Extended Warranty Story

[Like2Plan]

If you really insist on getting a warranty, keep in mind that you don't have to buy it from the dealer. You can get an after-market warranty from AAA and other companies that offer better rates than the dealers.

You have to be careful with the aftermarket option, too. The ones I have compared are less expensive, but the coverage is not the same. Another disadvantage is you have to pay for the repair upfront and then they reimburse you.

[Snave]

April 2008 Consumer Reports did a piece on extended warranties for new cars (am re-reading it before I type this). It was a survey of 8,000 readers and 65% did not get their money back out of the warranty. The responders said their warranties cost $1000 on average and they got $700 on average savings with their warranty. The real problem was that 42% of respondents did not use the warranty at all. 1 in 5 said they broke even. So if I do my math correctly, 65% + 20% (1 in 5) = 85%. Therefore, only 15% actually got a good deal out of the warranty and saved themselves money. Overall only 38% said they were satisfied with their purchase. They went on to say those that were satisfied also noted in the survey which cars they had. Most had cars that were rated as more unreliable to begin with (the article said Pontiac and Jeep - just reporting what it says so don't shoot the messenger if you have a Solsitice or Wrangler you love). With that being said, I did buy an extended warranty for my last car for 100,000 miles. However, I got it for $750 dollars. I actually used this info to tell them that on average $700 was the break-even point. and I knew the price was jacked up. The warranties don't cost all that much, it is the several hundred dollars the dealers tack on that makes up the price.

[disneysteve]

only 15% actually got a good deal out of the warranty and saved themselves money. Overall only 38% said they were satisfied with their purchase.

With that being said, I did buy an extended warranty for my last car for 100,000 miles. However, I got it for $750 dollars. I actually used this info to tell them that on average $700 was the break-even point. and I knew the price was jacked up. The warranties don't cost all that much, it is the several hundred dollars the dealers tack on that makes up the price.

Interesting that only 15% came out ahead but 38% were satisfied. Makes you wonder if they were paying attention at all.

Despite my several posts against extended warranties, I agree with you on the price. There is a point at which an extended warranty is a good deal. You just need to talk the price down far enough. When we bought our Sienna, they offered us the extended warranty for $1,200. I, of course, said no. So they dropped the price a bit. I still said no. Again the price dropped and I looked a little closer at the list of what was covered, but still said no. Finally, they dropped the price to $600. At that point, I figured we'd at least break even so I did take the warranty. Honestly, I never sat down and calculated how we made out. One of these days, I'll have to review my service records and see how we did. I'm reasonably certain we did okay.

There were only two reasons I considered the warranty. One, we were buying used so you never quite know what you're getting and two, they dropped the price far enough to make it appealing.

[Merch]

I have a used BMW 530. When I bought it, it came with a warranty of 100k or 5 years from when I bought it.

Of course the yearly maintenance is a little pricey.

I have never paid for an extended warranty, but a $750 - $1,000, you should be able to get the dealer to throw it in for free.

[Snave]

Interesting that only 15% came out ahead but 38% were satisfied. Makes you wonder if they were paying attention at all.

I thought the same thing, but then looked and saw that 20% came out even, so I assume they all probably voted "satisfied" also. So, only 3% were clueless.

[disneysteve]

I thought the same thing, but then looked and saw that 20% came out even, so I assume they all probably voted "satisfied" also. So, only 3% were clueless.

I suppose 3% might have come out close enough to even that they felt the peace of mind of having the coverage was worth what it had cost them. Insurance is never really a good deal unless you have the misfortune of having to use it. I would say I'm satisfied with my life insurance even though I hope to never have the policy pay out a penny in benefits.

[maat55]

I have bought only one warranty and so happened it paid for a transmission. But I would never buy another one. If you have an EF, why not add the warranty money to your EF. You will win in the long run evertime.