Is it ever worth purchasing an extended warranty for a vehicle?

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researcher
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by researcher » Thu Mar 26, 2020 1:31 pm

CobraKai wrote:
Thu Mar 26, 2020 12:05 pm
To answer your question, I did purchase it. To answer what would likely be your next question, I haven't had to use it yet. I did read the fine print. The warranty didn't cover an oil pan gasket issue that the dealer found when I went in for an oil change, which cost me $400 to fix.
Ouch.

This is one of the key reasons you should NOT buy an extended warranty.
There are too many things that can happen to a vehicle that are not covered under the warranty.

You'd be much better off keeping that $1800 in a MM account to pay for anything that might happen to your vehicle.
Instead, you gave it to an extended warranty company in hopes that future repairs might happen to be covered.

BH_RedRan
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by BH_RedRan » Thu Mar 26, 2020 1:58 pm

The whole logic of the Extended Warranty pitch has always escaped me.

First they sell you a car, during which the friendly salesman emphasizes over and over how reliable and trouble free his cars are, and what a wonderful product it is compared to the competition.
Reminds me of my last purchase, a new Subaru, a model in its second year. The sales person talked about how the engine and transmission were from other models and are proven reliable and how great Subaru reliability and value are as well as low cost to repair.

Then comes. "You're really going to want the extended warranty. It is $$$$, a good deal considering the cost of the car. Plus we do great service here."
Us: You just said the car is reliable, low cost to repair etc.
Him: Yeah but this is a fairly new model. Better safe than sorry. Great peace of mind. (paraphrasing)
Us: I think we'll just keep my money in savings and if something comes up we'll pay for it.
Him: Let me see if I can get the cost down, then quickly takes off without looking back.
Us: I'm a little amused at this point because this salesman has run through about a half dozen "sales guy" techniques on us. My wife is just pissed off.
Him: Eventually returning; OK, good news, the warranty is only $$$ AND we were able to get you some free oil changes thrown in.
Us: No, we don't want the extended warranty, thanks. Lets just talk about the price and delivery on the car. Also, you're going to have to knock off the doc fee.
Him: Oh. You really should blah blah blah. But let me go talk to ...
Us: We thank him, shake hands and leave.
(I left off a couple of iterations on the paperwork where he returned with only half the things we asked about addressed.)

Later my wife left a bad review, talked to the store manager to give feedback. We bought from a different dealer with no BS, a lower price and no wasted time.

But I digress. Extended warranties? Absolutely not. Not for me.

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JAZZISCOOL
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by JAZZISCOOL » Thu Mar 26, 2020 2:08 pm

I bought one just once a long time ago for a used (off lease) Audi A4 Turbo which turned out to be a huge lemon. :shock:

I had to replace 2 engines in it so the extended warranty helped but I still had to pay a lot. In this case, I got my $'s worth. Switched car brands after that Audi experience.

YMMV.

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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by Ben Mathew » Thu Mar 26, 2020 4:37 pm

hameshatumkochaha wrote:
Wed Mar 25, 2020 10:27 pm
Ben Mathew wrote:
Mon Jan 21, 2019 12:58 pm
We typically don't buy the extended warranty. But for our last car (2015 Subaru Forester), when we said no, they just kept reducing the price to some very low number, until we said yes. I can't remember what the final amount was was. But I would guess something like half the original price. Still don't know if it was a good deal (didn't try to calculate odds of needing it etc.), but it was at a price much below sticker. That makes me think the sticker price is way overpriced, if they have that much room to cut.

Was this negotiation during the car purchase or after purchasing the car?
Our negotiation was during the original purchase transaction, after the price of the car had been nailed down and it was paperwork time.

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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by abuss368 » Thu Mar 26, 2020 6:58 pm

Sandtrap wrote:
Thu Mar 26, 2020 8:26 am
Depends on the car.
Toyota Corolla: no
Honda Civic: no
Geo Metro: yes
Chevrolet Vega: yes

j🌺
My wife's car back in the college days: A Geo Metro. 3 cylinders and $6.00 to fill the tank. 4 new tires cost $20 each for $80 in total!
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CobraKai
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by CobraKai » Thu Mar 26, 2020 7:44 pm

researcher wrote:
Thu Mar 26, 2020 1:31 pm
CobraKai wrote:
Thu Mar 26, 2020 12:05 pm
To answer your question, I did purchase it. To answer what would likely be your next question, I haven't had to use it yet. I did read the fine print. The warranty didn't cover an oil pan gasket issue that the dealer found when I went in for an oil change, which cost me $400 to fix.
Ouch.

This is one of the key reasons you should NOT buy an extended warranty.
There are too many things that can happen to a vehicle that are not covered under the warranty.

You'd be much better off keeping that $1800 in a MM account to pay for anything that might happen to your vehicle.
Instead, you gave it to an extended warranty company in hopes that future repairs might happen to be covered.
You're probably right, although it's still under warranty for a few more years. Time well tell. With my luck, I probably won't need to use it. If I didn't buy it, then I would likely end up with major repairs.

stevelion
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by stevelion » Thu Mar 26, 2020 8:16 pm

I think of this way...warranties must pay out significantly less than they take in otherwise the product wouldn't exist as no one is going to sell a product that loses money long term. Yes, you will often hear anecdotal stores of warranties paying out for individuals, but you will rarely hear stories of likely countless more people that "wasted" their money on a warranty; people like to describe their wins not their loses. Ignore the stories.

If you live 85 years and never buy an extended warranty for a car, home, electronic device, or anything else, you are more than likely going to "win." Invest the money you would have spent on the warranty and when the days comes and you have a big repair bill, you'll have the money to pull from your savings.

Finally, these extended warranty companies are often terrible when it comes to paying out by imposing complex terms that limit payment or requiring "pain and suffering" on your part to get the payment. e.g. long hold times, transferred calls, paperwork, declined coverage, etc. You're just buying a headache.

beastykato
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by beastykato » Fri Mar 27, 2020 3:44 am

researcher wrote:
Thu Mar 26, 2020 8:44 am
beastykato wrote:
Thu Mar 26, 2020 4:01 am
$750 for bumper to bumper 100k/7 with $0 deductible. Yes, it's well worth it. That's such a small amount of money I easily got my value out of that over 7 years.
You didn't get anywhere close to 7 years of coverage from your extended warranty...
- Your Honda came with a 5yr/60K mile powertrain and 3yr/36K mile B2B warranty.
- So what you got was 2yr/40K powertrain and 4yr/64K mile B2B coverage.

What types of covered repairs did you have during the relatively small window of time (after the factory warranty & before the extended warranty expiration)?
Sunroof got hung up and something on track broke, passenger heated seat element, passenger heated mirror, engine rebuild and tow (vcm lawsuit luck or warranty). Lawsuit didn't cover rental so I made them cover on warranty.

One petty repair can be $750 with labor,...

IMO if you negotiate it as low as I did it's well worth the risk. I see them for $2000+ and would absolutely never pay that.

researcher
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by researcher » Fri Mar 27, 2020 8:23 am

beastykato wrote:
Fri Mar 27, 2020 3:44 am
Sunroof got hung up and something on track broke, passenger heated seat element, passenger heated mirror, engine rebuild and tow (vcm lawsuit luck or warranty). Lawsuit didn't cover rental so I made them cover on warranty.

One petty repair can be $750 with labor,...

IMO if you negotiate it as low as I did it's well worth the risk. I see them for $2000+ and would absolutely never pay that.
So all of this happened within the 4 year window after the factory B2B warranty expired?
If so, that is extremely abnormal.

For reference, I've had 4 vehicles that were owned for 10+ years and 150K+ miles.
None of them required ANY covered repairs over the course of 10 years/125K miles.

If you consistently have such incredibly bad luck with vehicles, then you are certainly a prime candidate for these extended warranties. For most, it would be a complete waste of thousands of dollars over the course of several vehicle purchases.

alfaspider
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by alfaspider » Fri Mar 27, 2020 10:17 am

Sandtrap wrote:
Thu Mar 26, 2020 8:26 am
Depends on the car.
Toyota Corolla: no
Honda Civic: no
Geo Metro: yes
Chevrolet Vega: yes

j🌺
I'm not sure you want to do business with any company that would warranty a car that hasn't been made in nearly 35 years :shock:

The times when you want an extended warranty are not crappy cars like the Geo metro. Those cars may be of poor quality, but parts are dirt cheap and the cars are easy to work on. You could replace a motor in a Geo metro for $250 in junkyard parts and a day of labor.

Where you want a warranty is on cars where there is potential extremely expensive repairs, you are keeping the car a long time, AND where the warranties on such cars are priced reasonably. Examples include a McLaren MP12c ($3-4k a year for a warranty and some go through $30k transmissions every few years), Ford GT350 (the voodoo motors cost $20k+ and are relatively prone to total failure), Mercedes AMG S class (car will be worth more than many repairs within 4-5 years).

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Sandtrap
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by Sandtrap » Fri Mar 27, 2020 10:21 am

alfaspider wrote:
Fri Mar 27, 2020 10:17 am
Sandtrap wrote:
Thu Mar 26, 2020 8:26 am
Depends on the car.
Toyota Corolla: no
Honda Civic: no
Geo Metro: yes
Chevrolet Vega: yes

j🌺
I'm not sure you want to do business with any company that would warranty a car that hasn't been made in nearly 35 years :shock:

The times when you want an extended warranty are not crappy cars like the Geo metro. Those cars may be of poor quality, but parts are dirt cheap and the cars are easy to work on. You could replace a motor in a Geo metro for $250 in junkyard parts and a day of labor.

Where you want a warranty is on cars where there is potential extremely expensive repairs, you are keeping the car a long time, AND where the warranties on such cars are priced reasonably. Examples include a McLaren MP12c ($3-4k a year for a warranty and some go through $30k transmissions every few years), Ford GT350 (the voodoo motors cost $20k+ and are relatively prone to total failure), Mercedes AMG S class (car will be worth more than many repairs within 4-5 years).
+1
Agreed. Good points.
DW and I have been shopping for a new car. They are like iPads on Wheels. Costly repairs indeed.

j :happy
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Laker1
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by Laker1 » Fri Mar 27, 2020 10:22 am

German cars, yes...Jag...HELL YES...Italian Car..Even more yes...Korean or Japan made..no...American..Model specific. Electronics are the nightmare...Just my himble opinion of the guy on the end of the wrench. I never buy warranties as I only drive Hondas, older Landcruisers or older Jeeps...

Laker1
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by Laker1 » Fri Mar 27, 2020 10:28 am

alfaspider wrote:
Fri Mar 27, 2020 10:17 am
Sandtrap wrote:
Thu Mar 26, 2020 8:26 am
Depends on the car.
Toyota Corolla: no
Honda Civic: no
Geo Metro: yes
Chevrolet Vega: yes

j🌺
I'm not sure you want to do business with any company that would warranty a car that hasn't been made in nearly 35 years :shock:

The times when you want an extended warranty are not crappy cars like the Geo metro. Those cars may be of poor quality, but parts are dirt cheap and the cars are easy to work on. You could replace a motor in a Geo metro for $250 in junkyard parts and a day of labor.

Where you want a warranty is on cars where there is potential extremely expensive repairs, you are keeping the car a long time, AND where the warranties on such cars are priced reasonably. Examples include a McLaren MP12c ($3-4k a year for a warranty and some go through $30k transmissions every few years), Ford GT350 (the voodoo motors cost $20k+ and are relatively prone to total failure), Mercedes AMG S class (car will be worth more than many repairs within 4-5 years).
My observation of the Ford Voodoo motors is if they are driven correctly, like the Coyote they are fine. MOST damage in those cars are driver induded failure. And I might add it is a BLAST to drive the wheels off those cars...I service many of these for some of my clients...expert maintence is a must for toys.

alfaspider
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by alfaspider » Fri Mar 27, 2020 10:33 am

Laker1 wrote:
Fri Mar 27, 2020 10:28 am
alfaspider wrote:
Fri Mar 27, 2020 10:17 am
Sandtrap wrote:
Thu Mar 26, 2020 8:26 am
Depends on the car.
Toyota Corolla: no
Honda Civic: no
Geo Metro: yes
Chevrolet Vega: yes

j🌺
I'm not sure you want to do business with any company that would warranty a car that hasn't been made in nearly 35 years :shock:

The times when you want an extended warranty are not crappy cars like the Geo metro. Those cars may be of poor quality, but parts are dirt cheap and the cars are easy to work on. You could replace a motor in a Geo metro for $250 in junkyard parts and a day of labor.

Where you want a warranty is on cars where there is potential extremely expensive repairs, you are keeping the car a long time, AND where the warranties on such cars are priced reasonably. Examples include a McLaren MP12c ($3-4k a year for a warranty and some go through $30k transmissions every few years), Ford GT350 (the voodoo motors cost $20k+ and are relatively prone to total failure), Mercedes AMG S class (car will be worth more than many repairs within 4-5 years).
My observation of the Ford Voodoo motors is if they are driven correctly, like the Coyote they are fine. MOST damage in those cars are driver induded failure. And I might add it is a BLAST to drive the wheels off those cars...I service many of these for some of my clients...expert maintence is a must for toys.
The voodoo motor is a subject of debate to be sure. People also insist that Wankel motors (i.e. RX-8) can be reliable and that early failures were the result of improper maintenance. But the fact remains that the vast majority didn't make it past 100k miles. I agree that GT350s are generally fantastic cars.

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Artful Dodger
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by Artful Dodger » Fri Mar 27, 2020 11:50 am

When we bought our 2003 Audi off the lease i ponied up for the extended warranty, and it more than paid off - probably double what we paid. One other useful thing I learned was dealer shop prices were negotiable. I learned this when the bill charge for some service was around $2200, but the warrenty only would pay $1700. Since they sold me the warranty, they just reduced the bill to what they were getting reimbursed. After the warranty expired, I was always able to negotiate something off their repair bill.

We bought a 2019 Subaru Forrester this past August. I checked online for the Subaru manufacturer extended warranty and was seeing costs at $2500-$3200, and was just going to forego it. When we bought the car, the finance person said they sold their warranty (the regular Subaru package accepted at all dealers) for $50 over their cost, so extending the 3 year / 36k mile plan to 7 years / 100k miles was $1050. I bought it.

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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by whodidntante » Fri Mar 27, 2020 12:33 pm

alfaspider wrote:
Fri Mar 27, 2020 10:33 am
The voodoo motor is a subject of debate to be sure. People also insist that Wankel motors (i.e. RX-8) can be reliable and that early failures were the result of improper maintenance. But the fact remains that the vast majority didn't make it past 100k miles. I agree that GT350s are generally fantastic cars.
Yep, reports are all over the map.

I drive a Coyote with a manual transmission, and I've been very hard on the car with numerous road track and dragstrip days and spirited driving. I do heel-toe to reduce drivetrain shock on road tracks and although I've redlined the engine hundreds of times, the engine has never seen overspeed. I also dump the oil after a vigorous track day, or at least before the cold weather starts. I've been expecting problems to come up, but so far nothing has gone wrong.

My impression is that Ford builds a robust performance car. I wouldn't run the car flat out for more than 20 minutes due to heat management issues, but that's true of basically any car that isn't a race car. Track days tend to be 20 minutes on, 40 minutes off, rinse and repeat, so this is not an issue. I do not race the car.

beernutz
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by beernutz » Fri Mar 27, 2020 12:56 pm

I am over 60 and bought my first extended warranty ever and so far have no regrets though it hasn't yet paid for itself and I'm fine if never does.

I bought a 2015 certified Ford F-150 Platinum last year and also bought the Ford PremiumCare extended warranty. I had every intention of saying no to the finance guy as I've done for every other of the probably 20 vehicles I've bought, but because this vehicle has about $18,000 just in electronics I relented. It helped that I said, can you do better than that?, a couple of times and I think got the best deal I was going to get from him that day.
Last edited by beernutz on Sat Mar 28, 2020 5:27 am, edited 1 time in total.

beastykato
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by beastykato » Fri Mar 27, 2020 3:42 pm

researcher wrote:
Fri Mar 27, 2020 8:23 am
beastykato wrote:
Fri Mar 27, 2020 3:44 am
Sunroof got hung up and something on track broke, passenger heated seat element, passenger heated mirror, engine rebuild and tow (vcm lawsuit luck or warranty). Lawsuit didn't cover rental so I made them cover on warranty.

One petty repair can be $750 with labor,...

IMO if you negotiate it as low as I did it's well worth the risk. I see them for $2000+ and would absolutely never pay that.
So all of this happened within the 4 year window after the factory B2B warranty expired?
If so, that is extremely abnormal.

For reference, I've had 4 vehicles that were owned for 10+ years and 150K+ miles.
None of them required ANY covered repairs over the course of 10 years/125K miles.

If you consistently have such incredibly bad luck with vehicles, then you are certainly a prime candidate for these extended warranties. For most, it would be a complete waste of thousands of dollars over the course of several vehicle purchases.
Yes, it was all after the expiration. I'd argue that things are far more likely to break as they age statistically. And I don't think I had "bad" luck with this car at all. It's been very reliable other than the VCM which caused the engine failure.

That was a catastrophic event that Honda had to pay for anyway due to that lawsuit. Now I've got a rebuilt engine and have disabled the VCM on my own... So knock on wood it's gonna be good for another 8 years.

The other stuff were just a couple heating elements and the track getting hung up. The point is though that IMO that $750 was a very small price when labor plus a $200-300 part can easily reach that total on a single basic repair.

Now there is still a lot of truth in this thread. I will only buy a ext warranty if I knock the price way down, I will only buy direct from manufacturer like HondaCare with clear and concise terms, and I'd never touch a 3rd party warranty from anyone or the dealer.

I think they make most their money from the people afraid to ask to pay less for them. I've used it as a tool after negotiating. Where I had the whole deal worked out and asked for the warranty at the end or refused to sign. Honda dealer refused then I said, "Well, I'll just go down to Hyundai where 10/100k comes standard then." And they agreed shortly after. Don't be afraid to ask WAY less than the asking price if you do get a warranty or you probably are getting hosed.

EDIT:. I forgot to mention HondaCare is partially refundable as well if you do not use the warranty, if I recall correctly. Don't quote me on the exact terms, but I do believe this is correct.

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wander
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by wander » Fri Mar 27, 2020 3:52 pm

It maybe worth it for some people, but I never spent money on extended warranty for a vehicle.

Laker1
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Re: Is it ever worth purchasing an extended warranty for a vehicle?

Post by Laker1 » Sat Mar 28, 2020 8:58 am

Electronics have changed the need for lots of people. As we make engines smaller and electronics bigger it is just going to get worse.

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