Ever bought an extended warranty for vehicle?

In My Humble Opinion
21

Depends on your personal financial situation, doesn’t it?

Right now, I couldn’t “throw a few grand in savings” if my life depended on it–it’s just not there to be had. It was at one point in my life, and it will be again, but for right now, any major unexpected expense means whipping out the plastic. For some of the people I know, any major unexpected car repair means parking the car in the driveway and begging rides for weeks or months. A warranty costs a chunk, but it is a predictable and therefore budgetable expense.

As noted, you pay insurance to cover the things that you can’t cover on your own. Whether car repairs fit into that category is something each person has to decide for themselves, based on their own finances.

22

I bought after-market extended warranty on my 2006 Ford van, and I’ve the transmission replaced for just a $100 deductible. The difference is not yet as much as the plan had cost, but it hasn’t run out yet. And paying $150 over 20 months was way more affordable than the $2000+ it would have cost me in one shot to get the transmission fixed, since I’m sure I wouldn’t have been putting that money into a rainy day savings account.

Basically, I’m happy with mine.

23

I buy them and use the hell out of 'em. Not so much anymore, when cars are now actually designed to last, but haven’t had an extended auto warranty that I ever lost money on.

This last month, my truck was at 124,850 on a 125,000 extended warranty. Got $2.8k worth of repairs, paid $300 deductible, making the overall cost on the warranty:

$900 - buy it
$600 - two deductibles

And I got $4,800 in repairs on it.

But, again, you have to know what it covers and it helps to have a friendly mechanic who is an expert at getting value out of the things.

24

Don’t buy an extended warranty, unless the automobile in question is a Jeep Wrangler.

25

I don’t remember buying the extended warranty on my 2011 Equinox (3yr, 36k miles standard warranty). I am sooooo glad I did! It covered about $4-5k in service before I hit the 5 year mark. That extended warranty allows me to continue to love my car, and not spend money buying a new car.

26

I recently bought a new Subaru and had the same exact weird experience. All the talk during the test drive etc. was how durable and reliable Subarus are and how people love them to death, then the finance guy starts in with how delicate and expensive the electronics are, and basically if I didn’t take the extended warranty the whole thing would fall apart if I sneezed on it.

I did buy the warranty, mainly because it’s for 6 years or 60K miles. I don’t drive all that much, it’s a 5 year payment plan, and cars are spiteful monsters that like to spectacularly konk out on you five minutes after you’ve made the last payment. I figure it bought me an extra year of peace of mind.

27

Never. In my lifetime I’ve bought 5 new cars and 2 new motorcycles.

I would only consider it if I was going to buy a particularly problem-prone car. It turns out that the car I drive now was a lemon law replacement when my last car was bought back by the manufacturer. I got the exact same car, 2 years newer. Still, never an extended warranty. They are generally bad deals.

28

YES! And, my God, has it paid off! I’ve saved much more than the cost of the policy!

That certainly won’t be true for everyone, but, wow, it was one of the best damn investments I’ve ever made.

29

A catalytic converter is a “major emission control component” and is required to have an 8 year / 80,000 mile warranty (parts and labor). EPA cite (expand the first item, “What is the federally mandated warranty for emission controls on my car?”)

The insurer is planning on making an overall profit from all of their policies. Purchasers are betting that they will receive more in benefits than they pay in premiums. For the majority of policyholders, that won’t be the case. For a small number of policyholders, it will.

Modern cars have incredibly complicated, inter-related components. They sometimes break and can be very expensive to diagnose, particularly if the situation devolves into “throw parts at it and see if it gets better”.

However… if you aren’t planning on keeping the car much past the end of the factory warranty it simply doesn’t matter. There are people who use that as one of the reasons for buying a new car - they trade it in to the dealer just before the warranty is up, the dealer runs it through the certified pre-owned program and sells it for a good deal over the trade-in, and the buyer walks out with a new car. Of course, neither trading in to the dealer nor selling after the bulk of the depreciation has happened are a particularly good idea.

It also depends a bit on the car and what out-of-warranty services costs are like - an extended warranty is probably of greater benefit on a Ferrari vs. a Hyundai (just based on price / benefit, not saying anything about reliability here).

All of the above is about factory extended warranties - the aftermarket warranties have lots of exclusions and can be a hassle to deal with - do you have to pay for that new transmission out-of-pocket and wait to be reimbursed, for example. And a factory warranty will generally provide factory-branded parts, while an aftermarket one may use the least-expensive brand that works. A good factory extended warranty should ideally be the same as the new car warranty, but will probably be more like the certified pre-owned warranty. In many cases you can buy the factory extended warranty from any dealer for that brand, any time before the factory warranty ends. By waiting, you’ll have a better idea how reliable your specific car is - if it’s in the shop all the time, you probably don’t want to keep the car after the warranty ends, anyway.

30

Never owned a new car. None of the used ones would qualify or be worth it.

Quite So! :smiley: Or maybe a Jaguar.

31

You are the fortunate one! But how many others paid their premiums and did not need to file a claim that allowed you to benefit from your claim? At least dozens of others, and likely hundreds if not thousands.

There’s a reason why insurance buildings are large and stately. Yes they are designed to connote a sense of strength and stability to give confidence to their customers, but those thousands and millions of no-claim policies funded those buildings, and the salaries of their employees.

It’s the nature of the business. It’s probabilities and statistics. It’s likelihoods and outcomes.

32

What a range of responses, though it seems the prevailing notion is they’re probably not worth it with a later model car as cars are better built now than they once were (perhaps excluding Jeep Wranglers, ReticulatingSplines?!).

Given all I’ve read here, I like the idea of having a dedicated savings account in anticipation of large-ish repair bills more than the prospect of getting a warranty that really is just a different kind of insurance policy. Thanks for the replies, all!

33

Have fun with your covertible! Sounds like an enjoyable car. And I wish you good mechanical and car luck too.

34

I bought the warranty when I bought a car with a manual transmission, because I figured the odds were good I’d kill the clutch at some point. That little car turned out to be the most reliable machine I’ve ever owned. I drove it for 10 years without a single problem, and my son is driving it now.

35

I second this recommendation. Steve Lehto is an attorney specializing in automotive law, and his podcasts have some really good advice related to car buying and finance.

Would a typical warranty cover a clutch anyway? Surely burning through the clutch would, in most cases, qualify as normal wear and tear? Warranties don’t cover worn-down brake pads either.

On the more general topic, some of my own reading suggests that one area where extended or aftermarket warranties might be worth a shot is with high-strung or semi-exotic cars, especially ones that might fail in a critical and expensive area. Writers on Jalopnik have detailed their positive experiences with warranties on cars like:

Aston Martin V8 Vantage
BMW M3
BMW M5
Range Rover

36

I bought a used 1985 Chevy Caprice Classic wagon. It was gold colored. :smiley:

I got it from a new/ used Chevy dealer in Hicksville, NY back in the day. ( About…hmm…1988 IIRC ). It had, I dunno, about 20,000 miles on it. I purchased a bumper to bumper used car extended warranty that covered the drive train, etc. Went to 100,000 miles.

With less than 1,500 miles to go, the tranny died. I had the car towed to Aamco. They called the warranty issuer who immediately denied the claim. I was mighty pissed off. I insisted they send a claims adjuster in. Within a few days, a guy showed up who was based in Albany and was nothing except rude, abusive, doubtful, accusatory, etc. Said this would take no time at all to prove I’d tried to scam the insurance company out of a new tranny by pouring screws and bolts into the transmission fluid intake port, thus demolishing the transmission. Saw it all the time, etc.

I insisted on being IN the room when the casing was opened up. They removed the transmission from the car and sat it there the next morning. I watched them remove the bolts, with this guy still being every inch the triumphant dick.

Of course, I’d done no sabotage. At all.

When the casing was opened up and no foreign debris was found, what was found was one of the rotating elements of the transmission had cracked and flew apart at high speed and pieces were rapidly ground up into metal filings and bits. (That’s what turned the transmission fluid from that lovely clear red to a deep silvery gray ).

The guy stared at the casing and evidence. Wrote furiously on his clipboard. For quite a while. Shot a roll of film on his camera. Tore off a carbon page from the form he was writing on, turned and handed it to me and said, " you may be the only person I’ve ever met who was this close to expiration on a warranty who HADN’T dumped crap into his tranny. "

He informed the Aamco guy that he was authorizing a new ( rebuilt ) transmission.

So, IMHO, an extended warranty is worth EVERYTHING.

37

No.

38

Same here. I’ve always bought used cars for cash. I’ve never even purchased collision insurance - only liability.

39

As with so many things, look at the history of the product.

I never heard of these 3rd party policies until the early 80’s.

If they are worth anything, why didn’t they evolve with the original policies?

Every time I’m offered one, I just smile and say “No thanks, I know those are 100% profit”.
i almost always get a sheepish grin and a change of topic.

I bought a new, upper-end car in 1987.
The salesman would not shut up about the great value of the crap.
I finally looked him square in the eye and said “I have said no. If you mention it again, I will walk”.
He started to counter, then decided that the straight commission was better than no commission.

The only other product of such obvious fraud was a shoe salesman who put some foam insoles - the 1/8" thick 90% air, will fall apart in 15 minutes, foam.

“Nice. How much?” “Only $20”.

For $20, I can go to a retail drug store and by Dr. Scholl product.

That was all in getting the crap into the shoe without letting the mark see what it is.
Your extended warranty on a car is done by comparing it to a real warranty without letting the mark know that it covers absolutely nothing.

The 3rd version is a “Home Warranty” on a house sale.
I was given one on my first house. The water heater died a few months in.
I called around looking for a plumber who would accept the warranty - “not after not being paid for last 7 jobs”.
Warrantys can be profitable if all you do is take payment and never provide repair.

40

You never heard of a manufacturer’s warranty that lasted 100,000 miles back in the day, either. In the 1960s, plenty of cars were manufactured with odometers that would not even read past 99,999 miles, because the average car wasn’t really expected to last that long. Moreover, back then shade-tree mechanics could repair practically anything on the car. Now, cars have a lot more stuff that can go wrong, and it’s a lot more complicated.

So you’ve got two trends in parallel: cars are better-built, so people expect them (and need them) to last longer, but when something does goes wrong, your brother-in-law with the box of wrenches isn’t going to be able to repair it–the car will likely need to be hooked up to a ($$$) diagnostic computer even to figure out what the problem is. That’s a recipe for different kinds of responses to evolve, and one of those responses is extended warranties.

As has been noted, those are essentially insurance policies to cover expensive repairs. If you’re in a position to pay for those repairs out-of-pocket, you probably don’t need an extended warranty; if your financial position is different, they can be a tremendous asset even if you never need to use them.

Data point: my next-door neighbor purchased a home warranty when she bought the place. She LOVED it, and thought it was one of the best financial decisions she’d made. With her plan, she never had to call around looking for a plumber; she called the warranty company, and they found somebody to send out. She probably only broke even on the plan over the years she lived there, but she knew exactly how much to budget for home repairs each month, and never had one of those “OMG, the furnace needs replacing only two months after the water line broke” moments when she would have had to come up with thousands of dollars on the fly, and in her financial situation that was worth it. YMMV.