My wife after a great deal of research purchased a new 2007 TL with an S package today. The finance manager told us the importance of getting an extended warranty on the car.
We declined because:
We did not know whether a well made Japanese car would “require” an extended warranty
I would love to have your opinions whether an extended warranty…bumper to bumper coverage should be obtained…pros and cons.
I can still order it from the dealer or look somewhere else if you people think its a good idea.
Of course they did. Not surprising coming from the finance manager. My opinion of them is that they’re a waste of money. My take on it is this, invest the money you would have otherwise donated to the extended warranty in bonds, CD’S, etc…, and at the end of the original warranty, use this money for needed repairs with no upfront ripoff deductables. It no repairs are needed, well, you still have your money. The TL is above average in reliability. Soon after the factory warranty runs out, you’ll likely sail through the extended warranty period without having to do much to it at all, if you’ve taken care of the vehicle.
I’m not saying what to do, the above is just what I would do.
Moderator’s Note: Hey, what’s it gonna take to get you into our new top of the line IMHO forum? I’ll throw in seat warmers and power cupholders for no extra charge!
Take the money you would have spent on the extended warranty and purchase lottery tickets instead. It’s got a better payback. Extended warranties are a sucker bet.
Seriously, why do you think they sell the extended warranties? It’s because they typically pay out substantially less than they cost. It’s a profit thing, get it?
If you always refuse to buy the extended warranty you will occasionally get bitten in the ass, but the vast majority of the time you’ll walk away with money in your pocket.
If you always buy the extended warranty you’ll be covered for the rare events when it would have protected you, but you’ll have spent far more than the payback.
If you buy the extended warranty only part of the time, you’ll invariably guess wrong, and warranty the things that never fail, and have no coverage on the ones that do.
In the UK a few years back, the consumer organisation they have over there was against it. Their view was that if something major was going to go wrong with the car it would happen within the first 12 months.
I have mixed feelings about extended warranties.
I have installed many a transmission, engine or other major component that were paid for by an extended warranty. Spending $1,000 for a warranty and getting a $3000 transmission replaced for $100 can seem like a very good deal.
On the other hand, there often many serious exclusions, and hoops that have to be jumped through for the car owner. In general it is my feeling that marketed by the car company themselves (not just sold by the dealer, he can sell anything.) are a better buy and more comprehensive than most aftermarket warranties.
Cicero In America car maker’s warranties tend to last from 3-10 years. The warranty will usually be a stepped type, for example:
First 6 months =all adjustments and everything else
AFter the first 6 months and up to first 12mo/12,000 miles no adjustments, full coverage for everything
after 12/12 up to 36/36 (48/50 60/75 120/120 etc) major item coverage, sometime subject to deductibles. Often subject to exclusions
Extended warranties pick up where the car maker’s warranty leaves off.
Speaking as a guy that fixes cars for a living anyone that says the likelihood of a major failure in a car is highest in the first 12 mo / 12,000 miles does not know jack shit about cars, and what happens to them IMHO.
For electronics I would tend to agree with that statement, as infanticide is a well known issue with electronics and after the first several months, electronics tend to live forever it seems. Cars are not like that.
I have a 1997 Acura Integra. The only thing that I have had to do to it has been normal maintenance. Replace the breaks, change the oil, new tires, etc. It has 150,000 miles on it.
Extended warranty sales are a high-profit sideline for car dealers.
Consumer agencies consistently deem them a bad buy. Essentially, they’re a significantly overpriced form of insurance.
The odds of its getting used on an Acura are quite low.
In operation, there are good ones and bad ones. The good ones approve reasonable repair prices, and cover the whole job, including necessary diagnostic testing. The bad ones have stringent limits on what they pay the shop and often don’t cover necessary auxiliary items like gaskets and fluids. With these, if you deal with a shop that refuses to be underpaid, you end up paying noticeably more than the deductible. Unfortunately, it’s difficult to find out which companies are which.
It’s a small calculated risk, but by any statistical measure you’re way ahead to forgo the extended warranty.
You don’t have to decide right away, either. What is the normal warranty? Many cars are coming with longer manufacturers warranties and you have the option at the end of that time to purchase an additional extended warranty. Don’t let anyone force you into deciding on one now.
…Perhaps a wrong choice of word…IMHO the poorer made automobile with a high percentage of repairs might “require” or smart-to-get an extended warranty.
Purpose of my OP was to learn from my SDMB members the pros and cons of an extended warranty…I am very appreciative of the responses to my question.
When I bought my new car, some years ago, everyone I knew advised against buying the extended warranty. But for some reason I just thought it would be a good thing to do. Hey, I was already financing the thing, and the extended warranty was only $900 more…so I threw my frugal nature to the winds and did it anyway.
I am SO glad I did. I took my car to a place to have the oil changed, just after the original warranty expired. The nearest dealership was 80 miles away at the time, and it was a bit difficult to find the time to take it down there. And [sub]I STILL can’t believe this[/sub] they apparently forgot to put oil back in after they took out the old stuff. According to the dealer, anyway. After my engine got totally ruined and they had to put a new one in.[sub]I’m still not so sure that the other place forgot to put oil back in. I think there might have been something wrong in there somewhere.[/sub] But whatever, I got a new engine. Which would have cost me somewhere along the lines of $4000…IIRC. So that was $900 well spent. And yes, it is a very good car, I researched it thoroughly before I bought it. No reason to think I was ever going to have a problem. And my car is still in very good shape. I’ll probably be able to drive it until I die. That’s my plan, anyway. [sub]I DID mention my frugal nature?[/sub]
It was the best $900 I ever spent. In hindsight.
I guess my response to the finance manager would be: “Is the car so poorly made that I’m likely to need it? Perhap I should look elsewhere.” Just to watch him weasel out of that one.
Extended warranties are a waste of money…unless you happen to wind up needing one.
Our last car came with a factory warranty of 4 years/50,000 miles. We purchased the 7 year/100,000 mile extended warranty (we got a great year-end close-out deal, which made it an easy decision). We wound up needing a new engine at about 59,000 miles; instead of costing several thousand dollars that we didn’t have, it cost us the $100 deductible.
An extended warranty is like any other insurance policy. If you need to make use of it, it was money well spent. If you don’t, it was money down the drain. The question is a matter of how much money you have to spend, and how much peace of mind you want to have.
The extended warranty would have been a waste of money. The Honda C-motor, the 6-speed (UX6?) manual transmission, and the SH-AWD driveline are all proven components and unlikely to have any problems.
