When to buy Car extended warranty ?

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dm200
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Re: When to buy Car extended warranty ?

Post by dm200 » Fri Nov 08, 2019 2:22 pm

My opinion and general conclusion is that such extended warranties never (perhaps rarely 'almost never') make financial sense at the time of purchase.

I am sure, though, that with 20/20 hindsight there are many cases where it would have made sense - but I do not believe those cases can be identified in advance. I believe, overwhelmingly, the folks who write and price these warranties are much "smarter" than almost all of us to price them to minimize any losses they might incur.

Jack FFR1846
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Re: When to buy Car extended warranty ?

Post by Jack FFR1846 » Fri Nov 08, 2019 2:47 pm

Galaxy8 wrote:
Thu Nov 07, 2019 8:36 am
As a Subaru owner still under factory warranty, I would happily take the referral. :sharebeer
Contact Dave at Mastria Subaru in Massachusetts. Very straight forward. He emails a matrix with coverage and cost.
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dm200
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Re: When to buy Car extended warranty ?

Post by dm200 » Fri Nov 08, 2019 2:55 pm

I always find it "interesting" that the car sales guys/gals really pitch how reliable the car is - until they make the sale. Then, the F&I guy/gal then gives a big pitch of why you need to spend a lot for a warranty to protect you when the car has problems.

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Stinky
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Re: When to buy Car extended warranty ?

Post by Stinky » Fri Nov 08, 2019 3:24 pm

sk2101 wrote:
Fri Nov 08, 2019 1:07 pm
Do you think that the actuaries making warranty calculations distinguish between a C Class and a C63?
Yes.

“Big data” allows finer and finer analysis of claims. And premiums are set based on claims.
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JackoC
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Re: When to buy Car extended warranty ?

Post by JackoC » Fri Nov 08, 2019 6:24 pm

Ependytis wrote:
Thu Nov 07, 2019 12:57 pm
Product warranties are just insurance in case the product fails. Like all insurance it only makes sense to protect you from a catastrophic loss. After all the insurance company wouldn’t offer it unless they could make a profit. A car repair is not considered a catastrophic loss and if I did consider it a catastrophic loss I probably couldn’t afford the car to begin with.
I think so generally. But for example I still have collision/comprehensive on my 2018 BMW M2. It's not that I literally could not afford to replace it if I ran it off the road and totalled it. It's partly peace of mind. I realize it doesn't fully make sense in insurance theory. OTOH I don't have an extended warranty, and I'll probably drop the collision coverage soon. If it has a 'very' expensive repair after warranty I'll take it to my BMW independent mechanic, who I've come to put reasonable trust in, and pay what it costs to fix it. But I wouldn't say somebody was crazy to get an extended warranty. Depends on the price though. While recognizing they aren't likely to sell the warranty for less than it's worth.

Also some people IMO have an exaggerated view of how much car reliability varies by brand, and the relative position of various brands. BMW doesn't come out badly at all in reliability (not the same as thing cost of repair) per say CR data (though which doesn't include M cars, again I'll just live with it, great car, love it, if I needed to minimize spending I wouldn't have bought it; my 'regular' BMW has been problem free though, now well past warranty). I had a bad experience with a Mercedes though (a 2000 E I bought new) which was not also not *cost* of repair, it was reliability, continual minor/medium electronics related problems.

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dm200
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Re: When to buy Car extended warranty ?

Post by dm200 » Sat Nov 09, 2019 2:36 pm

For the most part (perhaps 100%), extended warranties are very profitable for the sellers of them - and, often, the guys/gals doping the selling receive significant commissions or financial incentives.

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