Extended Warranty - worth it?

[MetalThunder]

imo - it is pure phsycologicall warfare ...
YMMV

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[Tim d]

When I start worrying about a vehicle is when I sold it. 46 years of a 2 or 3 car driveway and have never needed a warranty. While still have my 1983 RX7, I dumped a Mitsubishi/Chrysler at 7 months because the trans was concerning me.
Add-on coverage plans can make people feel comfy and that’s fine. It should be considered part of your cost for the vehicle. An XL with an extended plan does not cost the same as without one.

Yup, one of my vehicles is 54 years old, I have owned it 35 years, its never needed an extended warranty.

 

[MaverickDragon]

Cars built back in the day were not as expensive to fix, nor do they have a tenth of the electronics in a current model.
I have a 2012 Subaru Forester without a warranty. I can buy a pair of new headlights for $250.
Headlights for the Maverick with a discount are $1200+ EACH. That's a difference of a factor of 10.

The risk / reward equation that made sense a decade or more ago has changed.

 

[gzebrick]

Cars built back in the day were not as expensive to fix, nor do they have a tenth of the electronics in a current model.
I have a 2012 Subaru Forester without a warranty. I can buy a pair of new headlights for $250.
Headlights for the Maverick with a discount are $1200+ EACH. That's a difference of a factor of 10.

The risk / reward equation that made sense a decade or more ago has changed.

Not just the expensive, proprietary parts are costing more, but the labor too. Buying an extended warranty today using 2026 dollars eliminates the guesswork of what the hourly labor rate / minimum charge will be for even relatively simple out-of-warranty repairs in 2030 and beyond.

 

[MaverickDragon]

@gzebrick
Great point. If you put the relatively low cost of the warranty into an account, you'd need a lot of luck to end up with funds to cover the potential cost of a large repair years from now.

 

[dochawk]

Ask ChatGPT for the right answer to your needs

And then go do research to see why it's wrong?


Anyway, I'm generally rabidly anti-extended warranty. It's generally one of the two worst insurance deals (the other being collision damage waiver on a rental car). "Worst" as in "lowest percentage of premium paid on claims."

I acknowledge two common exceptions:
1) a product that you couldn't afford to replace if it went bad, and
2) products nearly certain to go bad. On my final VCR, from Sears, I paid the fee on the $50 ($100?) machine, figuring it as part of the cost of having it around for two years. The first one failed fairly quickly, with its automatic tracking having drifted out of redcoverable range. Its replacement failed immediately--following the tape I'd been recording out of range! I insisted on a different brand for the replacement, and two of that failed. The fifth machine happened to last through a few years.

I've turned down AppleCare every time but once. I'm so far ahead of the game after 42 years that I could replace any top of the line machine and still be ahead. (The one time I had it was super-duper apple care on a program that let you swap phones every year. It paid, too: phone fell while I was up on a ladder, and fell face down on a screw!).

I've bought it on digital meat thermometers, as the probe leads always fail. (note to self: file claim on last set!).

However, on the maverick, buying it for a loaded Lariat hybrid (I think I got all the options but the Ugly Appearance Package), buying from Granger or Fleming (?) was about 5% of the purchase price--for a $0/10/100 policy with all the admins.

There are multiple fairly common repairs that cost more than the warranty, so I figured it made sense.

(realistically, I'll be surprised if we keep it that long--what are the chances of something shinier not coming out within 5 years???)

 

[babytruk]

Anyway, I'm generally rabidly anti-extended warranty. It's generally one of the two worst insurance deals (the other being collision damage waiver on a rental car). "Worst" as in "lowest percentage of premium paid on claims."

I remember when I was a kid that airport terminals were loaded with “flight insurance” kiosks. Eventually they went away once people started trusting air travel reliability.
Will people ever start trusting automobile reliability? The “average” life of a new car now (nearly) equals the life of the 70s Volvo 240 which held the record back then. If margins and P&L are the basics of business, an extended warranty should be affordable because recent reliability helps reduce the need for high cost parts. And no… they are not paying what you would for the same part.
Still… it’s all about trust and piece-of-mind.

 

[Art Vandelay]

Anyway, I'm generally rabidly anti-extended warranty. It's generally one of the two worst insurance deals (the other being collision damage waiver on a rental car). "Worst" as in "lowest percentage of premium paid on claims."

However, on the maverick, buying it for a loaded Lariat hybrid (I think I got all the options but the Ugly Appearance Package), buying from Granger or Fleming (?) was about 5% of the purchase price--for a $0/10/100 policy with all the admins.

I'm pretty much the same way. I mostly don't ever purchase extended warranties except for a few exceptions.

But the main thing here is like you said the price from a company like Granger makes these plans a no brainer in my opinion. I got the Ford premium ESP from Granger with 8 years of coverage for $1,375. For the same exact plan my local dealership wanted $3,200 and they would not budge on their price. In addition to that I had a lot of small issues with my Maverick in the first year of ownership so for $1,375 I think the gamble is worth it. I would not have gambled on the ESP plan the $3,200 that the local dealership was charging.

 

[Suzukiridr14]

If you keep cars less than 3 years and travel under 12K per year, the only benefit of an extended warranty would be the premium you could charge for selling a car to a privste party with whatever warranty extension you had. You could also buy it just prior to the factory warranty termination or offer to buy it for the soon to be new owner at their cost.

As far as an extended warranty being a good deal or not, statistics are historical, and the sad fact is that "they don't make them like they used to".

My warranty covers my Mav for 7 years and more mileage than I'll use at less than the cost of a headlight. That is not an exaggeration.
The entire assembly costs $1666.67 JUST FOR THE PART ON ONE SIDE...
At a discount it's a mere $1120 for one light, still more than my warranty cost.

How does that compare to replacing a headlight on a car a few years back..
Current vehicles are a multi-site computer network rolling on tires.
Parts are not repaired, they are replaced. It's a brave new world.

While historically, manufacturer extended warranties have made money, recent financials show a much different trend.
If you buy a warranty without shopping around, you can make money for the dealership, but unlike 3rd party warranties that are rife with caveats, inclusions, exclusions and denials of coverage, manufacturer backed warranties can be a good value if they are purchased at a good price, and it doesn't take more than a 3 year old headlight burning out to come out ahead.

Everyone thinking of getting an ESP, make sure you also get the light coverage also. Lights are not included with the ESP.. (About $50 additional)

 

[babytruk]

Everyone thinking of getting an ESP, make sure you also get the light coverage also. Lights are not included with the ESP.. (About $50 additional)

Why did you have to go and read the “fine print”?

 

[notfast]

In that regard, it's a lot like uninsured motorist insurance.

If you never had an accident, it was only a "feel good", but if a low life uninsured deadbeat driver puts you in the hospital, it was money well spent.

Uninsured also covers underinsured, which kicks in if someone has the state minimums. You could technically sue them, but if they have no assets, you're squeezing water from a rock even if you have a legal right to collect a settlement.

I have a 2012 Subaru Forester without a warranty. I can buy a pair of new headlights for $250.
Headlights for the Maverick with a discount are $1200+ EACH. That's a difference of a factor of 10.

I'm sure parts will get cheaper as the vehicle ages/tooling is paid off/aftermarket companies make cheaper replacements.

I remember when folks thought that polycarbonate halogen headlights were obtrusively expensive compared to good ole sealed beams you could buy at Walmart for $3.

Now much like yourself, I can buy a new aftermarket headlight for my Nissan Frontier for $50. Not quite $3, but considering how the headlight is proprietary to the Frontier and not one of three sealed beams on the shelf, I'd consider that a solid value.

I got the Ford premium ESP from Granger with 8 years of coverage for $1,375.

If that 8 years started at the time the warranty was purchased, I'd put that solidly in the "worth it" category. But if it runs concurrently with the other warranties, that's like, two more years past the powertrain warranty.

For the same exact plan my local dealership wanted $3,200 and they would not budge on their price.

Yeah that's definitely in the "I'd rather self-insure" category.

I had a lot of small issues with my Maverick in the first year of ownership so for $1,375 I think the gamble is worth it.

I suppose it depends on how much those small issues would've cost to repair out of warranty. I mean, I had a sun visor and the center console lid break when my car was still covered under the new vehicle limited warranty. For me, it wasn't worth the hassle to make an appointment at the dealership and wait there, so I just got junkyard parts on eBay shipped to my door and took the 5 minutes with a screwdriver to replace them.

 

[MaverickDragon]

I suppose it depends on how much those small issues would've cost to repair out of warranty.

For low cost and DIY items, a warranty may not apply, especially if you have a deductible.

Where it helps and the reason most folks would buy an extended warranty, would be for the big ticket, non powertrain items, and in any modern vehicle, there are lots of these.

The AC system, touch screen, entertainment, lighting, electronics modules,, brake systems, steering, windows, cameras, sensors and a long list of other expensive to repair / replace items is what makes the warranty worthwhile.

 

[gzebrick]

For low cost and DIY items, a warranty may not apply, especially if you have a deductible.

Where it helps and the reason most folks would buy an extended warranty, would be for the big ticket, non powertrain items, and in any modern vehicle, there are lots of these.

The AC system, touch screen, entertainment, lighting, electronics modules,, brake systems, steering, windows, cameras, sensors and a long list of other expensive to repair / replace items is what makes the warranty worthwhile.

Agreed. When I priced mine out (Grainger), I decided to go with the relatively low cost zero-deductible. , I'm now more likely to bring the truck in even for "minor" issues. I plan on keeping the Mav at least 10 years, so good to know as long as it's not in a wreck, I look to keep it as much like-new as I can.

 

[notfast]

The AC system, touch screen, entertainment, lighting, electronics modules,, brake systems, steering, windows, cameras, sensors and a long list of other expensive to repair / replace items is what makes the warranty worthwhile.

I guess it comes down to how risk-averse you are. I'm a bit concerned about the intelligent power distribution module in my Nissan Frontier because the specific version that mine uses isn't common and is also discontinued. So if the IPDM kicks the bucket, it could total the vehicle. But eh, I don't let that keep me up at night.

On the flipside, my Lexus GX470 has 350,000 miles and is all original except for regular maintenance items. Even has the original fuel pump, alternator, starter, wheel bearings, and CV axles. Literally everything still works, including the three-zone automatic climate control, auto-leveling air suspension, and navigation system with maps from the Bush administration.

I'm now more likely to bring the truck in even for "minor" issues. I plan on keeping the Mav at least 10 years, so good to know as long as it's not in a wreck, I look to keep it as much like-new as I can.

I think that's where our philosophies diverge. I'd rather take care of as much as I can myself on my own schedule. When I had a transfer case leak on my Frontier, I dye tested it, saw that it was leaking around the slip yoke, made an appointment at the dealership and basically told them my diagnosis and what it needed. Tech spent 10 minutes confirming my handiwork and ordered all the parts under warranty.

If the thing wasn't under warranty, I would've just taken the truck to a driveshaft shop and gotten a new driveshaft with greaseable U-joints and a slip yoke eliminator with a double cardan joint. Solve the problem for good rather than risk the slip yoke leaking again on the new OEM driveshaft assembly.

 

[gzebrick]

I guess it comes down to how risk-averse you are. I'm a bit concerned about the intelligent power distribution module in my Nissan Frontier because the specific version that mine uses isn't common and is also discontinued. So if the IPDM kicks the bucket, it could total the vehicle. But eh, I don't let that keep me up at night.

On the flipside, my Lexus GX470 has 350,000 miles and is all original except for regular maintenance items. Even has the original fuel pump, alternator, starter, wheel bearings, and CV axles. Literally everything still works, including the three-zone automatic climate control, auto-leveling air suspension, and navigation system with maps from the Bush administration.



I think that's where our philosophies diverge. I'd rather take care of as much as I can myself on my own schedule. When I had a transfer case leak on my Frontier, I dye tested it, saw that it was leaking around the slip yoke, made an appointment at the dealership and basically told them my diagnosis and what it needed. Tech spent 10 minutes confirming my handiwork and ordered all the parts under warranty.

If the thing wasn't under warranty, I would've just taken the truck to a driveshaft shop and gotten a new driveshaft with greaseable U-joints and a slip yoke eliminator with a double cardan joint. Solve the problem for good rather than risk the slip yoke leaking again on the new OEM driveshaft assembly.

Maintenance I do myself, but the days of shade-tree wrenching on the high-tech 2025s seem the be limited. I do enjoy the upkeep/repair/replacement work on my 91 Miata. Whenever I work on a car I tell my 11 yr old grandson, "if your knuckles ain't busted; you're not trying hard enough" - and of course always follow up with "The job isn't done until the tools are put away".

I'm making him a proper gearhead.

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