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Old 06-17-2017, 08:15 PM
Hanna is offline
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Need advice: New car, accident, extended warranty


i bought a brand new car six weeks ago. Monday last week, I was driving home from work on the interstate, traffic stopped, I stopped, and a distracted driver rear ended me pretty hard. I'm sore, but OK. We both have car insurance, and I filed a claim through mine.

The body shop I had it towed to called me and said the exhaust had been pushed up into the rear differential and ruined it, and the repair quote was $9000 so far, before they got my permission to tear the car apart and look for more damage. They expect the repair costs to go up after tear down.

I planned on keeping the car 8-10 years so I bought an extended warranty. My main concern is that somewhere down the road something will go wrong with my car, and I will be denied warranty coverage from the extended warranty company due to the severe damage caused by the accident.

This is the first time I've bought an extended warranty for a car, and I'm not sure what to do. Does anyone have any advice? I can cancel the extended warranty within 60 days of purchase and get all my money back.

I bought this new car because my last car had a catastrophic engine failure and the cost to replace the engine was more than the car was worth. An extended warranty would have saved me a lot of money (that's why I bought one this time, I basically took a total loss on my last car).
  #2  
Old 06-17-2017, 08:28 PM
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You should have the right to insist on OEM parts and should pursue that with a car that new. That I think would also help for the E.W.

Also if the airbags went off, your car is worth less, and you may be able to get some cash from insurance for that.

Last edited by kanicbird; 06-17-2017 at 08:29 PM.
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Old 06-17-2017, 09:27 PM
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How much does the insurance company think the car is worth? Depending on that answer $9000 and counting sounds like it could head into write off territory soon enough.

Also, was it a third party warranty or an actual manufacturer's extended warranty? My personal experience with using my manufacturer's extended warranty at the Acura dealership is that they're pretty accommodating. Granted they were minor things but my impression was they valued having a happy customer over any short term additional profit trying to screw me would earn.

My impressions reading about third party warranties is that the fine print can make them virtuously worthless even in the best of circumstances, and they'd jump on any excuse to kill your claim.
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Old 06-18-2017, 08:59 AM
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Thank you for replying. I already cleared it withth claims adjuster and the body shop to use new OEM parts. My airbags did not go off (isn't that normal in a rear- end collision? I was at a complete stop, too).

I don't know what the insurance company thinks it is worth. I paid $23,500 for it six weeks ago, when it had 4 miles on the odometer. It's at 2,630 now. The extended warranty is third party, through a company called Warrantech.

My main worry is down the line something happens with my drivetrain, and the extended warranty coverage will be denied because of the parts being replaced due to the accident. I'm paying an extra $41 a month for this extended warranty coverage and I would probably be better off saving that myself for any repair work I might need, instead of giving it to a company that may or may not pay out when I need them to.

The vehicle is AWD and I think that is why the damage cost is so high.

Thanks for your advice..
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Old 06-18-2017, 09:12 AM
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Insist on a new car. Your car's value dropped under $20,000 as soon as you drove it off the lot. If they won't do that insist that every single part that was as much as scratched be replaced with an OEM part. Beats me if that will work but you ought to give it a shot.
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Old 06-18-2017, 09:28 AM
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I wonder if they'd go for that. I have been so stressed about this all week that my anxiety is returning. Ugh. I wish drivers would pay attention!
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Old 06-18-2017, 09:45 AM
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If the other car rear ended you, why did you file a claim through your own insurance?
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Old 06-18-2017, 10:04 AM
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Because my claims adjuster takes care of dealing with the other insurance company. That's how I've always done it.
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Old 06-18-2017, 10:14 AM
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If anything's wrong with the drivetrain that would void the warranty, shouldn't they total it out?
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Old 06-18-2017, 10:25 AM
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If anything's wrong with the drivetrain that would void the warranty, shouldn't they total it out?
I don't know how it works. It's a good question to ask though. Thanks!
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Old 06-18-2017, 10:39 AM
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That it is a 3rd party extended warranty, I would tend to drop it, I would tend not to have gotten it, I've heard not much good out of those things, and a lot of work to recover money. The manufactures one I would consider keeping.

Your $41/month is about $500/year. Your repairs will be guaranteed by the repair shop and enforced my insurance for a bit plus you are under the manu's warranty for most likely 36,000.

At your current rate of driving 2600/6 weeks you are talking about about 1.75 years of the manu's warranty. Or about $850 given to the extended warranty before it can start being used. If it has a deductible you can add that on too - and it increases by $41 per year.

With that and uncertainty how much if any they will pay - I'd bank it, at least you have the cash.

IDK about if the airbag should deploy, frontal ones should not but there are all types of airbags, side, even seat based ones.. But good for the value that they didn't.

Subaru by any chance?

Last edited by kanicbird; 06-18-2017 at 10:41 AM.
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Old 06-18-2017, 10:45 AM
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Mazda. That's what I'm thinking too - drop it. But, my gap insurance was included (bundled) with that warranty. I'm glad I have that now, in case they do write it off.
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Old 06-18-2017, 11:27 AM
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Get a lawyer and sue the fuck out of the idiot that rear ended you. Buy a new Corvette, or whatever you want.
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Old 06-18-2017, 12:44 PM
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Do you have Gap Insurance? (Or its US equivalent.)
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Old 06-18-2017, 01:33 PM
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Do you have Gap Insurance? (Or its US equivalent.)
Yes, I do...glad I bought it now. I've usually put enough down or traded in a car of value on my new vehicles so I never felt a need to buy gap insurance before. My last car was such a disaster that I had to start over. Took a huge loss on that car and I'm so afraid of getting screwed agin with this one.

I know it is worth much less now (especially because of the accident) than what I owe, which is basically the whole purchase price plus the $1800 warranty/ gap insurance cost. I've only made one payment on this car!
  #16  
Old 06-19-2017, 10:20 AM
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Originally Posted by Hanna View Post
somewhere down the road something will go wrong with my car, and I will be denied warranty coverage from the extended warranty company due to the severe damage caused by the accident
Read your policy. Does it stipulate that they can deny a claim for such things?

Extended warranties are usually not worth it.
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Old 06-19-2017, 10:27 AM
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Hanna, i hope you can get a new car, that's what you had, you should be made whole with a replacement. Repairs won't make you whole, there's going to be a record of the repairs decreasing the value of the car no matter how well they restore it's condition.

Please let us know how this turns out.
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Old 06-19-2017, 10:54 AM
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A 23k car is really only worth half that (depreciation and all that BS) when it's a month old and been in a bad wreck. Let them find all the damage and hope it is totaled.

If you financed the car, they may not let you cancel the extended warranty.

If you ever buy an extended warranty again, ONLY buy it through the manufacturer. NEVER buy a 3rd party ex warranty. See Consumer Reports on extended warranty. They say "don't buy 3rd party. At least that's the way I remember the article.
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Old 06-19-2017, 11:14 AM
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If the insurance company won't total your car, you can file a claim for diminished value.

I did this in 2015. I'd had a new car (a Mazda, coincidentally) for six months when a woman rear-ended me on a major highway during rush-hour traffic. No question about fault, and her insurance company was very willing to pay for all repairs (around $9,000 worth, I think).

When I brought up the topic of diminished value, though, they got very squeamish. As noted earlier, your car will never be worth what it "should" be, due to the major repairs being done. I got an appraisal company to research what my repaired car would be worth as a trade-in vs. a similar car without that damage. Their estimate was the car had lost roughly 28% of its value (around $6,400, if memory serves).

I presented the findings to the insurance company, and they initially offered $1,000 for the diminished-value claim. I refused, and they immediately upped the offer to $3,000. I refused again, and had a polite phone conversation with the adjuster who'd been working my overall claim. She said the insurance company as a standard policy wouldn't pay diminished-value claims, and that they were bending their rules by offering me anything.

I said, "You've been very helpful to me throughout this process, and I appreciate that. (She had been, too; she was very nice.) You know your insured driver admitted fault in the accident, and the police report backs this up. I've presented my rationale for the diminished value claim, and the extensive documentation from the appraisal company that came up with the $6,400 figure. You can either pay the $6,400, or I'll take you to court, and the court will make you pay the $6,400, plus my legal fees. It's your choice."

Later that day, I got an email from the adjuster, saying the company had approved my claim for $6,400. I got a check in the mail in less than a week.
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Last edited by Sauron; 06-19-2017 at 11:15 AM.
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Old 06-19-2017, 11:51 AM
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Hanna, i hope you can get a new car, that's what you had...
At the time of the crash, he had a six-week-old car with (guessing) 1700 miles on it. Would you pay the new-car price for such a car if you saw it on the dealer's lot?
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Old 06-19-2017, 09:02 PM
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At the time of the crash, he had a six-week-old car with (guessing) 1700 miles on it. Would you pay the new-car price for such a car if you saw it on the dealer's lot?
Depends on the insurance policy. In mine, if the car was written off (totalled) within 2 years of purchase, then yes, I would get a new car as replacement. If it can be repaired, then no.
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Old 06-19-2017, 10:22 PM
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At the time of the crash, he had a six-week-old car with (guessing) 1700 miles on it. Would you pay the new-car price for such a car if you saw it on the dealer's lot?
I'd pay a lot closer to the new price than I would for one where the Carfax said it was in an accident.

2,630 miles according to the OP, but I'm not talking about the resale value (which a court would I suppose), it had that new car feel to the owner. The OP will never get that feeling back without a total replacement. I'd do everything I could to get a new car if I was in the OP's position, or at least get compensated for the diminished value as Sauron suggests.
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Old 06-24-2017, 10:04 AM
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If the insurance company won't total your car, you can file a claim for diminished value.
Thanks for the advice. How did you find your appraiser? I did a quick search and it looks like a lot of national companies advertise on Google. Did you do that route or find someone local to you?

I've been out of town for work all week, so my spouse has been handling most of the car details. They said repair costs would be $10,800, but my insurance company made a deal for $8,300. They will use all OEM parts. I have decided to drop the warranty (I have until June 29 to get the fulll cost back) and save the money to make any repairs past manufacturers warranty myself. The parts replaced by the accident will have their own warranty for a period of time.


Thanks for all the replies! This has been a very, very stressful situation. I even briefly thought about defaulting on the loan, but my credit is really good, and I still need a car.
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Old 06-26-2017, 08:16 AM
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Thanks for the advice. How did you find your appraiser? I did a quick search and it looks like a lot of national companies advertise on Google. Did you do that route or find someone local to you?
I searched on Google, and found one that had good reviews and a good reputation: The St. Lucie Appraisal Company. They're in Florida, which isn't local to me. They charged me $200, I think (looks like now their going rate is $275).

What impressed me was their methodology -- they provided the specifics of my vehicle (make, model, accessories, etc.), along with the list of repairs being made, to six used car dealers in a 200-mile radius of my location which specialized in Mazda vehicles. The dealers were told the vehicle wasn't available for purchase, so they had no vested interest in the outcome. The appraiser consolidated these results to determine the average diminished value.

You can do the same thing yourself, of course; for me, it was worth the price to have it done by a licensed appraiser.

For what it's worth, I was impressed by their service and professionalism, and would recommend them if you go this route.
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Old 06-26-2017, 08:03 PM
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Thanks!
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Old 11-01-2017, 08:16 PM
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I want to update this thread. I did get my car repaired to my satisfaction, dropped the extended warranty (the body shop has a lifetime warranty on the parts they fixed or replaced, and I figure I can pay out for other things myself with the money I'll save).

I did file a diminished value claim. I contacted 5-6 companies that do that sort of thing, settled on a mid-priced one ($250), and the insurance company and I settled on $3500. That was pretty much what the majority of diminished value claim companies said I should expect, so I am OK with it. Thanks for alerting me to that Sauron! It softened the blow of my brand-new car getting damaged so badly a little bit.
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Old 11-27-2017, 08:48 PM
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Happy I could help you with that!
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