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Extended car warranties?
Posted by: swampy
Date: November 19, 2010 03:09PM
I recently purchased a 2008 Ford Fusion SEL with 44,000 miles on it. CarFax shows no defaults or bad reports on the car. I'm more than pleased with the car in all aspects.

What do you think about extended warranties? I can get "new car" coverage, road service etc. 5 years or 100,000 miles for $2743 total.

I know that's a lot of money, but it's an "unknown" (to me) car and with the price of parts and labor going up every day I don't want to get caught with a big ticket repair if something does goes wrong. I doubt that I will reach 100K miles and more likely will drive the car for 5 years. (I drove my last car for 14 years and traded it in with less than 76K miles on it. - Pontiac Bonneville)



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Re: Extended car warranties?
Posted by: Acer
Date: November 19, 2010 03:17PM
You are unlikely to spend that much in repairs for such a late model car. In my experience, the Big Bills hit after 100,000 miles, and the warranty people know that.
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Re: Extended car warranties?
Posted by: cbelt3
Date: November 19, 2010 03:18PM
Swamp-

Extended warranties are almost exclusively a profit game for the car dealers, especially the 'after market' warranties. Read the terms and conditions most carefully. If you feel it's important to buy that sort of 'insurance', and you feel it's worth the money... well, it's your money.

But most of them are just scams with a legitimate business wrapper around them. Caveat Emptor.
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Re: Extended car warranties?
Posted by: Gareth
Date: November 19, 2010 03:21PM
I had extended warranties on my Land Rover and BMW. If I remember correctly, I think I did alright on the Land Rover's, and came close to breaking even on the BMW. But I hated the Land Rover warranty (can't remember the company). BMW's warranty was from [www.warrantydirect.com] .

Some things to keep in mind: Is there a deductible for repairs? How much do they pay for repairs (parts & labor)? When taking my car to the dealer, their rates were higher than the warranty rates and I had to pay out of pocket sometimes (but usually not that much). Is it cheaper to buy a lower mileage warranty if you don't plan to drive that much? I bought a 100k warranty, but probably had less than 60k on the car when it expired by years. I could have saved money with a lower mileage warranty.
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Re: Extended car warranties?
Posted by: Buzz
Date: November 19, 2010 03:27PM
Read, read, read... make sure you're really getting what you think you're getting; no denial of coverage for wearing tennis shoes, or calling from a friend's house or gas station. Then if the coverage is bullet proof, you start haggling; no sense even considering buying something at whatever price, if it isn't what you want. Major profit in extended warranties... that number should be $1,200 - 1,500 out of your pocket. Oh, and those sneakers? Use 'em to walk away until the number is right. Good luck.



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Re: Extended car warranties?
Posted by: Jack D.
Date: November 19, 2010 03:32PM
I sold RV's and motor homes for almost 4 years and if I sold an extended warranty I received 12.5% of what the customer paid. Another 12.5% went to the finance manager because he did all the paperwork. The dealership got 25%. So right out the gate, 50% (or more) of the cost is profit for the dealership.

So now that you know it's a profit center for the dealer, read the small print. Car warranties are crafted so it appears that they cover any conceivable issue you may encounter. In reality they are worded to give the insurer every possible out to not pay the claim or only partially pay for your incident.

For instance we had a guy who's transmission failed and caused an engine fire. Great news! Transmissions are covered under the warranty. Simple, pay me. Wrong. The claim was denied because the warranty didn't cover fires so sorry.

I'm not saying they are all bad but you really need to read the coverage and ask direct questions of the dealer.



- Jack D.




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Re: Extended car warranties?
Posted by: tenders
Date: November 19, 2010 03:50PM
I bought a Toyota extended warranty on a 3-year-old loaded minivan and have gotten twice the cost back in repairs, mostly to gadgets like heated seats and electric door motors.

I would buy it again on a vehicle with a lot of stuff to break, but not on a more basic vehicle.

The downsides: the dealer is inconveniently located and generally a pain to deal with, although they didn't give me any trouble at all about the claims.
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Re: Extended car warranties?
Posted by: Bill in NC
Date: November 19, 2010 04:17PM
3rd-party warranties (often sold at dealers, since they offer higher profit than OEM-branded extended warranties) have had problems in the past with their re-insurers going bankrupt.

I wouldn't buy anything but an OEM-branded extended warranty, if at all.
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Re: Extended car warranties?
Posted by: M A V I C
Date: November 19, 2010 05:13PM
First off, Carfax doesn't really mean anything. Service history and a PPI are way more important, but you're already past that point.

I'd say about half of what has been posted in this thread is false, and about half true. The first thing you need to figure out is what are the common repairs needed for your car before 100k. In some cars this can mean the transmission, drive shafts, non-consumable suspension items... then you add up how much those repairs would cost.

From there you need to pick a warranty provider. There are some that are way over priced and you'll never get your money back, and some that are underpriced and thus go out of business quickly.

Warranties provided by the OEM brand aren't automatically better. They have their own games they play. They get to be judge, jury and executioner. Meaning, they get to decide if they should fix something or not. With third-party warranties, you usually get to take the car to any shop you want. They decide if there's a problem. If it's big ticket item, an inspector may get sent out. These are usually "independent" inspectors though they're paid by the warranty company so I'm a skeptic of their independence. Still, this is better, IME.

When choosing a warranty, there's to basic types - inclusionary and exclusionary. One lists all the parts that are covered, and one lists all the parts that aren't covered. Inclusionary are cheaper. If your car has any unique parts, they probably wont show up in an inclusionary warranty.

There's also multiple levels of coverage. Some cover loaner cars, some don't. Deductibles can range by quite a bit.

If you go with the third party route, I would contact a good independent mechanic you know and trust and ask them what they like to work with. They're going to know which ones are good and which ones are not.

I know one guy who got an awesome third party warranty when he bought his car brand new. It covers everything for as long as he owns the car. Even wear and tear items like wiper blades. He's got well over 200k miles on it now, and I think he's had something like $60k worth of repairs done on it. So his warranty was well worth it to him.

I've had about $6-7k repairs on my car and I paid about $2500 for the warranty.

On average, these warranties are profit centers for the companies that sell them. (Otherwise they go broke.) I bought one extended warranty on a car, then sold it a couple years later having never used it. You have to do the math yourself and decide what the odds are for your vehicle and where you drive.




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Re: Extended car warranties?
Posted by: pinion
Date: November 19, 2010 05:41PM
My bank offered us an extended third party warranty. 5000 miles later the engine went out. Repairs would have been around $3500 but it was covered. Everything except the diagnosis, and any parts considered maintenance like oil and filter etc...

The warranty we got added like 40k miles or 4 years to a van with 67k miles and it cost about $1300.



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Re: Extended car warranties?
Posted by: swampy
Date: November 19, 2010 05:52PM
The policy I am looking at does have a $50 deductible, but covers:
• Engine
• Transmission
• Drive axle assembly
• Brake System (except pads and rotors)
• Electrical components (power windows, seats, lights etc.)
• Computer components
• Seals & gaskets
• A/C and heater system
• Front & rear suspension
• Steering system
• Cooling system
• Fuel system
• Parts
• Labor
• Taxes
• Towing, rentals and roadside service

I know there are fine print details I'll have to look at, but for this 68 yo single granny and a good Ford service center available I may do this. boink smiley

Thanks for all the input!



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Re: Extended car warranties?
Posted by: davester
Date: November 19, 2010 06:07PM
That's a pretty outrageous price for that kind of warranty. If it's from the dealer it's because they have vast amounts of profit added on top of the actual cost.

Personally I wouldn't buy one except on a very complex vehicle with a marginal reliability record. That said, I have bought two used vehicles that already had a transferable warranty so I have used them. It is almost always much cheaper to buy an extended warranty direct. There are quite a few extended warranty companies around that will probably cover the car for a lot less just as long as it currently has some basic coverage from the dealer. Check the google for ratings of warranty companies. I can't remember which are the good ones and the bad ones.



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Edited 1 time(s). Last edit at 11/19/2010 06:09PM by davester.
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Re: Extended car warranties?
Posted by: M A V I C
Date: November 19, 2010 06:33PM
I'm not sure of all the options with the car, but it seems to be worth around $12k. In which case, $2743 for what appears to be an inclusionary warranty does seem high.




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Re: Extended car warranties?
Posted by: iaJim
Date: November 19, 2010 08:13PM
I don't know anything about this, but I'd look at a genuine Ford Motor warranty: [www.fordwarrantys.com]

I bought a used Cadillac SRX that had the genuine GM extended warranty. It covers everything. I've had to have the engine rebuilt, the transmission rebuilt twice, the sun roof repaired three times, and a bunch of other small stuff. It would have cost me a bunch of money to pay for all of this myself. I wouldn't buy a "gadgety" car again without this.
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Re: Extended car warranties?
Posted by: davester
Date: November 19, 2010 08:14PM
Quote
M A V I C
I'm not sure of all the options with the car, but it seems to be worth around $12k. In which case, $2743 for what appears to be an inclusionary warranty does seem high.

I agree, except that I'd say you made a significant understatement. Paying 23% of the purchase price for a warranty that only will cover you for an extra 3 years is patently ridiculous.



"In science it often happens that scientists say, 'You know that's a really good argument; my position is mistaken,' and then they would actually change their minds and you never hear that old view from them again. They really do it. It doesn't happen as often as it should, because scientists are human and change is sometimes painful. But it happens every day. I cannot recall the last time something like that happened in politics or religion." (1987) -- Carl Sagan
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Re: Extended car warranties?
Posted by: Filliam H. Muffman
Date: November 19, 2010 08:19PM
It depends on when the car was made. I am not quite sure Ford had finished their long term quality program upgrade by 2008.

My brother bought an early 90's Ford. The extended warranty he bought, paid for five major repairs that cropped up before he reached 100k. It was somewhat unusual, but that $2500 warranty paid for itself at least three times over.

My Acura is 2 years older and has 4 times as many miles as my Mom's Mercury. She has paid almost twice as much in repairs as it is worth in the last 4 years. She keeps saying she will only buy American. I kid her that she is supporting her own "stimulus" with the repairs and supporting OPEC with her policy.



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Re: Extended car warranties?
Posted by: Dennis S
Date: November 19, 2010 09:01PM
I would not do it.
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Re: Extended car warranties?
Posted by: haikuman
Date: November 19, 2010 10:19PM
$2743 is to much money to pay for that Warranty. Tell them you will pay only $1000. They may counter or they may not. You should begin now looking for a reliable 3rd party Warranty.

Keep in mind Jack D's comments:


Re: Extended car warranties? new
Posted by: Jack D. [PM] [Ignore this user]
Date: November 19, 2010 03:32PM
"I sold RV's and motor homes for almost 4 years and if I sold an extended warranty I received 12.5% of what the customer paid. Another 12.5% went to the finance manager because he did all the paperwork. The dealership got 25%. So right out the gate, 50% (or more) of the cost is profit for the dealership.

So now that you know it's a profit center for the dealer, read the small print. Car warranties are crafted so it appears that they cover any conceivable issue you may encounter. In reality they are worded to give the insurer every possible out to not pay the claim or only partially pay for your incident.

For instance we had a guy who's transmission failed and caused an engine fire. Great news! Transmissions are covered under the warranty. Simple, pay me. Wrong. The claim was denied because the warranty didn't cover fires so sorry.

I'm not saying they are all bad but you really need to read the coverage and ask direct questions of the dealer."



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Re: Extended car warranties?
Posted by: SteveO
Date: November 20, 2010 09:46AM
Quote
iaJim
I don't know anything about this, but I'd look at a genuine Ford Motor warranty: [www.fordwarrantys.com]

I bought a used Cadillac SRX that had the genuine GM extended warranty. It covers everything. I've had to have the engine rebuilt, the transmission rebuilt twice, the sun roof repaired three times, and a bunch of other small stuff. It would have cost me a bunch of money to pay for all of this myself. I wouldn't buy a "gadgety" car again without this.

Wow, that was tough to read, Jim. The SRX hasn't been out but a couple of years, right? I thought GM had their quality issues behind them. What a bummer! Sorry to read of your problems, good move on buying one with extended warranty!
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Re: Extended car warranties?
Posted by: RAMd®d
Date: November 20, 2010 10:05AM
I wouldn't buy a "gadgety" car again without this.


Yeahhhh, I'm not so sure I'd buy a GM car, at this point.

I bought an extended warranty that paid for a new transmission at 26,000mi (and yes, the factory warranty was over for awhile).

I bargained the price after the car price had been settled and made it clear the sale was based on what I had to pay for the extended warranty.

It all worked out very well.




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