Hoping I can get some input on purchasing a third-party auto warranty… I bought a 2004 Nissan Maxima privately back in January. It had an aftermarket warranty which covered it up to 100,000 miles or 12/31/10 (today), whichever comes first. I paid $50 to transfer the warranty to me when I purchased the car. I haven’t made any claims and it expires today. I contacted the warranty company about extending it and they said that technically they can’t actually extend it, I would just need to purchase a new one (meaning I don’t get a discount or anything)…
I currently have 83,000 miles on the car, they quoted me $1805.00 for a 5 year warranty and 150,000 additional miles (so it would be covered until 2016 or 233,000 miles). It has a $100 deductible and covers the engine, transmission, transfer case, differential, air conditioning, electrical and the fuel system (I won’t list every individual part covered)… I can pay a $180.05 down payment, then make 18 monthly payments of $90.25. I shopped around a little and this is by far the best deal I could find.
When I do searches online on whether auto warranties are worth it I get all sorts of answers, but mostly “It Depends”… It usually seems to depend on the price of the warranty, the type of car, how much you drive, how long you plan on keeping the car, etc… I drive about 20,000 miles a year and plan on keeping the car for a 3-4 more years (basically until I pay it off or at least pay off enough that I will walk away with some cash when I sell it).
One other point is that there seems to be an intermittent problem with the car. Every so often (always first thing in the morning), the car is a little hard to start and\or it idles really rough for a few seconds… It then seems to “catch” and runs perfectly. A few times however it wouldn’t start at all (it seems to not be getting any gas). It just cranks and cranks but doesn’t start… Each of those times I would spray a little starting fluid into the air intake, it would then ride rough like I mentioned above, “catch” and run flawlessly… I’ve brought it to a few mechanics but no one can determine the problem as it only happens once in a while… I’m thinking that maybe its the fuel pump (covered under the warranty), and that when first starting the car it is not working but after the engine runs for a few seconds (using whatever fuel was in the fuel lines) the RPMs\higher voltage get it to kick on… Just a guess as I’m not a mechanic… I was hoping that it would completely fail before the warranty expired but it doesn’t seem to be getting any worse\more frequent…
Obviously this is a decision that I have to make but I was hoping I could get some opinions\suggestions… Anything anyone could offer would be helpful, specifically if the warranty price I mentioned above is a good deal or if anyone has had the issue I mentioned…
Not answering your question, but I hate it when companies say that ‘can’t.’ The air lines can’t changed your ticket without and extra fee or the story can’t take the item back.
They can do anything they want.
The real answer is the won’t.
$1,800 is a lot of cash. They real answer is do you have enough money to buy are car when this one cost $3,000 to fix? I usually think I’m getting screwed on these things. They know their business. If they didn’t think the odds were that they’d make money on you, you wouldn’t get the offer.
These warranties are notorious for being great deals for the warranty company and bad deals for the customer. On the question of whether the warranty is worth it (i.e., will save you money to have bought it), it depends on whether the car will need over 1800 worth of repair coverage. Since this is impossible to predict, you’re in the position of having to make a decision with less information than you’d like to have. Statistically, the overwhelming majority of customers pay more for the warranty than they would have paid for repairs.
Then there’s the matter of how helpful the warranty is. I’m an auto repair professional with 35+ years in the field. I’ve seen some of these warranties that work well for the shop and customer, paying complete repair costs (less the deductible) with a minimum of hassle. I’ve also seen some that are a pain to use, posing difficulties in getting repair approval, covering a broken part but not the fluids and gaskets/seals necessary to replace it, dictating price limits, etc. I can’t tell you which are which, but be advised that sometimes customers are disappointed by the limits of coverage in actual practice.
The intermittent problems you describe have multiple potential causes. The fuel pump is among them, but certainly not the only possibility. Odds are that whatever it is won’t cost 1800 to fix. In terms of repair strategy, my suggestion would be to have it towed into the shop next time it won’t start, without doing anything to try to get it to start. This would maximize the chance that the shop can catch it in the act and track down the cause. Of course, this also means having your morning interrupted with no advance notice. Note that the poor idle and the no start might be two symptoms of one problem, or might be individual symptoms of two separate problems.
We’ve gambled twice on the extended warranty on two used vehicles, and both times they’ve paid off, by a sizable amount. My 2005 Subaru Outback needed a new transmission this year, which would have been $2000 just for the tranny alone, let alone labor. It also needed front end work (CV joint) on one side and now needs it again on the other side. A car the age of yours will start needing work, as you’ve noticed. Of course, it’s a gamble, as with any type of insurance. If your car doesn’t need any work and it doesn’t pay off for you, that’s not to say you made a bad decision or got ripped off.
Anecdotal evidence gleaned from one or two people, such as needscoffee. will torture you.
You need to make it a practice to avoid extended warranties on everything. Odds are, even paying for some repairs, you won’t be out close to what you’d have shelled out for all the TV, stereo, washer, dryer, A/C, etc warranties. Pocket that money and put it in a reserve. Most people will have a reserve that grows and grows over the years.
Consumer Reports and others recommend some extended warranty coverage on very high-end PC equipment or other cutting edge, high-end electronics (a 2011 mega-expensive digital, pro grade Nikon camera package is a nice example, because your friggin’ career is at risk, or because the odds get better [worse] for the consumer to have down time with it).
Generally, on all the crap the typical consumer buys, including auto warranties: NO.
The company expects to make money on their warranties - meaning, they expect to pay out less than you pay in. Statistically, you are better off keeping the money and paying for any repairs yourself.
Insurance is only worth it if it protects you from an event that would be financially disastrous without the insurance (e.g. your house burns down, you crash into someone’s Rolls Royce and it’s your fault, etc.) The insurance company makes money by providing you peace-of-mind. Insurance is a complete rip-off if it insures you against something that you could pay for yourself.
The question you should ask yourself is this - if you have a major problem with the car, will you be able to afford to fix it yourself? The answer is almost certainly yes. Put the $1,800 in account and use it as a “car maintenance fund”. Every time you pay for a repair that would have been covered by the warranty, pay $100 out of pocket and deduct the rest from the car maintenance fund. It is likely that you will have money left over by the time the warranty period is over. That’s the whole business model of the warranty company.
$1,800 is a lot of money for repairs on a 2004 Maxima.
As an aside - if an extended warranty company is selling warranties that seem like they’re worth it, they’re going to go out of business. They make money by selling warranties that are (statistically) not worth it. Statistically, there will be some people like needscoffee for which the warranty turns out (in hindsight) to have been worth it. There are also some people who make money in Las Vegas. But overall, the house always wins (or goes out of business).
Some people in this group have made out on warranties. Personally, I believe in self-insuring because these companies are making money selling policies. They have to spend less than they take in. I figure over a lifetime I can do the same by carefully selecting products and not purchasing warranties. I’d buy a new car without a warranty if they would give me the warranty money up front. In your case you are paying for the first $1800 in repairs up front. I just can’t do it. If you are not a risk taker of any type and must insure every step of life, go for it. Nothing else will let you sleep tight. That’s what it’s all about, being able to live with a decision.