Just bought my wife’s new car, an Ioniq5 SEL. And of course have the final pitches that you’d think I’d have been ready for (but wasn’t) hard selling the various products.
Easy no on the “gap coverage”, extra insurance to cover the gap of what insurance covers if car is a total loss and a new car.
Fairly easy yes on the roadside assistance tire package where you can call for a tow and tire replacement is covered. My wife drives through areas apparently with lots of nails and has gotten multiple flats without a spare in these new cars.
The extended warranty packages? In the moment I ended up saying yes after it got lowered from $5 something to $3 something… but the fact he was so willing to drop so much makes me realize it is likely a bad deal!
Covers 10 years and eliminates the “limited” allegedly. I have been assured I can cancel. Think I am going to.
Do you take these offers when you buy a new car? Other products? Offered often
@puzzlegal most interested in your take as these analyses are your bailiwick I think.
I don’t, they’re generally a bad bet.
Think about how hard most dealers try to sell these, they are generally a big margin for the dealership.
Bottom line is while it might help you out, the odds are very much against it. Especially these days where cars are so much more reliable.
As far as Towing & Roadside assistance, compare what they’re charging to AAA and AARP and determine the best deal. It is possible the Dealership is better, but probably not.
I don’t buy cars very often, my last new car was in 1998 and I got it from a car buying service rather than a dealer. My current car I bought used from a dealer, did not buy any of the stuff in the final pitch. He was kind of pissed because I let him go through the whole pitch without saying anything until the “no” at the end.
Most often I get these pitches for electronics. I don’t buy the extended warranties. I also think it’s not a good bet, and I hate the idea of having to keep track of that stuff.
IMO, there is no blanket answer. Whether to spend the extra $$$ on an extended service contract depends on the condition of the vehicle, its mileage and one’s driving habits. For me, the answer was a clear no…and assuming my 2018 Mini Cooper makes it through July without any problems, passing on the extended service contract will have been the right call.
Assume my shocked face. New cars no longer have spare tires? I’d read that some manufacturers were no longer including oil dipsticks in their engines, but no spares seems even worse.
As to your original question, usually no. But sometimes I’m in a corner case where risk is still low, but costs of both repairs and loss of use would be disastrous. In these cases I’ll spring for it.
I used to play the game with appliance warranty. It started when our washing machine had a problem. So I signed on to the Sears warranty program. Had to wait 30 days before it went active, so we just used a local laundromat for that month. The repair cost us nothing for a $400 electronic module and the labor, which made the annual warranty cost a wash. Also had them send someone to fix the stove, which had us money ahead at that point. The warranty language specified that if they couldn’t fix an appliance, they would pay the value of the old appliance to be put toward the new replacement. It worked out pretty well over about a two year period.
I generally don’t. Those are very profitable products. On the other hand, if you can’t afford to pay if something happens, or if you know something about yourself that they don’t (like getting a lot of nails in tires) they might be worth it to you.
In fact a much better strategy is to create your own personal extended warranty savings account and fund it every time you pass on an offered warranty. Keep a small notebook that has the item, purchase date, extended warranty cost, and warranty expiration date. Whatever the extended warranty cost make the deposit to the account.
Use for vehicles, appliances, electronics, etc. and make withdrawals only for repairs that are within the warranty period according to your notebook.
I bought a VCR once upon a time, which had a one-year warranty from the store. 13 months later it ended up crashing.
Being the cynic, I assumed that Circuit City had two piles of merchandise, one pile of good stuff for people buying the extension, and another pile with equipment they new would fail for those who opted out.
Usually not. Once I bought one on a car , but it wasn’t the typical third-party warranty. I think it was direct from the dealer and it was basically an extended warranty that included the first couple of scheduled service appointments. I looked at it as pre-paid maintenance and the price was OK for that.
Other than that, I bought extended warranties on appliances - but only when we bought from commisioned salespeople my husband knew. Because my husband had been in the business and he knew that his friend would earn more for selling the service contract and giving us the washer at a rock bottom price than he would have earned if we bought the washer at the higher price and skipped the service contract. Of course, that’s because the company made more profit on the service contract than they did on the washer.
In the other thread cited above I made the point that extended service contracts can be a good investment if picked wisely.
My bias is to get them on newish used cars. Which is what I’ve historically driven. But I would probably pass on a service contract for a brand new car.
I got a Toyota extended warranty when we bought our new RAV4 Prime pluggable hybrid, only because it has lots of new technology that can cost thousands to replace. Seemed like a good idea at the time.
I do. I consider them pre-paid repairs, and I take my car in at certain times and tell the mechanic that the goal is to find everything the warranty will cover. Until the latest car, I always come out ahead by thousands of dollars.
The latest car is likely the exception because we don’t drive anywhere near as much as we used to. Bought the car in July and still have fewer than 2,500 miles on it.
That has been my experience too. I make 100% or more return on my premium dollar. As in pay $1K of premium, get $2K of repairs / replacements.
If you have a good shop they can tell you which service contract companies are real and which are scams. And the shop loves beating money out of those contracts. After all, they make a profit on the work they do too.
Like you I’m finding that my latest car isn’t racking up miles or fixits like the prior ones have. I’ve got a lot of years left on my contract, so I may make out well with this one too, or find I’ve overpaid for what service I’ll have needed by the end. We’ll see.