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Thread: Should You Buy That Extended Warranty?

  1. #1
    Vulture of The Western World Eric's Avatar
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    Should You Buy That Extended Warranty?

    Should you buy an extended warranty along with your next new car? The answer is, maybe. Before you come to any decision, you should consider the following points:

    * Be sure you're clear about the different types of new car warranties.

    All new vehicles come with a so-called "basic" or comprehensive warranty that covers pretty much everything from the cigarette lighter to the sunroof - plus a secondary "powertrain" warranty that often lasts longer, but which typically only covers a few major components such as the engine, transmission and axle/transaxle. An extended warranty typically picks up after the basic or powertrain coverage runs out, extending the coverage by an additional period of months/total mileage.


    * Some new cars come with factory warranties are much better than others - making an extended warranty less necessary.

    There are several manufacturers who currently offer basic, or "comprehensive" warranties that last as long as five years or 60,000 miles and powertrain coverage that lasts as long as 10 years or 100,000 miles - compared with some others whose basic warranties run out in as few as three years and 36,000 miles - and powertrain coverage that's only good for five years or 60,000 miles.

    If a manufacturer's new car warranty coverage is extremely comprehensive and long-lasting - and especially if you are pretty sure you'll be trading in the car before the coverage runs out - an extended warranty might be a needless extra expense. On the other hand, if the factory warranty will run out years before you plan to sell or trade-in the vehicle, it might be a wise decision to take out the extra coverage, particularly for major components such as the engine and transmission.

    A new/rebuilt transmission can easily cost $2,000 or more; a replacement engine two or even three times that amount. While such major failures are not commonplace, they can and do occur. The "up front" cost of the extended warranty is almost always less than the "down the road" cost of a major repair.

    Weigh the cost of any potential repair against the cost of the extended warranty coverage - and consider both in the context of how long you plan to keep the car vs. how long the factory warranty coverage will last.

    Also take into account that the new car warranty coverage's allowable mileage may run out before the stated time interval - depending on how far you drive each year. For example, if you drive 15,000 miles annually, a factory three-year/36,000 mile basic warranty could run out in just over two years instead of three. Keep this in mind as you consider whether to purchase the additional coverage an extended warranty provides.

    * Some brands/models of car are better-built than others.

    Though new car quality is much better now than it has ever been - and specifically, there's much less disparity between import brand and domestic built cars - it's still true that some brands (generally) and some models (specifically) are more trouble-prone than others. Or have specific components that have more problems than average.

    The decision to buy an extended warranty or not is basically a matter of evaluating the odds you'll need the coverage - based on the recent track record of the brand of car (and specific model) you are considering.

    Check Consumer Reports buyer's guides for their recommendations; review JD Power & Associates customer satisfaction surveys - and check the manufacturer's record for recalls and defects by surfing the National Highway Traffic Safety Adminsitration's web site at www-odi.nhtsa.dot.gov/cars/problems/recalls. You may also want to check Internet owner's groups and online bulletin boards for any hint of potential problems with the car you're looking at that haven't yet percolated to the surface or been acknowledged by the manufacturer or investigated (yet) by NHTSA.

    * Some extended warranties are good; others not so good.

    Before you sign anything, be sure you carefully read and understand the terms of the coverage offered - in particular, any exclusions or limitations that could provide an "out" in the event you need to file a claim. Sometimes, for example, the warranty will specify that all recommended service work must be performed at an "authorized" dealer (as opposed to an independent shop or by the do-it-yourselfer) for coverage to remain in effect. You may need to provide receipts/invoices (with dates) for any and all related work that was done - including things like routine oil changes.

    Be wary of extended warranties not backed by the vehicle manufacturer (GM, Ford, etc.). While so-called "independent" or third-party warranties may be legitimate, it's also possible the issuing company may not exist several years down the road. A major automaker like GM or Ford, on the other hand, is not apt to disappear - and more likely to honor its commitments.

    * For used cars, an extended warranty offers more than just coverage.

    While you may never have a problem, for some buyers, knowing "up front" that if a problem does develop, the cost of the repair will be covered under the warranty can be well worth the additional expense of purchasing the extended warranty. If you know the car was regularly serviced - or that it's a make/model of car known for better-than-average reliability - you may decide to skip the extended warranty, since the odds are in your favor. But if you don't know the car's service history, or it's a make/model that has been known to have some problems, having that extra margin of coverage can be worth every penny - especially if it helps you feel better about your purchase.

    Finally, remember that you can haggle with the dealer on an extended warranty as a condition of sale or part of the deal - just as you might an extra-cost option like air conditioning or a sunroof. This goes for new as well as used vehicles. It can't hurt to ask - and getting them to throw in an extended warranty could be worth a lot more to you down the road than an upgraded stereo system or alloy wheels.

    (First appeared in Bottom Line Perosnal Finance)


  2. #2
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    Re: Should you buy thatextended warranty?

    Good advice on those aftermarket warranty companies. I got burned by "Warranty Gold" when they went out of business in 2002. I was thoroughly pissed. It was supposed to last 100,000 miles. I didn't get jack out of them. Never again.

  3. #3
    Vulture of The Western World Eric's Avatar
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    Re: Should you buy thatextended warranty?

    Quote Originally Posted by swamprat
    Good advice on those aftermarket warranty companies. I got burned by "Warranty Gold" when they went out of business in 2002. I was thoroughly pissed. It was supposed to last 100,000 miles. I didn't get jack out of them. Never again.
    Thanks - and believe me, I have been told some awful stories about these things...!

  4. #4
    mrblanche
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    Re: Should you buy thatextended warranty?

    I have bought one extended warranty in my life, and I got my value out of it the week after I bought it. I guess you could call me prescient, right?

  5. #5
    D_E_Davis
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    Re: Should you buy thatextended warranty?

    Like Mike I bought just one extended warranty, and I lucked out. At less than 1000 miles before the end of coverage the engine died, and I received a replacement engine for just the cost of lubricants and shop supplies.


  6. #6
    Senior Member J. ZIMM's Avatar
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    Re: Should you buy thatextended warranty?

    I enjoyed reading the artical about extended warrenties, And consumers guides and all that. But i have to sayfirst of all, the guide that gave a vehicle a very high rating, base upon past performance, turned out to be the worst piece of crap i have ever bought. And I could have bought a real nice luxury car for what this truck cost. I have had a problem with the front end from day one. I took it into the dealership, and the said they found the problem and, so they said, fixed it. Down the road, within a 1000 miles, the problem came back. Now since they had allready "fixed" the front end, the dealer would not refix the fix. And this kept going on untill the day after the warrenty ran out. Now after every time I took the truck in to have some thing "fixed" on it, I would say something about the front end like "I wish you guys would find what is wrong with this thing". And I would fill out the little service card and send it in with my thoughts. And did I mention that the day after the warrenty expired, they all of a sudden "found" over $600.00 worth of stuff that needed to be replaced? You see they could'nt take me in the day before.So I got to chew on some lame ones for a while. (With my attorney waiting in the wings.) When all the dust settled I did get the front end fixed, which only lasted about 5000 miles. So no wonder the foreign makes are tromping the hell out the domestic brands. You keep hearing to buy American, but when they can't deliver,you go elsewhere. Now for extended warrenties. I bought one. According to them and their liturature, they covered everything, bumper to bumper, top to bottom, everything but tires. Sounded good, so I bit. Everything is ok till the a/c went belly up. Found out they don't pay for finding the problem. I had to do that. Then once the problem was found, I ended up paying for that, after the tech hung on the phone for about two hours.I also found out that they do not replace brake rotors like the contract said. Seems that they have to have certain repair shops do that kind of work. And would you belive, that shop is no where near here. So I guess the bottom line is, no I will not buy another FORD, or any other domestic untill the domestics figure it out that what they're building is junk. And for extended warrenties, i'll take my chance. I've had to pay for it anyway, so why pay someone else, when I end up having to pay anyway? ....just a thought....thanks

  7. #7
    Vulture of The Western World Eric's Avatar
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    Re: Should you buy thatextended warranty?

    Sorry to hear you got burned; it's bad business to refuse to honor the warranty - or try to dodge honoring it, as they apparently did to you. The end result is the customer feels (rightly) ripped off - and the automaker loses a buyer, often forever.

    It's a big part of the reason why Ford, GM and Chrysler lost half their market share... .

    As an aside: I have been very happy with my Nissan truck. The thing is now ten years old and has about 110,000 miles on it. Never had a single problem with it beyond basic upkeep such as brake work and oil changes, etc. It still runs like new. Can't say enough good things about it....

  8. #8
    Senior Member Ken's Avatar
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    Re: Should you buy thatextended warranty?

    Quote Originally Posted by Eric
    Sorry to hear you got burned; it's bad business to refuse to honor the warranty - or try to dodge honoring it, as they apparently did to you. The end result is the customer feels (rightly) ripped off - and the automaker loses a buyer, often forever.

    It's a big part of the reason why Ford, GM and Chrysler lost half their market share... .

    As an aside: I have been very happy with my Nissan truck. The thing is now ten years old and has about 110,000 miles on it. Never had a single problem with it beyond basic upkeep such as brake work and oil changes, etc. It still runs like new. Can't say enough good things about it....
    Wow, you are luckier with your Nissan than I am with my Toyota. 107,000 miles on the clock and already I have had to replace a water pump and front discs and now, to my horror, I can hear a faint rattle from the back on very bumpy roads which souonds like a suspension bush might need replacing. Is there no end to these expenses?

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

  9. #9
    Vulture of The Western World Eric's Avatar
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    Re: Should you buy thatextended warranty?

    Quote Originally Posted by Ken
    Quote Originally Posted by Eric
    Sorry to hear you got burned; it's bad business to refuse to honor the warranty - or try to dodge honoring it, as they apparently did to you. The end result is the customer feels (rightly) ripped off - and the automaker loses a buyer, often forever.

    It's a big part of the reason why Ford, GM and Chrysler lost half their market share... .

    As an aside: I have been very happy with my Nissan truck. The thing is now ten years old and has about 110,000 miles on it. Never had a single problem with it beyond basic upkeep such as brake work and oil changes, etc. It still runs like new. Can't say enough good things about it....

    Wow, you are luckier with your Nissan than I am with my Toyota. 107,000 miles on the clock and already I have had to replace a water pump and front discs and now, to my horror, I can hear a faint rattle from the back on very bumpy roads which souonds like a suspension bush might need replacing. Is there no end to these expenses?

    Ken.
    Well, Toyotas are not what they were, unfortunately!

    But a water pump replacement at 107k doesn't strike me as particularly bad; these often need to be swapped out at around 70,000 miles or so. And it's a fairly easy job to do - and not especially expensive. Now, the front discs may have been ruined by someone overtorquing your lugs nuts. That is a fairly common problem. The suspension bushing ought to be an easy fix; might just be the busing in the rear anti-roll bar, which can be R&R'd in about 15 minutes with basic hand tools...

  10. #10
    Senior Member Ken's Avatar
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    Re: Should you buy thatextended warranty?

    Quote Originally Posted by Eric

    Well, Toyotas are not what they were, unfortunately!

    But a water pump replacement at 107k doesn't strike me as particularly bad; these often need to be swapped out at around 70,000 miles or so. And it's a fairly easy job to do - and not especially expensive. Now, the front discs may have been ruined by someone overtorquing your lugs nuts. That is a fairly common problem. The suspension bushing ought to be an easy fix; might just be the busing in the rear anti-roll bar, which can be R&R'd in about 15 minutes with basic hand tools...
    OK, I confess, I did post with my tongue firmly in my cheek. The pump was just fair wear and tear. The discs, well the warping might just have been caused by by lots of exuberant left foot braking on our lovely flat winding roads whilst driving on my own, with Diane on board I am the sedate country gentleman and hardly ever go over ninety. My mech will sort the suspension out next week when he has the car in for its next service, (the days when I ran a service business and did all my own car maintenenace are long gone) you're probably correct, the nearside A-RB bush is a very likely suspect in this case.

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

  11. #11

    Re: Should you buy thatextended warranty?

    Back when I had my miata, I developed a problem with the coil-packs - it caused a misfire condition which eventually destroyed my catalytic converter. Mazda refused to cover the catalytic converter, because I had already replaced the coil-packs on my own, and they decided that it was due to my aftermarket air intake (despite the fact that the air intake went on after the cat had already gone, and I had receipts from mechanics to prove it)
    '06 Lotus Elise, '07 Saturn Sky Redline

  12. #12
    Vulture of The Western World Eric's Avatar
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    Re: Should you buy thatextended warranty?

    Quote Originally Posted by damen
    Back when I had my miata, I developed a problem with the coil-packs - it caused a misfire condition which eventually destroyed my catalytic converter. Mazda refused to cover the catalytic converter, because I had already replaced the coil-packs on my own, and they decided that it was due to my aftermarket air intake (despite the fact that the air intake went on after the cat had already gone, and I had receipts from mechanics to prove it)
    Apparently, that is fairly common - and so DIY repairs (and aftermarket parts) can leave you in the lurch as far as coverage goes if something does break - and even if it had nothing to do with the DIY work/aftermarket parts.

    They can also nail you simply for not using their brand oil/filters - and having receipts to prove you did the work at the specified interval and with the specified parts.




  13. #13
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    Re: Should you buy thatextended warranty?

    I bought the extended warranty when I had the Jetta GLX, and I lucked out (so to speak) as I needed to use it a couple of times:

    1. The driver's airbag went bad. A repair which would have cost $800 was only $25.
    2. One of the knock sensors went bad on the engine block. A repair which would have cost $300 was only $25.

    Of course, the fact that I paid $1200 for the warranty and only got $1100 of benefit out of it is irrelevant...

    Chip H.

    Former owner: 2012 Honda Civic LX, 2006 Honda Ridgeline RTL, 2000 Honda CR-V EX, 2003 MINI Cooper S, 1992 Honda Accord LX, 1999 Mercedes ML-320, 1995 VW Jetta GLX, 1991 Mercury Capri XR2, 1981 Mercury Zephyr, 1975 Chevrolet Impala

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