Extended New Car Warranty
Richard Kaplan
What is the net.consensus on extended warranties?
In particular, I am trying to decide if I should purchase
a 6-year/100,000 Mile No-Deductible warranty for my
1990 AWD Toyota Camry. The standard warranty is 3 years/
36,000 miles. The dealer wants $775 for the extra
warranty, but I'd imagine if I shop around I can find
it cheaper.
Logic tells me that Toyota is not a charitable organization
and if they're willing to sell me a warranty for $775 then
odds are that the car will not need more than $775 of
covered repairs during the life of the warranty (and yes,
it is very comprehensive coverage). On the other hand,
with my past cars I have always had that amount of repairs
before a car hit 100K -- therefore it sounds like a good
deal.
Consumer's Reports (no flames please (-: ) advises
against extended warranties EXCEPT for cars with a
poor track record (not true for the Camry) or
cars likely to have high repair bills (for which they
list AWD as one indicator).
So, do I take it?
j...@modcomp.uucp
> In particular, I am trying to decide if I should purchase a
> 6-year/100,000 Mile No-Deductible warranty for my 1990 AWD Toyota
> Camry. The standard warranty is 3 years/ 36,000 miles. The dealer
> wants $775 for the extra warranty, but I'd imagine if I shop around I
> can find it cheaper.
About half of that price is the finance man's commission. If you
*don't* buy it, you are likely to get independent mail offers directly
from the insurance firms, often with better warranty terms, and without
the built in commission.
Ken Lee
Kaplan) writes:
> What is the net.consensus on extended warranties?
Be careful with "extended warranties". Even when offered by a new car
dealer, the warranty is usually from some insurance company. If the
insurance company goes broke (not uncommon), neither the dealer nor the
car manufacturer is responsible for the policy. Also check the terms
and exclusions on the policy. The most expensive and most common
repairs will probably not be covered.
A few U.S. congressmen have recently had bad experiences with extended
warranties on their personal cars. There is legislation in progress to
clean up this industry. You may want to wait until after the new laws
go into effect.
By the way, your regular insurance company may offer the equivalent of
an extended warranty at a much better price. Check with them first.
Ken Lee
DEC Western Software Laboratory, Palo Alto, Calif.
Internet: kl...@wsl.dec.com
uucp: uunet!decwrl!klee
Keane Arase
>
>What is the net.consensus on extended warranties?
>
>and if they're willing to sell me a warranty for $775 then
>odds are that the car will not need more than $775 of
>covered repairs during the life of the warranty (and yes,
>it is very comprehensive coverage). On the other hand,
>with my past cars I have always had that amount of repairs
>before a car hit 100K -- therefore it sounds like a good
>deal.
To me, an extended warranty is like insurance. My 60mo/100,000mi warranty
cost me $800. Over the five years (my calcs show I'll be under 100,000 miles
in five years), that comes to $160 per year, or 7.5% of my yearly insurance
bill. A deal, even if for the piece of mind I'll never have an expense
(other than maintenance), greater han $25.
Be wary of non-manufacturer after market extended warranties. Most of
these companies seem to be fly-by-night companies which will deny your
claim by any loophole available, or take your money and promptly fade
into oblivion.
My extended warranty is from GMPP (General Motors Protection Plan), and of
course, I own a GM... :-) Their service has been (so far) impeccable, even
allowing claims above and beyond what is stated in my contract with them.
Is it worth it? Hindsight is usually the best judge of that. If your
car never has a problem while the extented warranty is in effect, it was
a waste of money. But if your engine falls out of your car, and your
air conditioner compressor blows up, it would probably be a pretty good
buy...
---
Keane Arase | All 312 area codes outside of the Chicago
ke...@tank.uchicago.edu | city limits have been changed to 708.
xas...@uchimvs1.uchicago.edu | You have been warned...
* Please file the usual disclaimers here *
John Abt
car the price was immediately cut in half (I still didn't buy it).
So offer them half if you can't decide.
-John Abt
Brenmtt H. Besler
deductable with 6 yr/100K miles. The dealer "threw it in" with the
total price. I might have been able to get a better deal by not taking it.
For $775 I would pass up the warranty and make a repair fund for the car.
Granted not many people would set aside that kind of money, but invested
it will grow to over $1000 in a couple of years and will be able to pay for
many repairs. A guy my dad works with has lousy luck with the Ford
ESP(Extended Service Plans).
Dave Post
Do yourself a favor. Get in writing exactly what information is required on
all receipts. And I don't mean from the salesdroid ( they don't know ). Get
it from the warranty company itself. If you can't get this information
easily you are only fooling yourself. For example, Borg-Warner told me that
they wanted to see my name on the receipt as well as the descriptions of the
items and services I bought. Can you produce that, if say, you change your
own oil?
Another thing: These things are sold at a very high markup. ( from a friend
who took the Ford sales training )
I think they are a waste of money.
David Post po...@hpfcla.hp.com hpfclabs!hpfcla!post
mcro...@sleepy.bmd.trw.com
>
> In particular, I am trying to decide if I should purchas>
> and if they're willing to sell me a warranty for $775 then
> odds are that the car will not need more than $775 of
> covered repairs during the life of the warranty (and yes,
> it is very comprehensive coverage).
>
Don't forget the cost of your deductibles. You will need to have more than
$775 worth of repairs to recoup your investment.
I vote against these warranties. The dealers are making a hell of a profit on
them or they wouldn't sell them.
I guess it is all a gamble. If you buy the warranty, you are betting that your
car is gonna break. If you don't buy it you are gambling that your car is not
gonna break.
But the cost of the gamble is prohibitive. Even if it breaks, will it break
$775 worth, plus deductibles for each failure?
Richard Kaplan
mcro...@sleepy.bmd.trw.com writes:
>Don't forget the cost of your deductibles. You will need to have more than
>$775 worth of repairs to recoup your investment.
The price I quoted is with no deductible.
>
>I vote against these warranties. The dealers are making a hell of a profit on
>them or they wouldn't sell them.
>
That's true.... But then again, I'm sure my car insurance company
makes a hell of a profit, but I sure wouldn't drive without
insurance.
>But the cost of the gamble is prohibitive. Even if it breaks, will it break
>$775 worth, plus deductibles for each failure?
Well, let's see what the collective.net.experience has
been. Not including routine maintenance, how many netters
out there have gone 6 years and/or 100,000 miles with
less than $775 of repairs to your car (ANY car, but
especially Toyotas).
mcro...@sleepy.bmd.trw.com
You must also remember that for the first 3 years/36,000 miles you have your
standard warranty. So, to be more specific, has anyone had $775.00 worth of
repairs in years 4-6, or within miles 36,001-100,000?
My own experience has been NO. I have never had a major repairs (cumulative)
on any car that I have owned that exceeded $300.00. I generally keep my cars
for 5-6 years, although I have an '83 Buick that I plan to keep for a long,
long time, albeit only summer driven.
Yes, I buy American. No, I haven't had problems. Yes I will continue to buy
American. No, I won't buy an extended warranty on any of them. (I also never
buy a car in it's first two years of manufacture. Usually by then if you sniff
the air you can tell if the thing stinks or not.)
So far, this has been a winning strategy for me.
Ken Lee
the last couple of years. These companies were forced to turn over
their books to the courts. It turns out that out of your typical $750
policy, less than $200 actually goes to insurance. The rest is profit
for the warantee company and the salesperson/dealer, mostly the later.
Look again at the coverage. If your car shows no defects after the
basic 3 or 5 year warantee, are you likely to find $700 worth of
defects in the next 2 or 3 years?
Michael McDaniel
>
> In particular, I am trying to decide if I should purchase
> a 6-year/100,000 Mile No-Deductible warranty for my
> 1990 AWD Toyota Camry. The standard warranty is 3 years/
> 36,000 miles. The dealer wants $775 for the extra
> warranty, but I'd imagine if I shop around I can find
> it cheaper.
>
change to 50 or 100 deductibles. (it happened to me).
> Logic tells me that Toyota is not a charitable organization
> and if they're willing to sell me a warranty for $775 then
> odds are that the car will not need more than $775 of
> covered repairs during the life of the warranty (and yes,
> it is very comprehensive coverage). On the other hand,
> with my past cars I have always had that amount of repairs
> before a car hit 100K -- therefore it sounds like a good
> deal.
>
You have found the essence of the ESP. You are betting that
they will have to pay more than the $775 (plus the interest
earned from investments) and they are betting not. They have
more data to base their bet on than you do (plus the profit
motive).
> [stuff deleted]
> So, do I take it?
It's up to you. You will be required to show proof of proper
maintainance and repair bills etc. It will also fall on you
and your mechanic to show that the repair should be covered at
the rates etc. that your mechanic will charge (# of hours).
You may have to fight for new or rebuilt parts where they will
want to use junkyard parts (depending on the company).
I have had warrenties on 2 used vehicles. The one through a
major manufacturer was easy to deal with and I lost (covered less
than the premium). The one through a third party paid handsomely
(about 4X premium) but wanted to put a junkyard engine in a
vehicle I'd purchased 3 months earlier. I also had to cover
alot of misc. expenses as well (about $1500/$4000 over 2 years)
since their book rates and the mechanic's book rates were
different.
best of luck!
Mike