I’d make the argument that buying a car any time in the last 20 or so years that you expected to have major repair costs within the first eight to ten years meant you were buying the wrong car.
Wonder why that is?
I know. You were just following orders. Or, in this case, processing them. And it’s no part of American business practice to deflect buyers who really can’t afford the product that’s being sold except in the technical sense of qualifying for enough credit at that moment.
When we bought our car, the dealer said one of the benefits to them was that if we need a warranty repair, it gets us into their repair shop. I was watching, and his lips were moving, but at least that was plausible as justification for how it could be a reasonable deal for both of us. (We didn’t buy it though.)
Interesting that my dealer didn’t offer that one … hmmm:dubious:
Thanks for all of the tips. I don’t think I’ve ever bought an EW before on anything and, as I said, the fancy schmancy electronics that were new to me had me wondering from the very beginning.
I don’t need the peace of mind but, economically, capping my repair cost at $200 a year for 10 years and being able to sell that to a subsequent buyer still has it’s appeals. I have come to realize, however, that the math doesn’t work out that way. Dealing with the fine print down the road is also a negative.
Thanks again!
Don’t think of it like that. You are not capping your repair costs at $200/year.
Wear and tear repairs are never covered and are likely to be the bulk of your repair costs over the years.
I strongly suspect trying to get the extended warranty to pay for repairs would be an exercise in futility. If there are any reputable extended warranty companies I don’t know who they are.
I got an extended warranty (“Platinum” coverage, whatever that means–$1500) on my Mazda3 and never used it. Per the terms of the contract, I’m supposed to get that money back when the term expires, which is next week. We’ll see how that works out.
Best thing to do with extended warranties on anything is to pass on the warranty and put that same amount of money into a savings account. On every purchase you make that offers you an extended warranty.
New car, stick $2000 into that savings account.
New appliances, stick $200 per appliance in that account.
New laptop, stick $300 into that account.
Use that account as your insurance money for anything that breaks. You’ll find yourself ahead in no time at all.
Yes, good question. Some quick Googling found a page on the Edmunds forum where a couple of people said either their dealer didn’t offer the Honda Care coverage, or only offered it once the buyer declined the dealer’s offered coverage (i.e. 3rd party). So I’m guessing both higher commissions on those 3rd party warranties, plus Honda didn’t enforce sales of Honda Care through their franchising agreements.
Remember also that you are paying finance charges etc. on the warranty - a not inconsiderable sum over 48-72 months. (I would bet that few cash buyers and not many more who can afford short-term loans feel any need for the extended warranty.)
All cars sold in the US have a federally mandated emissions warranty that would cover the catalytic converter for 8 years or 80k miles. you don’t specify but it doesn’t sound like you were passed that point.
I don’t like the whole idea of keeping a new car past the factory warranty in general, but obviously, if extended warranties were such good deals they wouldn’t need to try to sell them so hard.
However there are cars out there that are so notoriously unreliable that most extended warranty companies won’t cover them, i.e. any Jaguar/Land Rover product, and in this case if you can find some company that will actually cover them you will usually win out. Here’s an example of someone taking advantage of Carmax’s extended warranty to good effect. Granted this is a bit of a special case and you have to take into account that a) Carmax cars are usually a bit more expensive to start with, and b) You’re using dealership service prices where as a more price sensitive owner would probably have shopped around a bit more.
It works for a lot of higher end European cars, especially some oddball ones that were hotted up (and usually much less reliable) versions of more mundane models that were more reliable, but didn’t sell enough to show up statistically. I’ve read a few accounts of people with W8 Passats and supercharged E55 AMGs who have paid for their extended warranties pretty much within 6 months of purchasing them and continue to profit for years after.
Totally not worth it. They sold it to me as a 6 year policy at $2k. I thought, about 300 a year is not bad. Actually, it’s a 2 year extension on a 4 year warranty, or 1k a year. I don’t pay 1k a year on my regular insurance.
What kind of warranties do you sell at your dealership?
Funny I’m a service manager at a car dealer and I get payments on extended warranty claims all the time.
There are in my experience three levels of EW
Insurance (and a warranty is a type of insurance) is for reducing risk, and on average, it increases cost. If your bank account can handle the worst-case scenario (e.g. a car that spontaneously turns to dust when you drive it off the lot), then statistically you’re better off not buying insurance/warranties.
Note that even the original manufacturer’s warranty isn’t free. Everyone’s purchase price for a new car is higher because the manufacturer has promised to fix anything that goes wrong in the first few years, free of charge. It’s nice peace of mind for all the buyers, but since things rarely go seriously wrong during the warranty period, statistically we would all be better off with no warranty at all, and a purchase price that’s somewhat lower than it is now.
Homeowner’s insurance is a good example of a situation where most folks’ bank accounts can NOT handle the worst-case scenario (i.e. the house burns to the ground), and so insurance is advisable.
Health insurance is somewhat different in that insurers use their leverage to obtain services/products at prices that you can’t get without insurance - so this is a case where insurance really is advisable, even if you’re rich enough to pay cash for your own heart transplant.
But car insurance? Warranties? Go as cheap as you can. Skip the warranties, and go with the highest deductible you can on insurance. Once in a while you’ll get stung, but over a lifetime, you will almost certainly save money.
As other people have said, you are better off setting aside the cost of the warranty in savings in case the car breaks down. With most (all?) warranties, there are things they will and will not cover, depending on circumstances. Not only would a warranty be a waste to spend on if you never end up using it, it would also be a waste if you bought an extended warranty and when your car breaks it turns out the fine print in the warranty states your specific circumstance is NOT covered.
Sure there might be warranties that cover anything that happens to the car, but at that point I feel like you might as well be buying a backup car to have on hand in case the main car breaks (also redundant 
). Just save your money.
Along the lines of buying cars at a dealership, when I bought my first new car I negotiated the price online/over the phone; at the dealership it only took about an hour total, and I politely declined all the scammy offers. I never understood why people like my mom would be stuck there for 6+ hours having a stressfull fight with the dealer. Maybe I’m more assertive? 
It’s a down payment on the dealer’s new boat.
As others have said, there’s a reason they push extended warranties so hard. They’re very profitable for the vendor, hence not a great deal for you.
My sticking point is that there is always fine print, policies, stipulations and the like, as well as bureaucratic hassle along the way. I don’t want to have to worry about not getting a repair paid for because I didn’t go through all the hoops, like I’m missing an oil change receipt or something. I don’t want to have to fight with the company over what constitutes normal wear and I don’t want to have to wait around for their approved service to do it. End of the day, I’d rather take the $2k I’d save, put it in an account myself, and deal with repairs how I want to – using the service people I choose, when I choose, where I choose.
Plus, the whole point of buying a Honda (which I exclusively buy) is because they’re very reliable cars. I just traded in my 2005 Honda Element (bought new) and I never had to repair a damn thing.
You only buy the extended warranty if having the thing gives you peace of mind.
I did get an extended warranty on a 2001 Isuzu Rodeo that we purchased as our first baby-mobile. That warranty paid for three transmissions on that POS. Money well spent.
At first I said no to the extended warranty, but somehow I ended up with 6 yrs/ 100,000 miles. I went back 2 days later and canceled it. The relief was unbelievable. When I went in to get rid of it, I felt a bit cornered though. 3 guys telling me that the natural gas civic has special parts and it’ll be expensive to fix (if it breaks). Blah blah blah. It’s a brand new car!!! I wish I could have just stuck to it the first time around, but I’m glad I stood my ground the second time around.
You guys could just buy Hyundais and get 10 years/100,000 miles included (on the powertrain, anyway.)