Extended Warranties... yeah or nay?

woodchucker

woodchucker

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woodchucker
Looking to buy a new Sentra for the wife.

The only person I heard say they wish that they had purchased an extended warranty was because her engine went poof.

So, are they largely scams?
 
In my experience when you buy new the factory warranty covers well and the extended warranty people will come out of the woodwork in couple years and you can get it then.
 
I never pay extra money for a warranty. They are not selling them because they want to satisfy you, they're doing it because they make a lot of money on them. You would be far better if you took everything they asked you to pay for a warranty and put it away in a separate account to pay for your own warranty.

Besides, if it breaks that quickly do you really want another one?
 
We opted out of the extended warranty. I didn't care if they brought it down from $2,200 to a one-time low, low price of $1,700. I was fine with the 1-year, 12,000 mile bumpa da bumpa and 10-year, 100,000 mile powertrain that came with the car.

I'm still mad at her for nagging me so much that we overpaid for the stupid thing. Whatever.
 
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The only thing I might buy an extended warranty for would be a German car. In my experience with two new and one used, is that they are the most unreliable and expensive to maintain cars made.

Wait, I also bought two 914s new in 71 and 74. They weren't so bad, just expensive.
 
I had one on my first convertible, seemed a little more like an insurance policy than a warranty. Didn't use it for anything.

I wish I'd had one on the current convertible. I'm about to plunk down another couple AMUs to fix the damn thing.
 
Prolly the highest mark-up margin of anything at the stealership.

We bought a new Toyota, which is remarkably reliable and they wanted ~$2k for the extended warrantee. By the time we were done getting out the door the price was down to a mere $900. I told them I would pay $450 for it, and they actually went back and chatted it over, and came back with $600. I still said no.

This car was for an active student, with no experience in car repairs. It's run flawless since we got it.
 
Depends greatly on the car. I bought one on a used Maxima. Paid ~$3000 for 3 years unlimited mileage. Used ~$1600 for one tow and diagnostics work plus a few sensors. Obviously lost out there.

Now I have a 2006 Mini Cooper S convertible. Bought it from Carmax in March of 2012 with 23K miles on it. Bought the 3 year Maxcare warranty for $3600. in the three years, they covered 1) clutch and related bearings, 2) two passenger seat pressure sensors (air bag & seat belt), 3) a new computer, 4) supercharger gasket set. Something north of $6500 worth. So as this warranty was to expire I went shopping for a new one. Can't extend the max care so I wound up with a Car Chex warranty. 5 years, 60K miles. It will take me to 115K miles and is transferable if I sell the car. Since then I've had the serpentine belt idler pulley and harmonic damper replaced. Cost the warranty company $1100.

These prices seem really high until you 1) price Mini parts, 2) look under the hood. Almost any work requires major disassembly. I swear there's not room for a spare pair of socks under that hood.

The car is an absolute blast to drive but there's no way I would own it without a warranty. It's the first car I've ever owned where I believed that.

John

Edit for slepping rrors.
 
If I bought my old A4 at a dealership, you can bet I'd be looking into warranties.

I loved the car, but it was only unreliable if you neglected and abused the thing.
 
docmirror said:
Prolly the highest mark-up margin of anything at the stealership.

We bought a new Toyota, ...
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Good brand name though. I was looking at Corollas/Camry's first, but decided that Nissan is a fairly reliable brand for thousands less on the comparable Toyota.

I drive a '98 Pathfinder, just getting to the 200K mark. The maintenance is just now starting to make it untenable to hold on to.
 
If you never get one, the amount of money you eventually will pay to repair/replace that item will still be less than you saved.

There are a few situations where they make sense but for 90% of people 90% of the time or something close to that its just handing someone money for nothing. That's why it's such a profitable business.
 
I bought an extended warranty for my Lexus - I'm now rolling into my 5th year of ownership (last year of the extended warranty) and I have used it exactly once, for a faulty tire pressure gauge. In contrast, my last car - a Mercedes - started to act up real quick once the factory warranty expired. And those suckers are expensive to repair.

So I guess the answer is 'do you feel lucky, punk?'
 
bflynn said:
I never pay extra money for a warranty. They are not selling them because they want to satisfy you, they're doing it because they make a lot of money on them. You would be far better if you took everything they asked you to pay for a warranty and put it away in a separate account to pay for your own warranty.

Besides, if it breaks that quickly do you really want another one?
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Like a reserve account for your vehicles. Not a bad idea.
 
Thanks guys. It's been a loooooong time since I've bought a new vehicle (1997). So it's nice to hear opinions. I tend to agree that it is probably worth it on the German/exotic cars. VW, BMW, Mercedes, etc.

I'll prolly go ahead and skip it for a Sentra.
 
woodchucker said:
I drive a '98 Pathfinder, just getting to the 200K mark. The maintenance is just now starting to make it untenable to hold on to.
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I, too, drive a '98 Pathfinder. It has turned me on to Japanese reliability. Absolutely no complaints. 135k on the odometer.

The gas mileage does suck.

Thinking about trading for an Infiniti G37S + cash. The gas mileage is similar suckage, but it would be a lot more enjoyable.
 
I bought one on my Dodge Ram with the Cummins because I knew diesels weren't cheap to fix. Supposed to cover everything including injectors etc (yes I read the covered items). Meanwhile Dodge offered a standard 100k on the Cummins and attached components. Like many Dodge owners I fell victim to the Cummins injector issues. Efforts to get Dodge to cover it were fruitless. I had an epiphany and tried to get the extended warranty to cover it. No dice. They told me that since it was still technically covered by Dodge (even though they refused) it wasn't covered by them as they were secondary on any double covered item. I pointed out that this meant that many of their covered items would NEVER be covered using that logic because their warranty and cummins' would expire at the same time, and that they were thus claiming to cover items that would never be covered. He said I needed to take that up with Dodge.

As an added bonus I found out that many extended warranty companies will simply refund your money and cancel the warranty of a covered repair will exceed what you paid for the warranty.

In short, extended warranties are nothing more than a way to fleece buyers and make commissions for finance guys and salespeople.
 
woodchucker said:
Good brand name though. I was looking at Corollas/Camry's first, but decided that Nissan is a fairly reliable brand for thousands less on the comparable Toyota.

I drive a '98 Pathfinder, just getting to the 200K mark. The maintenance is just now starting to make it untenable to hold on to.
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Nissan does not offer a hybrid product to compete. We did the time value of money calcs on 240k miles and 20 years, also on 200k miles and 25 years. Considering the residual value of the car as $1000 at the end of life and the Toyota Prius C won out over the Versa hatchback similarly equipped when gas was at ~$3/gal. Since the price of gas has gone down some since then(who coulda figured?), I'm guessing they will be pretty close now. We also estimated one hybrid batt repl at mid-life, done by me and my kid. They seem to be averaging around 9-11 years on the traction battery but if it's less, we'll be behind. If the price of gas goes back up over $3, we'll be ahead.

More important, she really liked the Toyota over the Versa. I have a Durango with 240k, Dodge truck with 197k, Focus 212k, and Porsche 147k. We drive cars and maintain them for a long time.
 
they sell them b/c overall they make a profit which means in most cases it's a money loser for you. Your car comes with a 3yr/36 or 50 warranty. I'd decide at the end of the factory warranty if you think you'll keep the car. Believe me, you will be inundated with phone calls trying to sell you a warranty starting your 2nd year.
 
Any modern car should be expected to make it at least 5years/100k miles without anything much beyond oil changes and brake/tire service really....as a minimum standard. Most of them go farther than that by quite a bit.
 
Read the fine print.

Chrysler is starting to catch some heat because they dont (or at least didnt several years ago) provide extended warranty paperwork. So if you didnt ask to read it or see it, the dealer conveniently forgot to mention that at the 5 year mark you needed to bring it in for a warranty inspection, and you didnt, well the warranty is now void. No refunds.

There's a slow storm building now as people are hitting that 5-6 year mark and being told they had to bring their car in and being told that they cant see the warranty paperwork and that they are no longer covered
 
I always say no, with one exception: my most recent truck purchase. I knew going in that I was going to beat the crap outta that truck in hauling and long distance driving.

The truck was already out of factory warranty, so I figured the $700 was worth adding more time to it.

I have never said yes before, and never had a problem. We'll see what happens with this one.
 
woodchucker said:
Thanks guys. It's been a loooooong time since I've bought a new vehicle (1997). So it's nice to hear opinions. I tend to agree that it is probably worth it on the German/exotic cars. VW, BMW, Mercedes, etc.

I'll prolly go ahead and skip it for a Sentra.
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Now on the other hand and a big topic swerve - I'd also say don't buy a new car. Buy a used one and pay cash.

there might not be time - but you should continue to make car "payments" to yourself every month and put the money away in a separate account until you've saved enough to buy something - some car. When it's time to buy a car, go pay cash and ask for a deep discount.
 
They are all scams as far as I'm concerned. When I bought a new water heater two years ago I looked at the lineup at Lowes. They had heaters for $400, $600 and $800. Upon closer examination they all appeared to be the same product, the only difference being the length of the warranty. I came to this conclusion based not only on the fact that they looked identical but also they all three weighed the exact same amount.

So basically you're paying up front for something you may never need. Triple A is the same thing, you're paying for a tow up front whether you're going to need it or not. May as well just pay on an as needed basis. I've only needed a tow truck twice in the past 25 years, Triple A would have cost me what, about three grand for two hundred dollars worth of tows?
 
Extended warranties are just like any other insurance, you may or may not need it. On something as simple as a Sentra, I wouldn't be as concerned about getting a warranty, but if you do insist on a NISSAN warranty, not an aftermarket one. You can shop the price on the warranty just like the car. ;)
With all the electronics and gadgets on some cars, I think it would be wise to consider, but to each his own. :D
 
Car reliability looks a little low, but most typical issues overed by power train warranty. Beyond 120k I would think about selling it. http://tradeinqualityindex.com/vehicles/Nissan_Sentra.html

My experience I had with a 2001 Sentra was very good. Ate a few O2 sensors and that was it. Clutch lasted more than 90k. Parts are reasonably priced and plentiful. Just do a real good walk around and drive and get the dealer to commit in writing to fix the squawks, before taking it home. The assembly quality varies.
 
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A little off topic, but one exception to no way on extended warranties for me is that I buy Apple Care for the iPhones carried by my kids. That's has been a definite winner for breakage, toilet drops, ocean dunks, etc..
 
Moe: Alright, tell me when I hit the sweet spot.
Homer: Deeper, you pusillanimous pilsner pusher!
Moe: Alright, alright. [with a small hammer and chisel, he taps the crayon further up Homer's nose]
Homer: De-fense! Woof-woof! De-fense! Woof-woof!
Moe: Eh, that's pretty dumb. But, uh...[taps once more]
Homer [back to normal]: Extended warranty? How can I lose?
Moe: Perfect.
 
Flying Viking said:
I bought an extended warranty for my Lexus - I'm now rolling into my 5th year of ownership (last year of the extended warranty) and I have used it exactly once, for a faulty tire pressure gauge. In contrast, my last car - a Mercedes - started to act up real quick once the factory warranty expired. And those suckers are expensive to repair.

So I guess the answer is 'do you feel lucky, punk?'
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exactly!

I agree. It's a crap shoot. I've tried not to buy them and did not have one on a new 2007 turbo forrester I got burned as it faltered with JUST over the warranty miles on it. I immed. Got the dash warning lights turned off and traded it. It's the same as buying an old plane. We also fell for a " certified" 14000 mile used Mercedes, with warranty left on it. A 320 sedan I think it was, 2003. A real dog so we dumped it with warranty remaining on the advice of THE SERVICE MANAGER!
 
Big purchase items we tend to buy them. Cars, houses, etc. I have had to use them and what I have saved on the few I used has paid for themselves and all the others I have purchased to date. With that said, it's risk acceptance. High value items I care about I see the benefit and peace of mind. For low value items is it really worth $18 to possibly replace $180 tool that I don't use an a heavy basics. Not for me. Is it worth $1200 to protect a $60000 diesel truck, yes in my book.


Sent from my iPhone using Tapatalk
 
steingar said:
I had one on my first convertible, seemed a little more like an insurance policy than a warranty. Didn't use it for anything.

I wish I'd had one on the current convertible. I'm about to plunk down another couple AMUs to fix the damn thing.
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All the third party "extended warranties" are exactly that, insurance policies, and fall under insurance law regulations.

Some factory offer 'extended warranties' are ok deals depending on the model, I haven't seen a third party one that was a good idea.
 
woodchucker said:
Looking to buy a new Sentra for the wife.

The only person I heard say they wish that they had purchased an extended warranty was because her engine went poof.

So, are they largely scams?
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Does Hyaundai still offer the 10 year 100k warranty. If so, go that route, they are good cars.
 
N747JB said:
Extended warranties are just like any other insurance, you may or may not need it. On something as simple as a Sentra, I wouldn't be as concerned about getting a warranty, but if you do insist on a NISSAN warranty, not an aftermarket one. You can shop the price on the warranty just like the car. ;)
With all the electronics and gadgets on some cars, I think it would be wise to consider, but to each his own. :D
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Spoken by the guy who knows his siht...:yes::yes:....:thumbsup:
 
TommyG said:
Does Hyaundai still offer the 10 year 100k warranty. If so, go that route, they are good cars.
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It's just basic power train items, the stuff that breaks and is expensive is the new electronics. Think of an airplane with multiple glass panels, what's more likely to fail after a couple years, but before you reach 1000 hours the engine or one of the gee wiz things in front of you.:)
 
N747JB said:
It's just basic power train items, the stuff that breaks and is expensive is the new electronics. Think of an airplane with multiple glass panels, what's more likely to fail after a couple years, but before you reach 1000 hours the engine or one of the gee wiz things in front of you.:)
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How about Kia? They used to have the best warranty in the industry with a 10/100,000 bumper to bumper, and they were good at honoring it.
 
Walboy said:
It's insurance. It is a product to transfer the risk of financial loss to someone else. The contract is well written so that given the law of large numbers, the entity selling the contract will come out ahead financially. Why should it be any other way? That's capitalism. The expected return for the purchaser on all insurance products is negative.

The real question is whether or not you can financially withstand an unexpected repair.
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Best answer. Like all insurance, if you can really afford to self-insure, you may come out ahead in the long run by doing that. Of course there are other potential benefits to buying insurance and fixing your potential losses upfront. The reason many people consider extended warranties a scam is because 1) they exclude a bunch of stuff, and you need to pay attention to what that stuff is; and 2) the markups are huge (but negotiable).

When we bought our Hyundai, we got an extended warranty because the factory 10/100 warranty is to the first purchaser only. The extended warranty extends the bumper to bumper warranty to 10/100 and makes it transferable. That will make the car more valuable if I sell it before 100k, something that self insuring can't do. And I paid less than dealer cost.
 
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