Are Extended Warranties for Autos Worth It?

[Cyclonepride]

If they were worth it, they wouldn't try so hard to sell you one. In general on a new car if something is going to break, it'll break early during the manufacturers warranty. After that, things will last until they wear out. There are certainly anecdotes of situations where it saved money. But on average, they're costing more than they save.

But that being said, such is the same with things like homeowners insurance. Most people will pay in more than they'll ever get out of it. So really it depends on how much risk you're willing to take. Play it safe and know what your expenses will be, or take a chance to save some money with the thought that there's a small chance you're going to have to pay more.

From what I've seen, extended warranties are high commission add on's, which is why some salespeople push them so hard. That tells me that there is a lot of money to be made, and almost certainly not worth it.

 

[isufbcurt]

I have one that covers everything except routine maintance (oil changes, brake pads/rotors, etc.). It's already paid off for me since the transmission had to be replaced at 80K and the engine was replaced at 95K. Pretty much 3 years after buying it I have a brand new vehicle.

Plus living on the gravel road I'll need struts and wheel bearings replaced sometime and the warranty covers that too.

 

[BCClone]

From what I've seen, extended warranties are high commission add on's, which is why some salespeople push them so hard. That tells me that there is a lot of money to be made, and almost certainly not worth it.

Whatever the MSRP is, the cost is half that. High margin and highly negotiable on price. Speaking as when at the dealership, uncertain with the aftermarket ones.

 

[Tre4ISU]

Insurance of any type is by definition a losing proposition on average. If you have the money to replace the car, it's 100% not worth it.

I pay about $700 a year for insurance and got an $85,000 check last year because a vehicle got struck by lightning. So, yeah, maybe a lot of people don't come out ahead, but the downside is much bigger by not having it and needing it rather than vice versa.

Note: Big thanks to the massive vehicle inflation.

 

[isufbcurt]

Whatever the MSRP is, the cost is half that. High margin and highly negotiable on price. Speaking as when at the dealership, uncertain with the aftermarket ones.

Huh? mine was $3500 and well worth it

 

[Tre4ISU]

As for extended warranties:

I think of them as one of those things you either always do or never do. There's probably going to be one time in a families lifer where they need it and it likely won't be worth more than the premiums paid but it's piece of mind and nice in the moment.

 

[BCClone]

Huh? mine was $3500 and well worth it

If the dealer says the price of the warranty is $2,000. Their cost is $1,000 and have $1,000 in profit. Why you can work them down a good 1/4 without much work usually.

 

[CloniesForLife]

We bought a brand new RAV4 that came with a lot of the "bells and whistles'" normally I'm very against additional warranties but it covered everything for the life of the car and it's a car we plan on driving for a longgggg time (never bought brand new before) so even though Toyota's are generally pretty good I figured a couple grand to cover everything was potentially worth it. Now I don't have to worry about it. I totally understand there is a reason they offer them and they are probably a huge money maker for them

 

[BoxsterCy]

I have one that covers everything except routine maintance (oil changes, brake pads/rotors, etc.). It's already paid off for me since the transmission had to be replaced at 80K and the engine was replaced at 95K. Pretty much 3 years after buying it I have a brand new vehicle.

Plus living on the gravel road I'll need struts and wheel bearings replaced sometime and the warranty covers that too.

Do beat your cars like a rented mule to keep your racing edge all year round?

 

[isufbcurt]

We bought a brand new RAV4 that came with a lot of the "bells and whistles'" normally I'm very against additional warranties but it covered everything for the life of the car and it's a car we plan on driving for a longgggg time (never bought brand new before) so even though Toyota's are generally pretty good I figured a couple grand to cover everything was potentially worth it. Now I don't have to worry about it. I totally understand there is a reason they offer them and they are probably a huge money maker for them

That's how mine is. As long as I own the car the warranty is good. In the event that the vehicle is so old and the cost to repair it doesn't make sense then they buy the car from me.

 

[keepngoal]

From what I've seen, extended warranties are high commission add on's, which is why some salespeople push them so hard. That tells me that there is a lot of money to be made, and almost certainly not worth it.

Back when Best Buy had commission sales people, we earned bank on extended warranties. 50% commission, and they always were tied to contests on the weekend. We had one sales person, James, who would fly around introducing himself, hand out a card, and say I'll be right with you. **** James.

However, we made $100 on the warranty for your 50" rear projection TV .... sweet sweet gravy.

Take this anecdote as you wish.

 

[isufbcurt]

Do beat your cars like a rented mule to keep your racing edge all year round?

No but I do drive a lot.

The engine had a coolant getting in the cylinder causing a misfire. They said it was more efficient to replace the entire engine than to tear it down and try to fix it.

 

[BoxsterCy]

No but I do drive a lot.

The engine had a coolant getting in the cylinder causing a misfire. They said it was more efficient to replace the entire engine than to tear it down and try to fix it.

Almost had that happen to old '86 Porsche 924S. Saw "mud" in the coolant reservoir. The gaskets in the stupid oil cooler the German engineers thought was a good idea had leaked. Fortunately most of the leaking was oil into the coolant system and less coolant into the engine and car wasn't driven like that for far. Did take multiple flushes to get that gunk out of the radiator.

 

[nickcyv]

Generally not worth it and even less so buying at the dealership. Go to the market, the mark up on warranties and all ancillary products at the dealership is very high.

 

[cyjones75]

I’ve purchased 3 or 4 in my life. Only one saved me money. They’re all profit which is why they pound you. My worst ExW experience was with Best Buy 21 years ago on a son’s computer. We walked out and bought one elsewhere. Will say have had decent interactions with BB in recent years.

 

[Rabbuk]

Probably depends on your risk tolerance and ability to self fund a major future repair. But no, dealerships wouldn't offer them if they didn't on the aggregate make them money.

 

[NickTheGreat]

Extended warranties are never worth it in the long run for anything. As in, your life.

If you got an engine repair out of it, you'd better never buy an extended warranty again, before it evens out.

 

[VeloClone]

I had a nightmare of a time on a maintenance plan - the only one I have ever bought. The dealership put the mileage as 50,000 over the current mileage on the paperwork but the warranty that I was buying was supposed to be ending at odometer 50,000. So everytime I had to use it after the first time they had in their system that it was expired and they weren't going to pay. I fought them for years on it every time I tried to use it. Finally when my car was near the mileage on my paperwork they told me what the problem was and why it came up as expired every time I tried to use it.

I probably got the dollar amount of service out of it that I paid in, but it definitely wasn't worth the headache of fighting with them every single time I tried to use it. I don't go there anymore.

 

[madguy30]

Really seems like any warranty I've had didn't cover anything that went wrong with the car.

Once I had a 'bumper to bumper' deal and something went on and made me feel like they were really only covering one bumper or the other.

 

[Marcelason78]

Are Extended Warranties for Autos Worth It? I just bought a new 2023 Subaru Forester Limited with all the bells and whistles. It was highly rated as reliable with lots of safety features. It replaced my wife's 11-year-old Hyundai Elantra with 180k miles, which got totaled in an accident. I turned down the 7-year extended warranty offered by the dealer despite the fact that I was able to negotiate the cost much lower. The Subaru (and most other vehicles we considered) are technological wonders compared to the car it replaced. I am wondering if cars are more prone to maintenance due to all of the tech especially computer chips placed in the vehicles to maintain the safety features, cvt transmissions, etc.

In general, I do not believe in and buy extended warranties for autos or electronics. I assume if you purchase a reliable card and maintain it, it should give you many years of service. I usually buy new cars. On average, we keep our cars for 10 to 12 years. I usually notice issues beginning in year 10. Our other car, an eleven-year-old Hyundai Sante Fe, had its first major issue in year 10. The alternator had to be replaced. That was followed by a front axle issue in year 11. In the past month, we just had to replace the headlamps and low tire pressure sensor. The Sante Fe was consider to be a premium model / trim when it was purchased. But nothing compared to the cars being sold today. Is it possible to own the new generation of cars for 10 years without much major maintenance and / or need for an extended warranty?

My brother (very good mechanic) just bought the same vehicle. For the first in his life he bought the extended warranty on it because of the number of computer related issues he might encounter.