School me on extended warranties

jeep9mm

New Member
Joined
Mar 20, 2005
Location
Charlotte, Wilmington
I know people say that extended warranties are a waste of money since u could probably pay off all repairs with the cost of the warranty...but give me your opinion with specific examples

2005 Subaru Legacy GT 35,000 miles for 18000$...ext warranty would be around 1500

2004 Accord v6 35000 miles for 18000$....ext warranty is 500.

the accord might seem like a good idea, but let me know what u thik
 
$500 seems like an awefully good deal. Maybe too good?
Personally my feeling is that of you are financing, so the extra for teh warranty is functionally small (e.g. not shelling all out at once) then go for it. Yues, you're probably losing money (statistically somebody HAS to be) but for $15/mo or whatever teh security is worthwhile.
In contrast, if you're paying all up front and you actually have all the money possibly going into the warranty... then save it and put it in the bank, let it gather interest in you r favor until you need it.
 
well the honda is just 500 because thats what Honda charges for their certified pre owned service...if you dont buy it, the car is not eligible for the programs 100k/7 year warranty
 
If the Warranty is from a 3rd party ( not manufacturer) don't bother. there are so many loop holes that it ends up being a waste of cash unless you are willing to be a real hard ass. and that takes a lot of time.

Any of the emissions items the warranty will cover would usually be covered under manufactuerer warranty to about 80k, as per federal guide lines.

Save the cash, if you buy the Subaru, save some cash for the timing belt, water pump and crank seal replacement that is inevitable, at about 80,000 miles ( give or take)

The Honda will need the belt and WP at 105k or better
 
Many years ago, I bot a Grand Wagoneer (FSJ) that was a hair over a year old and just out of factory warranty. Part of the negotiations with Leith in Cary got me a good deal on the extended warranty, and the numbers were good enough to give it a shot. It was like $1200 for three years major mechanical.

About a week after purchasing the 'gooner and the service contract, I get a letter from the warranty company telling me that four wheel drive vehicles were not covered, and that Leith had mistakenly sold me the warranty.

The warranty company would let me cancel with like a $500 cancellation fee, around $100 "administrative fee" and another $100 or so for "prorated service" (the one week between signing and cancellation. $700 to get out of a contract that didn't apply to my vehicle. I would have gotten back $500 out of the original $1200.

Leith didn't want to work with me on the deal, only offering back about $100, which they said was their markup on the service contract.

Leith totally stonewalled me on it, and lost all future business from me in the process. They finally, though, did refund the contract amount, after I contacted the NC Attorney General office, and had a local law firm send them a nastygram.

Ended up I got about 1150 of the 1200 back, less about $75 to get the letter written and mailed.

I think the 3rd party warranty companies, and the dealers that push them are [I can't say it here but you know what they are].
 
as voodoo said the 3rd party warentees can take time/effort to work with and have many exclusions. BUT a coworker had a pontiac grand pre with ~250k that he almost every major mechianical replace and or repaired at some point, there was a shop down the street from work that did the work, there was ~$100 deductable on small stuff and $500 on major (open engine/tranny) etc.. BUT on a car like that using book time, a damn alternator costs $200 plus the labor so he made out huge in the long run... He did however keep good records with oil change and maintenance and had this same local shop do any and all repairs NOT under the warrantee at their normal regular prices, so they were helpful when doing the warentee work..

All that said im not sure id buy an extended warentee...
 
I worked in a dealership for over 16 years. I've dealt with every extended warranty out there, at least up to about 3 years ago.

Factory warranties are the only ones to buy, unless your car isn't eligible.

I can't tell you how many times and how many different ways I've seen aftermarket warranty companies screw the customer.

Most common one I ran in to was, I'd call the warranty company, hammer out an agreed-upon, final, taxes-and-everything price, do the work and then fax them the paperwork. They were then supposed to call back our cashier (or fax them) a corporate CC and the amount.
Can't tell you how many times they called back and shorted the amount, even when there was nothing wrong with the invoice and it was exactly as they agreed...they'd still short it, and leave the customer to pay the difference.

Also, I've seen companies authorize tranny repairs, but wouldn't pay for fluid. Front end repairs but wouldn't pay for re-alignment. Etc, etc.

Bottom line is, they suck and for awhile we wouldn't even take them....we'd make the customer responsible for everything.
Eventually that changed, but even then we always advised the customers that they might and likely would end up owing more than their deductible when the repair was done.
 
SEAIRESCUE said:
Buy the Honda, its the best deal, and you won't need the warranty.
Click to expand...
Sure you won't....Hondas and Toyotas don't break...that's why you can go to any Honda/Toyota dealership and see a service dept. full of cars being repaired, and that's why the largest independent auto repair shop in the Triangle (TAO Auto) got that way by repairing almost exclusively Hondas.
The difference is mainly perception. Honda and Toyota years ago started educating their customers on the importance of maintaining their cars, especially in returning to the dealership for service. Domestic makers at the same time were touting longer and longer maintenance intervals, and how little you needed to do to them to keep them running.
So two things gradually happened: One was, it gradually became common knowledge that you needed to follow that maintenance schedule for those rice cars, and you practically didn't have to do any of the traditional PM's on domestics.
The second thing that happened was, Jap cars started lasting longer than domestics.
Now, I'll concede that in the late 80's to early 90's, the American cars (particularly Ford) had some terrible problems that no amount of maintenance would overcome, and at the same time the Jap cars started becoming better-made than in the past.
But, by the late 90's until now, I'd say that American cars are nearly on par with the Hondas and Toyotas of the world, as far as reliability is concerned...IF YOU TAKE CARE OF THEM.
It is an undeniable fact that domestic car owners simply don't maintain their cars as well or religiously as some of the Jap car owners do.
Ford has known about this for at least 9-10 years (probably more), and I'm sure GM and Chrysler know it, too.
Key is, will they ever do anything about it? Ford sort of tried, about 6-7 years ago, but like everything else they do, it fizzled out.
 
ok so here is my 2 cents.
i just bought a 72 month/125,000 mile extened on a used chevy colorado that has 6000 miles on it. needless to say it still has factory coverage (3yrs, 36,000 miles).
the thing about the extended is that it covers all the tiny crap like hardware, weatherstripping, head to toe, all that junk.
it also has a "disappearing deductible", meaning if i take it to the dealership i got it from, supposedly there will be no out of pocket.
haggle a bit, they can usually give you a better deal on it.
so in the end, with gap insurance and the extended warranty, its about $8 more per payment.
that's pretty much the cost of an appetizer at a resteraunt.
$8 isn't bad for a little extra peace of mind, IMO. (especially considering i just totaled my last truck, check the thread)
 
chuckwhut said:
ok so here is my 2 cents.
i just bought a 72 month/125,000 mile extened on a used chevy colorado that has 6000 miles on it. needless to say it still has factory coverage (3yrs, 36,000 miles).
Click to expand...
The thing is, though, is that what you REALLY bought was a 3 year, 90k mile warranty. That warranty runs concurrently with your factory warranty, so the first 3 years of the warranty are worthless...it just sounds better to say "6yrs/125k".

But the factory bumper to bumper is in effect for the first 3 years, and the extended doesn't kick in until the factory warranty is up.
 
Pacfanweb said:
The thing is, though, is that what you REALLY bought was a 3 year, 90k mile warranty. That warranty runs concurrently with your factory warranty, so the first 3 years of the warranty are worthless...it just sounds better to say "6yrs/125k".
But the factory bumper to bumper is in effect for the first 3 years, and the extended doesn't kick in until the factory warranty is up.
Click to expand...

i'll give you that, that the warranties start at the same time, but as i understand it if something is not covered on the factory, the the 3rd party will pick it up, as extensive as it is.

it also includes roadside assistance, lodging (say i get stuck at the beach with a broken down truck, they pay for my hotel), little things like that.

so yeah, my extra "time" is really only 36 more months and 89000 miles, but it will pick up on where the factory lacks in the mean time. and like i said, it costs the same as an appetizer at chili's (per month).
 
I guess here is the real question. Obviously, the better deal is the Honda...for 500 bucks I get peace of mind for a while, probably longer that I will own the car. THing is...i kinda prefer the Subaru. I have had good reliability experiences with Subaru, but it its not certified...yet it is still eligible for an extended factory warranty. The Honda dealer asking 500 bucks is a given that I would take it...but is the Legacy good enough (35K miles 2005 model year) that i would likely spend less than 1500(warranty cost) in repairs, at least till 2012, 100K miles?

I want one of these two. I prefer the Legacy bc I am moving up north and like the idea of awd and it has four doors...but the Honda makes it so easy to own.
My positive experiences with Subaru have been with a Naturally aspired 4 cyl...i wonder if that changes when that boxer engine is being pulled by 250hp. Overall, i prefer reliability over any other factor that makes me like one vehicle over the other...your honest opinion, in quality...is the subaru as good as the Honda?
 
Call Subaru directly and see if they have a warranty program for their cars. If so, maybe find a used one at a SUBARU dealer so they can build the extended factory warranty in with your used (or new) car purchase.

I had a 3rd party plan that worked, which was a miracle, because a year or two later I got the class action letter where they turned out to be one of the deals where they took a bunch of cash and closed doors. I just got lucky they had to repair my tranny during the period they were still paying stuff.

I did NOT buy the warranty for my new Scion (or the wifes VW a couple years ago) because I know when the factory warranty is about up, they will send me another offer and I can buy it THEN and keep my cash during the 3-4 years between.

Also, that allows me to know for sure I am keeping the car beyond the original warranty. In my wifes car's case, I will be trading it in about the time the factory warranty goes, so all the extra cash would have been lost.

But...if I was buying USED...I prob would get a factory extended if I could.

Sam
 
When I bought my Wrangler in 03 it was sold with a 3rd party Warranty. It was 36 months or 40k. He paid just over 1200 for it right before I bought it. Paid $50 to have it transferred in my name. I could go anywhere I wanted to have it serviced, just call ahead of time. There was a $200 deductable........ So they coverd $600 out of an $860 bill (there was $60 that wasn't applicable). I had to pay for everything up front, and then they sent me a check about 3 weeks later. The warranty was through Motor Vehicle Protection corp. out of New Jersey. It sucks forking over a chunk of change and then having to pay a deductable, but I think most factory extended warranties are the same. They didn't give me a hard time but I have heard WAY more bad stories than good.
 
People call me shop daily and ask if we take 3rd party warrenties. My answer is yes...however you car does not leave th shop until the bill is paid either by you or them. They love to jerk shops around and tell me what they will pay for a repair like I'm running a 3rd world open air market where haggling is the norm. I tell them if you're only going to pay "X" amount of time for this repair then you need to find somewhere else that will fix it for that. I hate them, they are a scam for the most part and would never ever recommend anyone buy one.
 
Pacfanweb said:
Sure you won't....Hondas and Toyotas don't break...that's why you can go to any Honda/Toyota dealership and see a service dept. full of cars being repaired, and that's why the largest independent auto repair shop in the Triangle (TAO Auto) got that way by repairing almost exclusively Hondas.
The difference is mainly perception. Honda and Toyota years ago started educating their customers on the importance of maintaining their cars, especially in returning to the dealership for service. Domestic makers at the same time were touting longer and longer maintenance intervals, and how little you needed to do to them to keep them running.
So two things gradually happened: One was, it gradually became common knowledge that you needed to follow that maintenance schedule for those rice cars, and you practically didn't have to do any of the traditional PM's on domestics.
The second thing that happened was, Jap cars started lasting longer than domestics.
Now, I'll concede that in the late 80's to early 90's, the American cars (particularly Ford) had some terrible problems that no amount of maintenance would overcome, and at the same time the Jap cars started becoming better-made than in the past.
But, by the late 90's until now, I'd say that American cars are nearly on par with the Hondas and Toyotas of the world, as far as reliability is concerned...IF YOU TAKE CARE OF THEM.
It is an undeniable fact that domestic car owners simply don't maintain their cars as well or religiously as some of the Jap car owners do.
Ford has known about this for at least 9-10 years (probably more), and I'm sure GM and Chrysler know it, too.
Key is, will they ever do anything about it? Ford sort of tried, about 6-7 years ago, but like everything else they do, it fizzled out.
Click to expand...
I sure see a ton more late model domestic cars along side the road with a white flag on them than imports. IMO it's not just that the domestics are less reliable, they're a complete nightmare to work on. They put stuff in the way just to put stuff in the way. GM would have to pay me over $100k a year salary for the headache of me working on their cars. I fixed BMW's on flat rate for half that. Because for the most part BMW's were made to be worked on. GM products are not.
 
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