advises, pay no more than 75% of the asking price and shoot for 50%.

But, far better, don't buy.

 

[ivinsfan]

You can buy the manufacturer's extended warranty from ANY dealer of that brand, and there is a lively market for them. We bought Ford's 8-year 100k mile extended warranty for about half of what Ford itself and the local dealer were asking. And you usually have until the original warranty runs out, either due to time or mileage.

I understand that if somehow the vehicle is totaled before the warranty expires, insurance will return a portion of the warranty cost.

This... go manufacturer and shop online for the best price. You can buy anytime you are still covered by the car's original warranty. We are two years in on a new car and will shop price and mileage in about 6 months. At that time we'll decide if we buy one. I'm not in agreement with all the car warranty slammers here they can be a good value to some buyers....

 

[ivinsfan]

Old shooter it's not always far, far better to not buy, that's an overstatement...

 

[ivinsfan]

Only buy insurance for perils you can’t or do not want to afford.
Extended car warranties are huge profit centers for the providers.

Not sure that's as true as it used to be. As of now you can go online and get many, many different prices and mileage/years combination. You can pretty much tailor it to your driving habits. At a huge discount to list.



Now one way to look at it is, for todays dollars at a set price you can lock in repairs costs for up to say 5 years and not be subject to inflation in either parts or labor costs.

 

[OldShooter]

Old shooter it's not always far, far better to not buy, that's an overstatement...

Well, I guess we can differ on that. If the OP can afford a new car, then he can afford the very small risk of a large repair expense during the last 5 years of ownership.

... I'm not in agreement with all the car warranty slammers here they can be a good value to some buyers....

Absolutely true. In the same sense that a lottery ticket can be a good value. If you win.

They wouldn’t offer an extended warranty to the buyer if they didn’t profit from it. There is no way buyers collectively come out ahead. ...

Exactly. The odds are significantly against the buyers but some do win.

I don't buy lottery tickets either.

 

[BooBoo]

It is a Subaru Forrester, I do not work on the car myself. Less than 5000 miles a year and probably will keep for at least eight years.

 

[BooBoo]

Manufacturer warranty and transferable.

 

[BooBoo]

The $2300 was already discounted from $2830. I don't normally buy extended warranties, but I do occasionally buy lottery tickets. I haven;t won the lottery yet.

 

[Car-Guy]

It is a Subaru Forrester, I do not work on the car myself. Less than 5000 miles a year and probably will keep for at least eight years.

Probably wouldn't buy it.

 

[Aerides]

I'd pass. It's a gamble, but a $2300 FULLY covered problem has to happen to break even.

And it probably requires you to keep up with all the silly dealer-required maintenances that you pay for along the way (50k mile check up, etc.)

Cars age by miles far more than years. A 7 year old car with 35k miles on it should behave like a 3 year old car. If you were driving 10-15k per year, might be a different answer.

 

[Dash man]

For a Subaru, I wouldn’t. But if you choose to, you can probably negotiate to about half the original asking price.