Extended Vehicle Warranty: Worth it or Not?
- Thread starter cycloner29
- Start date
If I can provide any bit of wisdom, I'd like it to be this. If this is the buyers situation, they are making a mistake with the car purchase in the first place. If they can afford the extra payment, this should be stashed away so they can quickly get to the point where a repair is affordable.
Better yet, buy whatever you can afford to pay cash for, drive as little as possible, carry only liability and put your money to work for you. Cars are horrid money holes. I actually love cars, and if I were wealthy, you would probably see me cruising around town in a perfect 1950 Ford. Until that day, look at a car as a really inefficient and costly tool that should be used sparingly.
The occassional $5,000 hit? You "occasionally" have $5,000 repair bills on your vehicle? Do you live in a warzone or something?
It is not a scam. You are basically buying insurance against future issues with your vehicle. Well....I guess it is as scam if you consider health, auto, and/or life insurance scams.
The difference here though is the smart consumer self insures for future unexpected car repairs. The same can't realistically be done for most of us in the case of life, auto, and health insurance because the potential loss could be in the hundreds of thousands of dollars. Not so with any car repair, so you self-insure instead.
Over time, stick money aside in a saving account, money market account, conservative mutual fund, etc. so it is always available should an unexpected car repair come up. I never have more than a few second discussion with any salesperson anywhere pushing an extended warranty when I simply tell them I self-insure for things like this. They have no comeback for that.
The difference here though is the smart consumer self insures for future unexpected car repairs. The same can't realistically be done for most of us in the case of life, auto, and health insurance because the potential loss could be in the hundreds of thousands of dollars. Not so with any car repair, so you self-insure instead.
Over time, stick money aside in a saving account, money market account, conservative mutual fund, etc. so it is always available should an unexpected car repair come up. I never have more than a few second discussion with any salesperson anywhere pushing an extended warranty when I simply tell them I self-insure for things like this. They have no comeback for that.
It's too bad some people limit their choices. I've owned probably 10 different brands and would have missed out on some really great cars if I would have limited my choices.
A lot of people think the brands they are eliminating are produced entirely overseas. I think my Toyota was built in CA or NC, can't recall for sure right now.
I agree with everything you wrote. But I'm not naive enough, and I'm sure you're not either, to believe that everyone will actually follow your advice.
I disagree. Extended warranties are the EASIEST thing to negotiate with a dealer. When I bought my new Altima last May, I ended up getting getting the extended warranty (extra 50,000 miles) for like $795. She started out at like $1,900. I just kept saying until she wouldn't drop the price anymore. Will I need it? Who knows but like others have said, its an insurance policy that I don't have to worry about paying out of pocket for almost as long as I own the car. If I do, the warranty will likely pay for itself with one trip to the dealer.
So if you can get one very cheap, its worth considering IMO.
First off, never buy these through your dealer, they are such a huge rip off.
I elected to get gap coverage, which the dealer wanted 100 per month for, through my bank, who charged $6 per month, with better coverage.
Allot of if just depends on how much you can get the warranty for. In general, I think they are a rip off, but I have seen a few decent deals.
I elected to get gap coverage, which the dealer wanted 100 per month for, through my bank, who charged $6 per month, with better coverage.
Allot of if just depends on how much you can get the warranty for. In general, I think they are a rip off, but I have seen a few decent deals.
Snowcraig has a very good point. Buying anything through your dealer will be expensive. Go to the open market and shop around if you want one. I had one, and it never covered a thing.
This. :yes: I would never buy one, but it depends on what vehicle you're looking at. I'm very careful about what vehicles I buy and therefore have very low risk of repairs and know if something does come up I will be money ahead just paying for it then. Over time I would spend far more on warranties than I would on actual repairs, but again depends on the vehicle, i.e. an Odyssey with 30k I wouldn't even consider but a Chrysler T&C with 30k, sign me up for that warranty!
This post is Ricky Stanzi approved
"hey. uhh. you know ricky has played in more bowl games than like, uhh, all of iowa state, ever. huh huh huh"
So to summarize, if you're car ends up being a lemon or expensive to fix, than a warranty makes sense. If you buy a car that turns out to be reliable, it was a waste of money.
It's a lot like insurance. I haven't been to the doctor in 7 years so health insurance has been a waste of money for me. If next year I have cancer, it won't be a waste of money. So is the car your buying the equivalent of a healthy 20 year old or a 80 year old 3 pack a day smoker?
It's a lot like insurance. I haven't been to the doctor in 7 years so health insurance has been a waste of money for me. If next year I have cancer, it won't be a waste of money. So is the car your buying the equivalent of a healthy 20 year old or a 80 year old 3 pack a day smoker?
Even at $795, the dealer was like...
Cycloneworld obviously got the last laugh because s/he clearly paid with fake money.
Seriously, I have never been a fan of them but when I recently bought a couple of years old car I looked very hard at the warranty options. The car had more bells and whistles than I would ever normally get which to me says there are that many more things to go wrong and yes, I checked to see if they were covered. We negotiated down the cost and also hung on for extending the term and mileage of the warranty at that same price. It may not still pay off in the end but I am a lot more comfortable in the deal than I would have been with the original deal.
With ANY type of insurance the seller is planning on making money. I always try to be as "Self Insured" as much a possible. In other words, I only buy enough insurance to cover major issues.
I your household finances allow you to take care of $2K-$3K repair event every 3 years or so I'd say don't buy a warranty. If you are in financial crisis with a $500 repair bill. Then it may be worth the peace of mind.
I your household finances allow you to take care of $2K-$3K repair event every 3 years or so I'd say don't buy a warranty. If you are in financial crisis with a $500 repair bill. Then it may be worth the peace of mind.
Is this just some internet rumor floating around that people hear, so they repeat? My wife has owned two Toyotas, she's on her second now, She had issues with the first one, after the warranty was up, she was having issues with the electrical system. Because she likes Toyota and didn't want to spend the money to try and figure out the electrical issue, she just decided to buy another one, against my wishes, but none the less, the things are not Bullet proof like everyone wants to say they are.
That thing was in for enough Warranty work, that I actually did consider the extended warranty on it. the worst was it kept having steering column lock up.
I owned a 2000 F-150 for 12 years and never had even a slight problem with it. So, can I just run around and say that F-150s are bullet proof, even though I know others who did have issues?
Back on topic though, Extended warranties are usually not a good deal. The only thing they really offer is peace of mind. After that, it's usually a losing bet.
