Extended Warranties for new vehicles

AbbysMom

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We normally buy one when we get a new vehicle, but I am starting to reconsider this for the car we are getting tomorrow.

Do you normally get these? What are you opinions?
 

gailc

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Well as someone who formerly working in the auto finance industry I can tell you that a good share of the ESP price goes into the dealership's pocket. As you know there are a wide variety of plans and prices. If you are buying a new vehicle and plan to drive for a long time and the factory warranty coverage expires well you could put the cost of that extended service plan in the bank and have the cash in cash you need it for repairs.
If buying a used vehicle esp one with higher miles on it already and one plans one driving it for several years perhaps one would be a possible purchase.
 
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AbbysMom

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Originally Posted by GailC

Well as someone who formerly working in the auto finance industry I can tell you that a good share of the ESP price goes into the dealership's pocket. As you know there are a wide variety of plans and prices. If you are buying a new vehicle and plan to drive for a long time and the factory warranty coverage expires well you could put the cost of that extended service plan in the bank and have the cash in cash you need it for repairs.
We are buying a new vehicle and plan on having it for a long time. I may take the money it would cost and put it in the bank. I've been reading so many different opinions about it.
 

xocats

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I bought one when I bought my car in 07 and have not used it yet....

My humble opinion is, if you are buying a reliable make of car, do the required maintenance etc., it might not be worth the money.


Do your homework about the warranty company if you suspect you might buy one.

Make sure that the warranty company is financially sound.
In 1988, I purchased a new car & bought the extended warranty...
the warranty company went belly-up which caused a financial chain reaction so that it's insurer went bankrupt too.

Three years later, as a creditor I got $300 back in the BK settlement.
Because I paid cash for my car and the warrenty....
I lost money on the warranty.
 

mrblanche

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Consumer Reports has said for a long time that an extended warranty on almost anything is a bad bet. If you were buying some sort of new technology, it might be a good idea, but generally, as another person said, you'd be better off putting the extra in a savings account.

Unless, of course, you're like my brother, who could break an anvil just getting it home.
 

mschauer

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Extended warranties on a vehicle are essentially an insurance policy. And as with insurance, whoever provides the warranty must take in more on the sale of warranties they they pay out in claims. In other words, for them to make money most people who buy them will not get back in claims as much as they paid for the warranty.

In my opinion, the only people who should pay for extended warranties are those who will likely be unable to pay for a repair if one is needed. If you always have a stash you can dip into for repairs, then you don't need an extended warranty and would likely lose money on it.
 

yosemite

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We've never gone for the extended warranties. We haven't ever figured they were really worth the money. We've also heard the horror stories of the things that didn't end up being covered by any warranty and those were the first things to go wrong anyway so it was a lose/lose situation.
 
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AbbysMom

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Originally Posted by Trouts mom

Depends on the vehicle

Japanese - no I wouldn't get the extended

Domestic or Korean - Yes I would
I am buying one of your favorite cars.
 

GoldyCat

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What kind of car are you getting?

I never got the extended warranty until I bought my Prius. I probably (make that definitely) should have done more research, but didn't take the time. The dealer told me that the standard warranty doesn't cover a lot of the computer stuff, and the Prius has a lot of computers. The only time I had anything go wrong it wasn't the computer but it was covered 100%, so I'd say I got my money's worth out of it.
 
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AbbysMom

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We're getting a Honda Civic.
 

GoldyCat

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In that case I would say, no it isn't necessary. I bought a Honda Civic used and drove it until it hit something like 200,000 miles. Never needed any major work.
 

katiemae1277

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unless you are going to be driving a lot of miles in a very short time, than no, I wouldn't recommend an extended warranty
In my case I will always buy the extended warranty because I put an average of 25,000 + miles a year on my cars and while I'm still paying on the car I don't want any big repair bills. That extended warranty came in handy a couple times on my Chrysler
 

kiwideus

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Originally Posted by Trouts mom

Depends on the vehicle

Japanese - no I wouldn't get the extended

Domestic or Korean - Yes I would
What about VWs?
 

spudsmom

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I just bought a 5 year/100,000 warranty on the used car I'm picking up on Tuesday. I hope I did the right thing. Just have to make sure I have the oil changed when they say it needs to be done and not a day over, and take it in whenever you feel or hear anything wrong.
 

wearymicrobe

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Originally Posted by Trouts mom

Depends on the vehicle

Japanese - no I wouldn't get the extended

Domestic or Korean - Yes I would
The old mechanic in me backs this up, remember that if you do sell a car before you use extended warr. you can recover a good bit of it from the issuer. If its a Honda chances are it will go 150K without a major.

Remember we buy insurance for the things we cannot cover, non-specifically things like calamitous events.
 

wearymicrobe

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Originally Posted by Kiwideus

What about VWs?
Run far far far away, new VW/Audi are good for leases and people who toss there cars every three years.
 

carolina

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With a new Honda Civic, I wouldn't get it... Besides, when your factory warranty is about to expire, you will receive a bunch of offers to extend your warranty - you can make your decision then, when you have had enough experience with your car to better judge your needs.
 

jcat

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Originally Posted by wearymicrobe

Run far far far away, new VW/Audi are good for leases and people who toss there cars every three years.
Really? Our first VW, a 1982 Golf (2 repairs: alternator and choke) which we sold after 8 years, is still running. We bought a year-old VW Passat, used it for 12 years (2 minor repairs to the trunk latch), and traded it in for a year-old Passat station wagon (no repairs in three years). The old Passat was resold by the dealer.
 
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