Granger Extended Warranty

[Glen Baker LLC]

If the finance arm of an auto manufacturer, is willing to let you use their money for free. You'd be stupid not to.

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[MaverickDragon]

The two basic cases in which an extended warranty makes sense are,
1) It's something that you couldn't afford to replace if it went out, and
2) the quality of the item is such that it's probably going to fail, and someone is fool enough to sell it (typically department store one-size-fits-all plans).

You are missing a resale case.
Would you rather buy a used vehicle with a warranty or not?
Regardless of your opinion on that, most people would prefer a warranty or no one would ever buy a certified pre-owned vehicle. With an extended warranty you can demand a premium and get it on a private party sale, and that can easily cover the cost of the warranty, essentially providing the buyer with a free insurance policy.

It's also not only about quality, as it's about a complex manufactured item that has a high volume of expensive to replace parts that can easily exceed the cost of the warranty, especially when it is purchased at a discount price through a dealer like Granger.
Even a Rolls Royce can have a module failure.

Your vcr example doesn't apply when the cost differences vary by orders of magnitude.
You could buy another vcr for less money several years later, but with a vehicle, it's the opposite.

A camera failure, screen failure or one of the many sensors or modules could easily exceed the warranty cost, which in my case was less than 3% of the vehicle cost.

That is very cheap insurance especially when compared to the liability and comprehensive policies.

 

[MaverickDragon]

If the finance arm of an auto manufacturer, is willing to let you use their money for free. You'd be stupid not to.

I think the "stupid" comment may be generally applicable, as your example shows.

While buying used does save on depreciation, it isn't often that someone sells a vehicle because it doesn't have any problems, and that provides the new owner with risk that is ignored in the guy's advice.

 

[pigsareus]

The two basic cases in which an extended warranty makes sense are,
1) It's something that you couldn't afford to replace if it went out, and
2) the quality of the item is such that it's probably going to fail, and someone is fool enough to sell it (typically department store one-size-fits-all plans).

The final vcr I bought decades ago was $100, with a $20 2 year swap-out extended warranty. It got swapped out four times! I had simply accepted that $120 was the cost to have a vcr for two years (and the 5th unit hung around, slightly used, for something like 5 years after that!)

getting the full-out 10/100/0/+everything warranty from granger was about 5% of the cost of the maverick. And there were a couple of different problems with some frequency at the time that cost well more than the warranty.

Generally speaking, however, extended warranties return very little of their premiums in coverage. The commission on the warranty is typically significantly larger than for the underlying purchase (like, 30% ).

Another exceptions is that sometimes credit unions arrange for extended car warranties at reasonable (for the risk) prices.

yep - you have to consider the bottom line : do you think that your vehicle will require at least 10 hours or service (at 125 $ an hour...and climbing) = 1250 and 1000 in parts over the next 7 years or 64000 miles? Most would suggest the answer is yes.

 

[MaverickDragon]

yep - you have to consider the bottom line : do you think that your vehicle will require at least 10 hours or service (at 125 $ an hour...and climbing) = 1250 and 1000 in parts over the next 7 years or 64000 miles? Most would suggest the answer is yes.

What if you needed a new 8 speed automatic after your powertrain warranty expired....
The warranty would look pretty cheap at that point..

 

[pigsareus]

What if you needed a new 8 speed automatic after your powertrain warranty expired....
The warranty would look pretty cheap at that point..

absolutely - that's why I got mine. Had enough in my life with trying to keep old beaters running and the surprise probs and costly fixes - buying a new mav in '22 and then paying Granger 2200 for the extended was an absolute no brainer. Glad to put the beater days far in my rear view mirror...

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