Results 1 to 12 of 12

Thread: Which Matters More: Reputation or Warranty Coverage?

  1. #1
    Vulture of The Western World Eric's Avatar
    Join Date
    Jul 2006
    Location
    The Land of The Edentulites
    Posts
    22,968

    Which Matters More: Reputation or Warranty Coverage?

    Two of the factors most people consider when shopping for a new car are its overall reputation for quality and reliability (as well as that of the company which built it) and the warranty it comes with.

    What's interesting, when you think about it, is that some of the brands with the best reputation have not-so-great warranties - while some brands that aren't reflexively considered "good bets" offer much better warranty coverage.

    For example, the Japanese leaders - Toyota and Honda - offer fairly skimpy three year/36,000 mile basic/comprehensive warranty coverage with their new cars. And their "powertrain" warranties (the limited warranties that cover the engine and transmission, etc.) run to just five years or 60,000 miles. Contrast that with lesser-known brands such as Mitsubishi - which offers a much stronger five year/60,000 mile basic warranty and a lengthy, ten-year, 100,000 mile warranty on the powertrain.

    You'll discover similar disparities elsewhere - and not just from brand to brand but sometimes even within a brand, from model to model. (For example, General Motors offers better warranties on its Cadillac division models than its Chevrolet divisions models, even though all are built by the same company - GM - and in some cases, share parts - including identical engines - and are assembled in the same plants.)

    But which is more important - the reputation for high-quality and reliability?

    Or the superior warranty coverage?

    Well, for openers, a reputation is less tangible than a warranty - which is a legally binding contract with clearly specified obligations that are enforceable by a court (if need be). If your car's transmission fails while the vehicle is still "covered" then the expense of replacing it won't be your responsibility.

    You have that in writing - literally.

    Also, it should be kept in mind that the automakers don't pick the time/mileage intervals of their warranty coverages out of a hat. They do extensive durability studies "in-house" to give them a very good feel for the average lifespan of most major systems and components, such as engines and transmissions. They then base their warranty coverages on those average lifespan calculations, on the assumption that most of the cars won't have problem "x" while covered under warranty.

    It's not a perfect system, but it's reasonably accurate - sort of like the actuarial tables used by insurance underwriters. If it weren't - if the cars started to fail or have problems en masse while still covered under warranty - the result would be a financial catastrophe for the automaker.

    On the other hand, an unreliable car that's either constantly in the shop or which you can't depend on isn't worth much to you, even if the actual expense of getting it repaired is paid for under the terms of the warranty. Sometimes, unanticipated problems just happen. Sometimes, a manufacturer with a not-so-great-reputation will try to buck up consumer confidence in its vehicles by offering super-comprehensive warranties that in some cases will cover most of the vehicle's major components longer than the original buyer will own the car.

    The bottom line is that it's something of a gamble, either way.

    A car with a great reputation but a mediocre warranty could still turn out to be trouble. The current Toyota debacle is Exhibit A. Six months ago, Toyota was the proverbial gold standard, as far as its reputation for building high-quality, reliable cars was concerned. People snapped up Toyotas - often at full MSRP "sticker" - without batting eye because of the confidence they felt in the Toyota name.

    The reality, however, is proving to be a little different.

    Meanwhile, makes that have proven less trouble-prone in the real world - even if they don't yet have the established reputation - have had to resort to offering as much as twice the warranty coverage to get buyers to consider them.

    Hyundai (and its sister company, Kia) are Exhibit B.

    So, don't base your decision solely on one - or the other - consideration.

    Don't assume the car will be reliable just because it has a good reputation. There is often a lag between public perception/image and the actuality "on the ground." If you're old enough to remember the '70s, you may recall that all Japanese cars - including Hondas and Toyotas - were once considered junk; it took many years for these companies to establish a reputation for high quality. And likewise, don't assume that just because the car you're looking at comes with a really exceptional warranty, it's going to be exceptionally reliable.

    Spending an hour online researching the facts about prior recalls and major known defects from the National Highway Traffic Safety Administration's searchable database at http://www.recalls.gov/nhtsa.html and Consumer Reports detailed information about any given vehicle's general record for upkeep costs and problems reported by owners (see http://www.consumerreports.org/cro/cars/index.htm) will help you decide which matters most, the "rep" - or the warranty.

  2. #2
    Senior Member Ken's Avatar
    Join Date
    Jan 2008
    Location
    Lincolnshire, United Kingdom.
    Posts
    3,489
    Quote Originally Posted by Eric View Post
    Two of the factors most people consider when shopping for a new car are its overall reputation for quality and reliability (as well as that of the company which built it) and the warranty it comes with.

    What's interesting, when you think about it, is that some of the brands with the best reputation have not-so-great warranties - while some brands that aren't reflexively considered "good bets" offer much better warranty coverage.

    For example, the Japanese leaders - Toyota and Honda - offer fairly skimpy three year/36,000 mile basic/comprehensive warranty coverage with their new cars. And their "powertrain" warranties (the limited warranties that cover the engine and transmission, etc.) run to just five years or 60,000 miles. Contrast that with lesser-known brands such as Mitsubishi - which offers a much stronger five year/60,000 mile basic warranty and a lengthy, ten-year, 100,000 mile warranty on the powertrain.

    You'll discover similar disparities elsewhere - and not just from brand to brand but sometimes even within a brand, from model to model. (For example, General Motors offers better warranties on its Cadillac division models than its Chevrolet divisions models, even though all are built by the same company - GM - and in some cases, share parts - including identical engines - and are assembled in the same plants.)

    But which is more important - the reputation for high-quality and reliability?

    Or the superior warranty coverage?

    Well, for openers, a reputation is less tangible than a warranty - which is a legally binding contract with clearly specified obligations that are enforceable by a court (if need be). If your car's transmission fails while the vehicle is still "covered" then the expense of replacing it won't be your responsibility.

    You have that in writing - literally.

    Also, it should be kept in mind that the automakers don't pick the time/mileage intervals of their warranty coverages out of a hat. They do extensive durability studies "in-house" to give them a very good feel for the average lifespan of most major systems and components, such as engines and transmissions. They then base their warranty coverages on those average lifespan calculations, on the assumption that most of the cars won't have problem "x" while covered under warranty.

    It's not a perfect system, but it's reasonably accurate - sort of like the actuarial tables used by insurance underwriters. If it weren't - if the cars started to fail or have problems en masse while still covered under warranty - the result would be a financial catastrophe for the automaker.

    On the other hand, an unreliable car that's either constantly in the shop or which you can't depend on isn't worth much to you, even if the actual expense of getting it repaired is paid for under the terms of the warranty. Sometimes, unanticipated problems just happen. Sometimes, a manufacturer with a not-so-great-reputation will try to buck up consumer confidence in its vehicles by offering super-comprehensive warranties that in some cases will cover most of the vehicle's major components longer than the original buyer will own the car.

    The bottom line is that it's something of a gamble, either way.

    A car with a great reputation but a mediocre warranty could still turn out to be trouble. The current Toyota debacle is Exhibit A. Six months ago, Toyota was the proverbial gold standard, as far as its reputation for building high-quality, reliable cars was concerned. People snapped up Toyotas - often at full MSRP "sticker" - without batting eye because of the confidence they felt in the Toyota name.

    The reality, however, is proving to be a little different.

    Meanwhile, makes that have proven less trouble-prone in the real world - even if they don't yet have the established reputation - have had to resort to offering as much as twice the warranty coverage to get buyers to consider them.

    Hyundai (and its sister company, Kia) are Exhibit B.

    So, don't base your decision solely on one - or the other - consideration.

    Don't assume the car will be reliable just because it has a good reputation. There is often a lag between public perception/image and the actuality "on the ground." If you're old enough to remember the '70s, you may recall that all Japanese cars - including Hondas and Toyotas - were once considered junk; it took many years for these companies to establish a reputation for high quality. And likewise, don't assume that just because the car you're looking at comes with a really exceptional warranty, it's going to be exceptionally reliable.

    Spending an hour online researching the facts about prior recalls and major known defects from the National Highway Traffic Safety Administration's searchable database at http://www.recalls.gov/nhtsa.html and Consumer Reports detailed information about any given vehicle's general record for upkeep costs and problems reported by owners (see http://www.consumerreports.org/cro/cars/index.htm) will help you decide which matters most, the "rep" - or the warranty.
    Rather like the human body the amazing thing about modern cars, especially with all the electronic trickery they now embody, is that they (mostly) work in the first place.

    Possibly the choice between perceived reliability and long warranty period has to be made in the light of personal circumstance. As a UK pensioner I have a free travel card that allows me to use public bus services all over the UK (Pity it doesn't cover train services as well). This means that, to me, extended warranty is the better option as I always have an alternate travel media available at zero cost. If I did not have this facility, due to the excessive costs of public transport, then reliability might be the preferred option on the (anticipated) basis of less vehicle down time.

    Ken.
    Die dulci fruimini!
    Ken.
    Wolds Bikers, Lincolnshire, England.

  3. #3
    I would say a little bit of both matters. If car "A" has a poor reputation but a long warranty, who would buy it? You won't ever get to drive your car because it would always be broken. If car "B" has an excellent reputation but a shorter warranty, most would be more inclined to buy it because there is "un-written evidence" that car "B" is better and will last longer, regardless of warranty. Look at the 1960's and 1970's; cars came with a 1-2 year warranty. Even the pinnacle of quality at the time Mercedes only offered a 2/24,000 warranty.

  4. #4
    Senior Member
    Join Date
    Jul 2006
    Location
    Minneapolis
    Posts
    1,429
    Quote Originally Posted by Eric View Post
    Two of the factors most people consider when shopping for a new car are its overall reputation for quality and reliability (as well as that of the company which built it) and the warranty it comes with.
    I've been burned over the years, with cars that have what I call 'a time bomb'. This is a component that costs about 20% of the used cars' value. Consider that electric fuel pumps, electric throttle bodies, etc, cost a lot of money to replace.

    In the early 90's I had a BMW that needed a new electric arial - over $1000. I had to replace the windshided washer motor to the tune of $800.

    My wife's S80 needed a new tranny at 49,000 miles - just under the warranty period. The self dimming mirror went south - $950 to replace it - I did it myself for $75 and 4 hrs labor.

    My daughters 2006 Tarus needed a tranny to the tune of $2,500. Also the gas gauge stopped working - that fix is $400.

    IMO, with everything jammed into a FWD vehicle - it costs mucho bucks to fix just about anything.

    When I buy my next new car, I'm going to factor in a 100,000 warranty. You have to be careful with these warranties - they're just an insurance policy - be sure to get one that covers major components.

    There are many landmines in expensive, imports - BMW, MB, Volvo, Audi have their share of hidden engine, tranny, other expensive repairs.

    I say if you're planning to keep the car, the warranty is more important than the alleged reliability.

  5. #5
    Quote Originally Posted by dBrong View Post
    I've been burned over the years, with cars that have what I call 'a time bomb'. This is a component that costs about 20% of the used cars' value. Consider that electric fuel pumps, electric throttle bodies, etc, cost a lot of money to replace.

    In the early 90's I had a BMW that needed a new electric arial - over $1000. I had to replace the windshided washer motor to the tune of $800.

    My wife's S80 needed a new tranny at 49,000 miles - just under the warranty period. The self dimming mirror went south - $950 to replace it - I did it myself for $75 and 4 hrs labor.

    My daughters 2006 Tarus needed a tranny to the tune of $2,500. Also the gas gauge stopped working - that fix is $400.

    IMO, with everything jammed into a FWD vehicle - it costs mucho bucks to fix just about anything.

    When I buy my next new car, I'm going to factor in a 100,000 warranty. You have to be careful with these warranties - they're just an insurance policy - be sure to get one that covers major components.

    There are many landmines in expensive, imports - BMW, MB, Volvo, Audi have their share of hidden engine, tranny, other expensive repairs.

    I say if you're planning to keep the car, the warranty is more important than the alleged reliability.
    "I had a BMW" well there's your problem.....

    Those FWD Volvo's aren't worth shit. The old RWD platform was great, but when they switched to the FWD they have just gone downhill. Another trusty brand lost.


    No offense intended to those that like BMW's I'm just sayin'.

  6. #6
    Vulture of The Western World Eric's Avatar
    Join Date
    Jul 2006
    Location
    The Land of The Edentulites
    Posts
    22,968
    Quote Originally Posted by dieseleverything View Post
    "I had a BMW" well there's your problem.....

    Those FWD Volvo's aren't worth shit. The old RWD platform was great, but when they switched to the FWD they have just gone downhill. Another trusty brand lost.


    No offense intended to those that like BMW's I'm just sayin'.
    Gotta agree.

    Those old RWD "box" Volvos would literally go almost forever. The new ones are crap in comparison.

  7. #7
    Senior Member J. ZIMM's Avatar
    Join Date
    Mar 2008
    Location
    THE HIGH DESERT, OREGON
    Posts
    371
    This could be why the Volvo Brand could be going by-by. Since Ford took it over a few years back. The last I heard, they have not found a buyer for the brand. There have been many Company's that built up a good solid reputation though out the years, only to cheapen up the product and keep trying to sell us on how great that product is, since they have been making it since way back when. My feelings are, if that product was so good, wouldn't word of mouth keep it going to a certain amount? I agree that Auto Brands have gone by the way side of late. But here again, if cars built by the big 2 and a half were any good, wouldn't they be in a lot better shape than what they are? And yet, the only one I see, so far, are the GM boys trying to get people to buy their product by increasing the Warranty on some of their products. I would think that all of them should be good for at least 100,000 miles and Ten Years on the road. But then, no one would be buying a new car but every ten years. I have one that I bought new in 2000. So far the Transmission was rebuilt at 30K, the front end has had the tie rods replaced at 36K, 52K,and now they need to be replaced again. It only has 62K on the clock. They claim it has been the best selling truck for 32 years. They use to make a good product, say thirty years ago. But not this one. Most people, like me, cannot afford to buy a new rig every couple of years or so. And don't count on those Extended Warranties either. They're not worth the paper they are written on. Been there, done that.

  8. #8
    Senior Member
    Join Date
    Jul 2006
    Posts
    1,073
    Quote Originally Posted by J. ZIMM View Post
    This could be why the Volvo Brand could be going by-by. Since Ford took it over a few years back. The last I heard, they have not found a buyer for the brand. of their products.
    Volvo was sold to Geely, a Chinese company, at the end of 2009.

    And don't count on those Extended Warranties either. They're not worth the paper they are written on. Been there, done that.
    I, too, have been there, done that! Read the terms & conditions carefully & you find they exclude more than they cover. . .

  9. #9
    Vulture of The Western World Eric's Avatar
    Join Date
    Jul 2006
    Location
    The Land of The Edentulites
    Posts
    22,968
    Volvo used to be a sort of Swedish VW; it built really solid, high-value cars that just ran and ran and ran.

    Then (also like VW) it decided to move "upscale" and this has been a disaster - for Volvo and for Volvo buyers. The cars are now obnoxiously expensive/complex yet don't have the status/cachet of similarly expensive BMWs and Audis, etc.

    So, people aren't buying them.

    Can you say, "Phaeton"?

  10. #10
    Senior Member
    Join Date
    Jul 2006
    Posts
    1,073
    Quote Originally Posted by Eric View Post
    Then (also like VW) it decided to move "upscale" and this has been a disaster - for Volvo and for Volvo buyers. The cars are now obnoxiously expensive/complex yet don't have the status/cachet of similarly expensive BMWs and Audis, etc.
    Not the way I see it! For the first time ever, there's a Volvo I'd seriously consider buying - the C30. Under Ford, Volvo moved away from building ugly, overweight "tanks" to much more mainstream cars. Truth be told, the C30 is to all intents & purposes a Focus coupé - and, in my opinion, none the worse for that! Looking at where SAAB is right now, Volvo hasn't done too badly.

    Can you say, "Phaeton"?
    Where would Bentley be without the Phaeton?

  11. #11
    Vulture of The Western World Eric's Avatar
    Join Date
    Jul 2006
    Location
    The Land of The Edentulites
    Posts
    22,968
    Quote Originally Posted by Dave Brand View Post
    Not the way I see it! For the first time ever, there's a Volvo I'd seriously consider buying - the C30. Under Ford, Volvo moved away from building ugly, overweight "tanks" to much more mainstream cars. Truth be told, the C30 is to all intents & purposes a Focus coupé - and, in my opinion, none the worse for that! Looking at where SAAB is right now, Volvo hasn't done too badly.



    Where would Bentley be without the Phaeton?
    Oh, they're nice cars - I don't disagree. The problem is they're priced comparably to "accepted" luxury brands, such as BMW and Audi - and Volvos just don't have the status of those cars, which makes it harder to sell them to typical prospects.

    I grant the old school Volvos were ugly and slow; but they were also very rugged/reliable and affordable to buy and operate - which the new ones aren't.

    Volvo used to have a very distinct offering - now it doesn't. Current models are pretty much the same as other luxury and entry-luxury cars - but without the status. It doesn't help at all the Volvo's platforms are all FWD/AWD given virtually all the serious players at this price level are RWD-based.

  12. #12
    Senior Member Mase's Avatar
    Join Date
    Aug 2006
    Posts
    840
    Quote Originally Posted by Dave Brand View Post



    Where would Bentley be without the Phaeton?
    Did someone say Bentley?






Similar Threads

  1. Seasonal coverage? Nah... that'd be reasonable!
    By Eric in forum On Two Wheels
    Replies: 16
    Last Post: 07-27-2010, 04:14 PM
  2. Replies: 13
    Last Post: 05-28-2008, 04:15 PM
  3. Replies: 0
    Last Post: 03-08-2008, 07:31 AM
  4. DC Auto Show coverage
    By Eric in forum Motor Mouth
    Replies: 0
    Last Post: 01-21-2008, 09:08 AM
  5. Replies: 4
    Last Post: 08-17-2007, 10:28 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •