I know the general feeling after doing searches on extended warranties that people do not feel they are cost effective. Personally, I have purchased 3 and believe that the cost benefit is in favor of purchasing them. PLEASE set aside your feeling on this topic and give me feedback from anyone that HAS purchased one from a third party company. What did you like, what did you not like, would you purchase again from the extended warranty company, who would you suggest I purchase an extended warranty from if you were me.
I have already decided what type of extended warranty I want, I am looking for help deciding on what extended warranty company, I should go with.
Again, I know many do not like the idea of purchasing an extended warranty and I understand and respect that, but please lets not get into that, please....
As always, because I believe there are some of the smartest finance people on the planet visiting and posting here, THANKS for your help in advance, you are all awesome and have been helpful to me in the past and will be in the future.
Users like you can add images, links and other relevant information about this topic.
posted: May. 22, 2007 @ 8:39a
MicronDeath
Senior Member
posted: May. 22, 2007 @ 8:56a
Well it really is cost vs. expected benefit. Twice I have purchased extended warranties when the price was right, twice I did not purchase because I thought it was too expensive for what I expected to get.
The first time I bought one was for a Camry which I put 25k miles/year on. The base warranty was gone in no time and they only charged me $500 to double the factory warranty. It was a third party warranty sold by the dealer.
The second time I did the same on a 4Runner. The difference this time was that the extended warranty was refundable if unused! The 4Runner was crushed in a collision long before the extended warranty went into effect and I got the cost of the warranty refunded.
On those two cars, a couple of repairs could easily exceed $500. On the Camry alone I got around $2000 worth of repairs during the extended period. So it was worth it.
I then purchased two cars from Lexus. They offered a factory extension for $1500! No thanks! Good thing, there is no way I would have gotten my money out of that one. They are expensive to fix if you take it to Lexus, but often I take my car to a local Toyota specialist who does just as well for about 2/3 of the Lexus costs. I still take it to the dealer for some things.
It all comes down to cost vs. benefit. Get a Consumer Reports report on your car's maintenance history and you can see what kind of costs you can expect for the kind of driving you do.
PastorMikeB
Thrifty Member
posted: May. 22, 2007 @ 8:59a
MicronDeath said: Well it really is cost vs. expected benefit. Twice I have purchased extended warranties when the price was right, twice I did not purchase because I thought it was too expensive for what I expected to get.
The first time I bought one was for a Camry which I put 25k miles/year on. The base warranty was gone in no time and they only charged me $500 to double the factory warranty. It was a third party warranty sold by the dealer.
The second time I did the same on a 4Runner. The difference this time was that the extended warranty was refundable if unused! The 4Runner was crushed in a collision long before the extended warranty went into effect and I got the cost of the warranty refunded.
On those two cars, a couple of repairs could easily exceed $500. On the Camry alone I got around $2000 worth of repairs during the extended period. So it was worth it.
I then purchased two cars from Lexus. They offered a factory extension for $1500! No thanks! Good thing, there is no way I would have gotten my money out of that one. They are expensive to fix if you take it to Lexus, but often I take my car to a local Toyota specialist who does just as well for about 2/3 of the Lexus costs. I still take it to the dealer for some things.
It all comes down to cost vs. benefit. Get a Consumer Reports report on your car's maintenance history and you can see what kind of costs you can expect for the kind of driving you do.
Thanks!! I guess I wasn't clear enough and that is my fault. I know what type of warranty I want, I am looking for help deciding on which company to go with, but THANK you for your compassionate help!
Tom Martino, who runs a consumer advocate radio program on KHOW in Denver, recommends against car extedned warranties, but says if you insist on buying one, never buy a third party warranty. Buy it from the car manufacturer. he has had many complaints about third party warranty companies going out of business or rejecting many claims as normal "wear and tear".
dougfresh
Member
posted: May. 22, 2007 @ 10:09a
I paid $1000 for 5 additional years or 100k miles. I have all my work done at the dealership. The dealership won't take their credit card, but they will call and negotiate a price with them. I have never had anything declined or waited more then a week for reimbursement. http://www.warrantydirect.com
From what I remember, I think it's important to find out how their underwriter is rated. Warrantydirect's was rated very well at the time I bought it, about 4 years ago.
skibum43 said: Tom Martino, who runs a consumer advocate radio program on KHOW in Denver, recommends against car extedned warranties, but says if you insist on buying one, never buy a third party warranty. Buy it from the car manufacturer. he has had many complaints about third party warranty companies going out of business or rejecting many claims as normal "wear and tear". Tom Martino is absolutely correct. I bought a Honda Odyssey few years back. Transmission had failed just after the warranty expired. The local dealer talked to Honda and as a goodwill gesture they reparied it as if it as under warranty, otherwise it would have costed me 2.5k Recenlty I bought a used lexus which is still under warranty and did some research to get extended warranty. The main complaint from third party warranties is that they offer cheap prices but when it comes to real service they have 101 reasons to avoid paying money for the claims. I finally decided to with Lexus/Toyota Extended Warranty. After searching for Lexus/Toyota ext warr online I found a dealer who offers it for the same price as third party companies. Local dealers make huge profits on extended warranties. I never saw in my search that warranty money is refunded if not used. MicronDeath - can you mention which company offered you this service?
cornflakesdisease
New Member
posted: May. 22, 2007 @ 10:54a
I saw on the news how a large auto warranty company went bankrupt and left a lot of people out in the cold. I'd always buy from the factory. It was a mammoth warranty company that folded too. Automotive Professionals, a Chicago-area company that has filed for bankruptcy protection. 15,000 Houstonians are up a creek.
I remember once personal finance guru saying, just sock away $2,500 for car repairs after a cars 8th or 10th year because $2,500 beats a car payment for five years.
Xeon852
Senior Member - 1K
posted: May. 22, 2007 @ 11:08a
I agree on checking online to find dealers that sell the factory extended warranty at a discount - I've seen them for as much as half off.
Krillin
Thrifty Member
posted: May. 22, 2007 @ 11:14a
dougfresh said: I paid $1000 for 5 additional years or 100k miles. I have all my work done at the dealership. The dealership won't take their credit card, but they will call and negotiate a price with them. I have never had anything declined or waited more then a week for reimbursement. http://www.warrantydirect.com
From what I remember, I think it's important to find out how their underwriter is rated. Warrantydirect's was rated very well at the time I bought it, about 4 years ago.
http://aboutwarranties.org/carwarranty/
Warranty Direct's insurer declined to allow themselves to be rated. That should tell you something about their financial condition. The reinsurer may have an A+, but that protects the warranty company, not you.
Buying an extended warranty is like handing your mechanic $2000 and letting him keep it even if nothing goes wrong with your car.
Why not just put it in a savings account and if something does go wrong, you can pay out of pocket?
Most warranties, you'd have to have the engine AND transmission fail to justify the cost. Most cars will not have major problems within the first 100K miles..... this is why most warranties do not cover after 100k miles. It's simple economics.
I have couple of Hondas with over 120k miles and never had any major problems. So an extended warranty would've been a waste of money. BUT.... if you're buying a domestic vehicle.... I'd recommend a warranty because they are horrible cars. My parents spent $5k on repairs for a used Taurus they bought with only 50k miles. It never made it to 100k miles.
PastorMikeB
Thrifty Member
posted: May. 22, 2007 @ 4:16p
dougfresh said: I paid $1000 for 5 additional years or 100k miles. I have all my work done at the dealership. The dealership won't take their credit card, but they will call and negotiate a price with them. I have never had anything declined or waited more then a week for reimbursement. http://www.warrantydirect.com
From what I remember, I think it's important to find out how their underwriter is rated. Warrantydirect's was rated very well at the time I bought it, about 4 years ago.
Warranty Direct certainly has a lot of positives. I am leaning toward them, but I have had some anecdotal evidence that they might not be as good as advertised. I am looking for some more advice about them and my choice of this extended warranty.
Galun000
Senior Member
posted: May. 22, 2007 @ 4:30p
I am for extended warranties based on my personal experience. In general, the buyers as a group "lose" money on extended warranty - otherwise how will the extended warranty company make money? It's like buying insurance. You are paying for the peace of mind that you won't have a huge unexpected repair bill.
I had purchased three extended warranties. I "lost" money on one of them since the car was relatively problem free, but "made" a lot of money on two of them. Each of the two cars eventually developed engine problems. The repair bill for one of them was around $6k, the other required an engine replacement that cost $12k. In each case I paid a deductible of $50.
My suggestion on extended warranty is as follows. 1) If available, buy through the manufacturer / dealer. You will be surprised with how much you can negotiate. 2) If you have to go third party, ask this question on car model specific internet forums. If you have a Honda go to a Honda forum; BMW go to a BMW forum, etc. There will be people who had experience with this and can give you real feedback.
One of my warranty was purchased through the manufacturers, the other two via Western General. It was Western General that covered the $6k and $12k repair claims.
Another benefit for the extended warranty is that you will likely be able to get a premium price for your car if you try to sell it via private party, or at least be able to sell it quicker.
LustfortheMoment
Senior Member - 1K
posted: May. 22, 2007 @ 4:31p
I am looking for help deciding on what extended warranty company, I should go with
When it comes to extended warranties, the old adage holds:
"A SUCKER IS BORN EVERY MINUTE"
DO NOT, I REPEAT.........DO NOT purchase a third party warranty unless you're in the habit of throwing money down the drain.
Why do third party warranty companies exist??????..........TO MAKE MONEY AT YOUR EXPENSE......
The factory warranty business has become very competitive with the advent of the Net. You can find dealers who will sell factory warranties at 1/2 the price which you'd pay to your new car dealer.
Brought Geico car extended warranty, very unhappy. Never collected a cent on multiple repairs they claimed were unnessary that the dealer said was a safety issue. After the master brake cylinder was repaired it worked fine. Geico said that the engine mounts were not defective but they were actually recalled by Ford the next week after they were replaced. Did get a refund from ford.
Also they refused me to record our telephone converstion. Their right but does not inspire confidence.
Extended warranties that aren't factory are crap. Whoever said put the dough in a savings account and use it to pay for a repair when necessary is a wise person.
Even on the worst, worst car purchase of my life (1996 Grand Am - PIECE!!), I feel that I may have barely broken even. Sure, I got receipts from the dealer with inflated prices on it for various issues, but had I taken it to a regular shop, I wouldn't have spent the price of the warranty. That car only made it to 81,000 (extended warranty went to 76,000). Though, it was easy to claim because it was factory.
So, then I bought a Mitsubishi Avenger (yes, it says Dodge, but it's a Mitsu). Bought the warranty for about a grand. Never made a claim. Car was rock solid.
My sister bought a Saturn and had a 3rd party warranty. So - engine blew up. NO COVERAGE - claimed the first owner didn't change the oil or some crap like that. Water pump broke. NO COVERAGE for some other silly reason. Blown $800 because they had excuses for why our claims weren't valid. That car lasted for about 75,000.
Wife's Pontiac Grand Prix (another fine American car) - made it to a mere 83,000. Extended warranty ended at 75,000. Never got to make a claim. Then, magically, everything went wrong and that car died as well.
So - in the last 12 years or so I've spent or have seen about $4,000 spent on warranties to cover about $900 in repairs.
If Honda, go with company warranty....they offer 7yr/120m for approx 900-1000 if you search for a Honda dealer on the internet. Have done it twice...very happy...Moreover $ 0 deductible
darius11 said: Extended warranties that aren't factory are crap. Whoever said put the dough in a savings account and use it to pay for a repair when necessary is a wise person.
Even on the worst, worst car purchase of my life (1996 Grand Am - PIECE!!), I feel that I may have barely broken even. Sure, I got receipts from the dealer with inflated prices on it for various issues, but had I taken it to a regular shop, I wouldn't have spent the price of the warranty. That car only made it to 81,000 (extended warranty went to 76,000). Though, it was easy to claim because it was factory.
So, then I bought a Mitsubishi Avenger (yes, it says Dodge, but it's a Mitsu). Bought the warranty for about a grand. Never made a claim. Car was rock solid.
My sister bought a Saturn and had a 3rd party warranty. So - engine blew up. NO COVERAGE - claimed the first owner didn't change the oil or some crap like that. Water pump broke. NO COVERAGE for some other silly reason. Blown $800 because they had excuses for why our claims weren't valid. That car lasted for about 75,000.
Wife's Pontiac Grand Prix (another fine American car) - made it to a mere 83,000. Extended warranty ended at 75,000. Never got to make a claim. Then, magically, everything went wrong and that car died as well.
So - in the last 12 years or so I've spent or have seen about $4,000 spent on warranties to cover about $900 in repairs.
If your late model cars aren't lasting to 100k, you are either beating the tar out of them or not performing routine maintenance. Only the cheapest cars since the early 90's fail before 100k when taken care of reasonably.
Which all leads me to suggest spending your warranty money on proper maintenance. If you don't beat your car like a teenager and do maintain it as suggested in your manual, you should get around 200k out of it.
ScootyPuffSr
Senior Member - 2K
posted: May. 23, 2007 @ 3:11a
delzy said: darius11 said: Extended warranties that aren't factory are crap. Whoever said put the dough in a savings account and use it to pay for a repair when necessary is a wise person.
Even on the worst, worst car purchase of my life (1996 Grand Am - PIECE!!), I feel that I may have barely broken even. Sure, I got receipts from the dealer with inflated prices on it for various issues, but had I taken it to a regular shop, I wouldn't have spent the price of the warranty. That car only made it to 81,000 (extended warranty went to 76,000). Though, it was easy to claim because it was factory.
So, then I bought a Mitsubishi Avenger (yes, it says Dodge, but it's a Mitsu). Bought the warranty for about a grand. Never made a claim. Car was rock solid.
My sister bought a Saturn and had a 3rd party warranty. So - engine blew up. NO COVERAGE - claimed the first owner didn't change the oil or some crap like that. Water pump broke. NO COVERAGE for some other silly reason. Blown $800 because they had excuses for why our claims weren't valid. That car lasted for about 75,000.
Wife's Pontiac Grand Prix (another fine American car) - made it to a mere 83,000. Extended warranty ended at 75,000. Never got to make a claim. Then, magically, everything went wrong and that car died as well.
So - in the last 12 years or so I've spent or have seen about $4,000 spent on warranties to cover about $900 in repairs.
If your late model cars aren't lasting to 100k, you are either beating the tar out of them or not performing routine maintenance. Only the cheapest cars since the early 90's fail before 100k when taken care of reasonably.
Which all leads me to suggest spending your warranty money on proper maintenance. If you don't beat your car like a teenager and do maintain it as suggested in your manual, you should get around 200k out of it.
I was going to say the exact same thing. Most of my friends and I have cars with between 150,000 and 300,000 miles and none of us are having major repairs done every month or anything.
You either had some very, very unlikely statistically unlucky bad luck or you are do something wrong with the way you drive/maintain your cars. There is no reason why all your cars should be dead at 75,000-85,000 miles.
Also what I can't figure out is why you keep buying more extended warranties.
Wow, this thread is turning exactly into what the OP was pleading against. OP check your local credit union if you already have an account with them. Good credit unions offer extended warranties at competitive rates. As always, read the contract before you sign the dotted line.
Goldenlight
Member
posted: May. 23, 2007 @ 4:35a
dougfresh said: I paid $1000 for 5 additional years or 100k miles. I have all my work done at the dealership. The dealership won't take their credit card, but they will call and negotiate a price with them. I have never had anything declined or waited more then a week for reimbursement. http://www.warrantydirect.com
From what I remember, I think it's important to find out how their underwriter is rated. Warrantydirect's was rated very well at the time I bought it, about 4 years ago.
I heard good things about WarrantyDirect. This is the extended warranty I bought on my car. Usually when you go through the StealerShip I mean Dealership , they generally have a high markup on selling ext warranty. The reason I didn't go through the dealership is because I had to purchase at time of sale. Warranty direct gives you 30 days if you decide to change your mind.
For those people who have Toyota & Honda and broke before 100K miles, you either must had luck or you gotta be kidding me. Saturn is supposed to be reliable as well. Routine maintenance must be done on any car or else any car will break no matter how reliable it is.
When I bought my 04 camry, I negotiated factory repair manuals to come with it. But honestly, those factory repair manuals are hard to read so I go to toyotanation.com and other forums to see how other people do it. About.com even have videos on basic maintenence tasks. Generally you suppose to at least follow your factory manual's recommended maintenance schedule. But sometimes even the factory schedule is not enough. Mine says coolant last 5 years but you know it doesn't last that long. Mine says change spark plug every 100K but from reading the forums, the threads will melt in the sockets so I need to take it and put coating on the spark plug threads and put them back in. The factory manual don't tell me that so I go to forums to find out other people's experiences.
I can understand if you are a woman, which usually means you are not inclined to work on cars. That's fine, just get a man. If you are rich single pretty woman, then PM me. LOL
As far extended warraty goes, it depends on cars. You should not need it on honda or toyota. My mom got the dealer extended warranty on her Mercedes and it has paid itself off. Anytime if there's a problem, she takes it into the dealer and sometimes she will get a brand new mercedes loaner car to drive if the repair takes longer than a day. Of course the dealer hyped up the charges so it makes it look like she got a good deal with the warranty. I have no idea what the repair would cost if I do them myself or take it to an independent shop.
Have you thought about going with the manufacturer's warranty? They can usually be had for 50% off the MSRP - the dealerships almost always charge the MSRP price. You can get a quote for a Toyota (that's the only one they have up so far) at http://warrantyshack.com
I've also always heard good things about warrantydirect.com.
But if you want to be sure you get what you pay for, go with the manufacturer's warranty. You don't have to buy it at the time of purchase - you can buy it anytime before the 3 year/36k mile warranty runs out with most manufacturers, and you can get a pro-rated refund at anytime if you haven't had a claim.
b8b
Senior Member
posted: Jul. 3, 2007 @ 10:22p
PeterPatty said: After searching for Lexus/Toyota ext warr online I found a dealer who offers it for the same price as third party companies. Local dealers make huge profits on extended warranties. I never saw in my search that warranty money is refunded if not used. MicronDeath - can you mention which company offered you this service?
It was mentioned several times to buy a factory extended warranty and to search online... where else does one search for these and dealers who offer lower prices? warrantyshack.com only refers you to Toyota or and/or has page errors for the others. Thanks in advance.
When you are ready to accept the deal on the car itself, tell them "OK, I'll pay that for the car if you throw in the factory extended warranty at cost". They break even on the warranty sale, make money on the car sale, and the warranty keeps you coming in to them for service (where they make the bulk of their money).
b8b
Senior Member
posted: Jul. 4, 2007 @ 4:24p
taxmantoo said: When you are ready to accept the deal on the car itself, tell them "OK, I'll pay that for the car if you throw in the factory extended warranty at cost". They break even on the warranty sale, make money on the car sale, and the warranty keeps you coming in to them for service (where they make the bulk of their money).
So how are folks searching different dealers for a lower price on the extended warranty? Can I do this with a used car purchase if the factory warranty is still in effect? Thanks in advance.
speedclose
Member
posted: Jul. 4, 2007 @ 8:48p
I have bought two of them so far and very pleased with them both. One is through Allstate (I think Geico offers one too). I just used that one recently. They gave no problem but wanted to send an adjuster to the shop to look at it. But it was done very quick.
The second one is US Warranty Corp of Florida (Pompano Beach). I bought it through the Hyundai dealer and that one was great. It just expired a few months ago when I hit 100,000 miles. But just before I reached that point I took it in to a dealer and had some things fixed. I think that bill alone would have cost me about $600. I bought it for about $1400 when I had about 40k miles on the car. I could have gotten it cheaper if I had gotten it earlier. Probably in the end all the total repairs were only about the $1,400 so I came out even but the piece of mind was well worth it.
diamente said ... When I bought my 04 camry,I negotiated factory repair manuals to come with it.
Was it written in Japanese? just a thought or maybe the translation was not so good. Currently i have a 1500 extended warranty and they have paid for about 5 hundred worth of work. with General motor news 100k warranty, you might not need the extended. Anyways to answer op ? i dont have the name with me sorry.
b8b
Senior Member
posted: Jul. 5, 2007 @ 11:47a
b8b said: taxmantoo said: When you are ready to accept the deal on the car itself, tell them "OK, I'll pay that for the car if you throw in the factory extended warranty at cost". They break even on the warranty sale, make money on the car sale, and the warranty keeps you coming in to them for service (where they make the bulk of their money).
So how are folks searching different dealers for a lower price on the extended warranty? Can I do this with a used car purchase if the factory warranty is still in effect? Thanks in advance.
I still don't see how some folks who posted here were able to search for extended manufacturers warranties at different prices from different dealers without calling each (that would take a long time). Anyone?
I just came accross this one today, supposedly backed by a real insurer. I am going to check into Allstate and see what they have, Geico's has weird requirements and I never keep a car long enough to make it worth it and their's only transfers if the new owner is a Geico customer.
zzyzzx
Senior Member - 3K
posted: Jul. 5, 2007 @ 2:09p
Kobedagger said: Most warranties, you'd have to have the engine AND transmission fail to justify the cost. Most cars will not have major problems within the first 100K miles..... this is why most warranties do not cover after 100k miles. It's simple economics.
Just checked with WarrantyDirect (for educational purposes) and they wouldn't sell me one since my 1995 Escort has over 150,000 miles on it... So presumably 150,000 miles is the cutoff there.
senthilv123
Member
posted: Jul. 8, 2007 @ 4:56p
I am planning to buy Toyota Extended Warranty for my 2005 corolla and came up with below quotes from www.warrantytoyo.com/. Prices Seems atleast 30 to 40% lower than the quotes i got from my local delearship. Does anyone know of a better deal or should i jump on this?
Plan: Platinum Model: Corolla Coverage: 7 Years / 75,000 Miles Deductible: $0 Price: $770.00
Plan: Platinum Model: Corolla Coverage: 6 Years / 75,000 Miles Deductible: $0 Price: $700.00
i found my extended companys name. United car care. It was purchased before the gotta have a website listed on your card phase. The phone # is 800-571-2016. Are they any good ..??.. well they covered an air conditioner pump (or something cant remember the name) but there was already an exception for dodge to cover but they would have .... driverside window wouldnt go down (covered) rear door wouldnt open when button was pressed (didnt cover) dash light wouldnt work (covered) also had roadside assistance in the contract aswell. hope this help atleast a little.
b8b
Senior Member
posted: Jul. 9, 2007 @ 4:34p
owenscott said: i found my extended companys name. United car care. It was purchased before the gotta have a website listed on your card phase. The phone # is 800-571-2016.
They don't do direct sales anymore
b8b
Senior Member
posted: Jul. 9, 2007 @ 8:01p
I've been told that extended warranties backed by Mercury Insurance (A rated) are pretty good, and I got a quote today for a 2001 Acura MDX with 50,000miles for their Platinum (almsot bumper-to-bumper, exclusionary) extended warranty. I got the "sale" price of $1836. A good bit too much, imo.
So I thought I would Google for Mercury and found The Auto Club who's instant quote system said to call for a quote. So I called, and the guy who answered quickly stated that they do not offer the warranty in California, I told him I am not in California (that's the magic of VOIP, eh?!) but he still said he couldn't help me... feeling a bit slighted, I asked to speak to his manager, but he said he was the only guy on duty. So I said sarcastically, "wow, that's some service." and he said to call back when I got back to my home state. I naturally said, "that is not likely, considering the current treatment by your company." and he proceeded to call me both a jerk and a jackass. So I'll be avoiding them. You might want to as well.
I just bought a car from toyota, my sister works there so I got the employee discount. I was prepared to not get the extended warranty. then when my finance was being worked out they indicated that they offered the extended warranty as well for cheaper. a 7 year 100,000 for 1,200
when I got in the fiannce office they indicated that since I was buying via employee purchase I could get the 7 year 100,000 for 800 dollars, my guess is I am getting this about at cost. I originally was not going to consider it but with it being this cheap I am considering
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