Extended warranty/service plans

[mcc63303]

Yes, but we’re required to buy home, medical, & car insurance (up to a certain point), and as you pointed out, the insurance companies usually come out WAY ahead (ie 40 years of home owner’s insurance with no claims).

Insurance is intended to help pay for something you can’t afford if it happens (house fire, car wreck, death, medical emergency,…), and it’s generally a small premium for a big payout.

Most dealer warranties are a fairly sizable premium for a potentially small (or zero) payout. It really comes down to risk tolerance. Are you willing to risk a big expense or not?

Since the dealers know their vehicles likely won’t have many big problems, they offer the warranty. I’m just agreeing with their assessment that the truck won’t have many/any significant issues in the first 6 years and saving my money.

It's not the dealers that provide the warranty, it's the manufacturer. Dealer gets paid either way when a repair is made, either by owner or warranty provider. Trust me, dealer would rather have a warranty co. pay the cost of the repair rather than an upset/mad owner. It is all about risk tolerance, it's a gamble, sometime you win, sometime you lose. My question to you is, if you pay off your house mortgage are you going to pay for homeowners insurance then? ...
(ie 40 years of home owner’s insurance with no claims).

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[ClemsonU88]

It's not the dealers that provide the warranty, it's the manufacturer. Dealer gets paid either way when a repair is made, either by owner or warranty provider. Trust me, dealer would rather have a warranty co. pay the cost of the repair rather than an upset/mad owner. It is all about risk tolerance, it's a gamble, sometime you win, sometime you lose. My question to you is, if you pay off your house mortgage are you going to pay for homeowners insurance then? ...
(ie 40 years of home owner’s insurance with no claims).

If I pay off my house, I still keep the insurance, because I STILL can’t afford to replace it if there’s a house fire or hurricane.

 

[OTACORB]

I don't feel strongly either way on the issue. Everyone's situation is different. But believing that "they make a lot of money on them. That means customers lose a lot of money on them" is wrong headed. The same could be said about Home Insurance, Medical Insurance, Auto Insurance etc. It is the nature of the beast. In over 40 years of home ownership I have never had to place a claim. That doesn't mean I should not buy home insurance. It is the nature of the beast.

Finally someone with some sense on the matter! Thank you! These blanket statement from all these armchair mechanics and financial wizards. LOL.

I've had warranties that saved my ass and I've had others that at the end likely were not worth it. It's like anything else why does anyone get a warranty or insurance? Peace of Mind!

Also the person that says for the person paying $550 per month, should not buy the warranty and then just pay $500 per month and put $50 in savings. Clearly you've never lived pay check to pay check. That crap doesn't happen and it's foolish to even suggest it. If it's in the loan they pay it and it's there for them if needed.

So, my opinion is do what you feel is best for you and disregard 3/4 of the armchair mechanics and financial wizards.

 

[Kennis]

I work in the extended service plan (ESP) industry, albeit in the consumer appliance space and I can assure you that buying an extended service plan more often than not does not save you much if any money that planning and budgeting couldn't also achieve.

HOWEVER, if you are one of the unlucky people who require the use of their ESP multiple times (or maybe just once) it can pay for itself very, very quickly both monetarily and in peace of mind.

There is also the advantage of wrapping the cost of the ESP into your loan for the vehicle, essentially allowing someone who is either a poor saver or often financially strapped to be able to account for the inevitable repair cost of a vehicle and the knowledge that their vehicle can and will be fixed in nearly all instances and as quickly as possible.

I always buy the ESP with a vehicle because I absolutely need my vehicle to get myself and my wife to work in order to survive. I'm not a great saver or planner sometimes, it always seems something comes up and eats the entire nest egg. I appreciate the convenience of just not worrying about it

The decision to buy or not buy is a personal one and I'm sure depending on your circumstances and practices, either option may suit you.

 

[YazYaz]

Finally someone with some sense on the matter! Thank you! These blanket statement from all these armchair mechanics and financial wizards. LOL.

I've had warranties that saved my ass and I've had others that at the end likely were not worth it. It's like anything else why does anyone get a warranty or insurance? Peace of Mind!

Also the person that says for the person paying $550 per month, should not buy the warranty and then just pay $500 per month and put $50 in savings. Clearly you've never lived pay check to pay check. That crap doesn't happen and it's foolish to even suggest it. If it's in the loan they pay it and it's there for them if needed.

So, my opinion is do what you feel is best for you and disregard 3/4 of the armchair mechanics and financial wizards.

Bravo!

 

[ClemsonU88]

Finally someone with some sense on the matter! Thank you! These blanket statement from all these armchair mechanics and financial wizards. LOL.

I've had warranties that saved my ass and I've had others that at the end likely were not worth it. It's like anything else why does anyone get a warranty or insurance? Peace of Mind!

Also the person that says for the person paying $550 per month, should not buy the warranty and then just pay $500 per month and put $50 in savings. Clearly you've never lived pay check to pay check. That crap doesn't happen and it's foolish to even suggest it. If it's in the loan they pay it and it's there for them if needed.

So, my opinion is do what you feel is best for you and disregard 3/4 of the armchair mechanics and financial wizards.

I lived paycheck to paycheck for 25 years from the time my first daughter was born & my wife quit work to stay home until my 2nd daughter graduated college 3 years ago. Just because most people aren’t disciplined enough to put $50 aside doesn’t mean it’s not wise to do. Wouldn’t you agree?

Obviously people have to make decisions that are best for their family & situation. Obviously. Some people are spenders, and some are savers, but the whole point of forums is to share ideas. It’s good to hear different views (even dissenting views) don’t you agree?

Peace of mind comes from what you put your trust in. My trust is in something better than a vehicle warranty.

 

[NOLAguy]

REPOST- Ignore the facts if you want: 55 % of owners who purchased extended warranties hadnt used it for repairs for the lifetime of their car. And those who diduse it spent hundreds more for the coverage than they saved in repair cost (Consumer Reports)

 

[gman62]

REPOST- Ignore the facts if you want: 55 % of owners who purchased extended warranties hadnt used it for repairs for the lifetime of their car. And those who diduse it spent hundreds more for the coverage than they saved in repair cost (Consumer Reports)

55% of what and who? CR has hard data on every car buyer that has bought a warranty and how much they did and didnt spend? This is a meaningless stat.

 

[NOLAguy]

Seems clear to me

 

[NOLAguy]

Owners , which would be who, not what

 

[NOLAguy]

And to answer 2nd question, yes

 

[ConfusedMaverick]

Normally I'd advise to stay away from extended warranties but I'm seriously considering purchasing this. As a first year model vehicle, they historically have higher failure rates/issues that come up which are normally resolved in later years. Not to mention the battery alone would probably easily coat more than the plan.

 

[Mach 1]

The warranty is only as good as the technician thats making the repairs.

I own a F150 that has 60000m on it. I usually do all my repairs and maintenance on all my vehicles/home/land/tractors. The drivetrain warranty just expired. I have no less then 3 repairs that the dealership cant/wont/dont know how/cant even acknowledge the defects.

One is software, I cant fix that one, another is a howling differential.

They acknowledge the differential, but wouldnt repair it.

At purchase, I had the dealership try to sell me ESP, my credit union tried as well, they said roll it into the financing you will never notice the difference in price(yeah right).

My favorite line is, If I thought the vehicle was going to have problems I would not buy it.

 

[Chris_G]

Normally I'd advise to stay away from extended warranties but I'm seriously considering purchasing this. As a first year model vehicle, they historically have higher failure rates/issues that come up which are normally resolved in later years. Not to mention the battery alone would probably easily coat more than the plan.

The battery cable is around $500 plus labor.

 

[grumpyunk]

Not mentioned in the discussion so far, apparently, is that we now are having a lot of price increases across the board. The service contracts will be paying for any replacement parts at whatever the price is at the time. Given the current cost of some items, and factoring in the change due to inflation, it may be that the contracts are under-priced., I do not know.,
I have done almost all service and maintenance work on every vehicle I have owned. My newest vehicle besides the Maverick is a 2007 Mariner. I bought the service information DVD to assist in keeping it functioning. I cannot buy the same for the Maverick as it is not offered except as a subscription service, likely tailored for service personnel. That lack of information availability tends to limit what I can do.
Given inflation and my limited information, it has become less likely that I will be able to perform repairs as problems occur.
I accept that, given that aging is also inevitable, my capacity to perform repairs has diminished. I also do not have the equipment available to techs at a dealer. So given all that, an ESP seemed a reasonable buffer against future expenses. Given what it cost, any single repair required will likely pay for the contract. My circumstances seemed to make it a 'good idea' to have a bit of protection from a large outlay.
Everyone has their own particular set of conditions, and are welcome to make their own decision.
As an aside, each and every dealer has their own level of service and their own attitude towards customers. Some will provide service that makes you want to tell everyone about it - both bad and good. Some will make you favor returning to the same dealer for any future problems incurred. Independent shops are the same, and have no guarantee that their out the door will be lower or higher than the dealer.
As noted a bazillion times before: It pays to shop around.
tom

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