Extended Warranty on a Car - Good Idea or Waste of Money?

[ClarabelleCowFan]

We have been car shopping for a dependable newer vehicle (we want a small SUV) to replace my 11 year old mini-van. We found a 2002 Jeep Liberty LE with 23K miles for a great price. The majority of the factory warranty has expired because it is more than 36 months old. The Carfax on the vehicle shows no accidents.

We can purchase a 3 year/36K bumper to bumper extended warranty thru Century Warranty for $1346. I haven't shopped around for other prices but I would before we actually purchased one. This was the one on the Carfax site.

Since the car is low mileage and has been very well maintained do you think that an extended warranty is needed or should we just make sure to put aside enough in savings in case the vehicle needs repairs.

Any wisdom and experience with extended warranties is appreciated!

Thanks!

 

[EmptyNester]

Hi ClarabelleCowFan:

My personal opinion is to stay away from extended warranties. I've worked in a couple of dealership accounting offices. I can tell you that dealerships make *BIG* money selling these things.

These "warranties" have a lot of "fine print". There are required deductibles and many repairs will be excluded.

I suggest: put the money you'd pay for an extended warrany in a savings account and add a few bucks to the account every month. This should cover any major repairs you car might need. Chances are, you won't need it and you can use the money to help purchase your next car.

Thats JMO, others MV.
Sharon

 

[Lisa loves Pooh]

We got one on our van up to 100,000 (or 7 years).

We'll be in it for the long haul and we figure--Murphy loves to visit after our warranties expire.

And we keep road tripping--so the miles are accruing a bit more quickly than on our vehicles in the past.

We got a bumper to bumper warranty.

 

[FordFusion]

I'd pass, dealers make big profits on these and try to push them, just research quality reports and make sure your car scores high.

 

[MyGoofy26]

I made out VERY well with my extended warranty. It helped that I was buying my car from my uncle's best friend's dealership so I knew they weren't trying to get every penny out of me (especially with the boss man calling them all repeatedly to make sure they were on the ball, treating me well, and making sure they found a way to get me into whatever car I wanted, LOL)

My car was just a couple thousand miles from the regular warranty expiring and I didn't want to be stuck for the length of my loan if anything happened. I ended up having a couple of fluke things go wrong that this warranty paid for, and even the most unexpected things they covered. When I'd take it to the shop I'd hand them the policy and they'd call up before doing any work *just in case* something was covered and I can't even begin to count how many wear and tear replacement parts that thing ended up covering. I was amazed. I probably got at least 5X my investment back. Just the one fluke part that went bad was like $1600 (just the part, that didn't include labor) and they covered it all except my $50 deductible.

The company I had was Wynn's

 

[midwestdee]

Get the warranty! This is one of the few things I would say it is a good idea - and you want the bumper to bumper includes everything warranty - not one that covers most things. When we had our GM Safari mini van - about a year after we had it (86) the gear shift fell off! GM told us since we didn't have the premium bumper to bumper warranty - it was not covered under the one we had purchased. Now, I consider a gear shift fairly basic ,and made sure that was the last GM product we purchased. With the Toyota mini van - within 2 years or so - there was a problem with the automatic door - if we hadn't purchased the all inclusive warranty - it would not have been covered under the traditional big stuff warranty. Our DD purchased her 1st new car 2 years ago and her dad and I helped out to make sure she purchased the all inclusive warranty - trust me - unless you won't be able to pay the rent if you get it - get the warranty. Ditto for rust proofing - don't let them tell you that new cars don't need it any more - if like us, you drive them into the ground - you need the rustproofing - assuming that it matters to you what the car looks like - if not fine - don't get it. When a friend got divorced and purchased her first "single " car - she got a snazzy white Grand Am - the salesman told her she didn't need the rust proofing - we told her she would be sorry - believe me, white cars with rust spots don't look nice - and it had several within 2 years.

 

[SUSIEQ]

Are you a AAA member?

They sell car warranties, and they just might be cheaper. I don't have any experience with them, but maybe someone else here does.

Good Luck!

 

[ClarabelleCowFan]

Thanks for all the input. Yes, we are AAA. I'll definitely check with them before we finalize anything.

We went and looked at the car today and because the mileage is so low - 23K - then we can actually purchase a new car extended warranty that covers the vehicle for 7 years/70K miles bumper to bumper. Major repairs will carry a $100 deductible. This also includes all scheduled maintenance on the vehicle including oil changes, replacing all fluids and tire damage replacement (the vehicle has Goodyear Eagles and if those are damaged in any way they will be repaired or replaced with Goodyear Eagles - those aren't cheap tires!). The total cost for the 7 year extended warranty is $1800. Just assuming we have 4 oil changes a year at $40 then that is $1120 we would have spent for 7 years worth of oil changes assuming we average 12000 miles per year (industry average).

DH works tomorrow so we are going to our bank Friday morning to hopefully finalize the loan details since our bank's rates were much more competitive than the dealerships.

They let us keep the Jeep so it is sitting in my driveway now. After the other thread about the Jeep Liberty on this board I looked and sure enough I saw the Hidden Mickey on the dashboard. This car is meant for us!

 

[shelly3girls]

We purchased the extended warranty on our Honda Pilot since we plan to keep it for a very long time. After having to replace the transmission on our Town & Country after only 60k miles we decided it was a good idea. I would definitely shop around though. We have a 7 year/100k mile warranty and paid around 1300 for it. Maybe the difference is that we bought ours new but your price sounds high compared to the ones we were quoted. Of course we were originally quoted a higher price but like everything the price is negotiable.

 

[In Luv with Disney]

We purchased the extended warranty on our Honda Pilot since we plan to keep it for a very long time. After having to replace the transmission on our Town & Country after only 60k miles we decided it was a good idea. I would definitely shop around though. We have a 7 year/100k mile warranty and paid around 1300 for it. Maybe the difference is that we bought ours new but your price sounds high compared to the ones we were quoted. Of course we were originally quoted a higher price but like everything the price is negotiable.

We also have a Honda Pilot and LOVE IT! We got it NEW in 2004 and paid about the same thing you did for the extended warranty.

We also JUST bought the Toyota Yaris on Friday and we bought the extended warranty as well. We paid $1200 for it...they originally were asking $2300!!!!

 

[jenr812]

Enjoy your new car!

 

[brando5111]

Buy your vehicle through a credit union!!!! The CU will offer their version of the "extended warranty", but it will actually work for you! We had this on our 2005 Saturn Ion and OMG - so glad we did. I was hit and half the car was destroyed. Well the extra warranty though the credit union alllowed us to have an upgraded rental during repair time, and along with the basic warranty on the car, all other expenses were paid. We were out zero dollars on this accident. I paid another $1,200.00 to get this car covered for the life of the loan (5yrs) through our credit union, and it has been worth every penny we paid so far!

Brando

 

[IAMJESSICARABBIT]

hi

i just got one on a 2001 honda mini van i just got my wife it had 56k on it

the dealer is my best friend so he did me right

i mayed about 800 got the 4 year unlimited milage gold plan
wich covers the drive train plus the major parts such as water pump altanator etc

this is about what you see other posted for about 1200 or 1300 so you see what the mark up is

make shure yours has a low deductable and it pays a good rate mine pays the mechanic 75 an hour for labor is labor is more in your area or you pay the diff.

also mine has towing reembursment for 75 per tow so by by AAA

its a good idea just dont overpay and make shure its usable

scott

 

[Pea-n-Me]

I also have a Jeep Liberty and I love it. We have had many Jeep vehicles over the years and are loyal customers.

My current Jeep is a 2004 with 25K miles on it, so I am still covered under the original warranty and I haven't decided if I'll buy an extended warranty yet (probably not). However, twice I've bought the extended warranties from AAA/General Electric, but to be honest, I never used either one even once since I never had any problems with my Jeeps. It's been a while since I had the warranty, but it used to cover you up to 100K miles with a $50 deductible. Everything that was covered on the original warranty was covered. I paid around $1200. They will allow you to put down $200 and pay monthly until it's paid off if you so desire. I thought it was a good product, but it did not cover routine maintenance.

I love the Hidden Mickey also! Good luck!

 

[PlaneJoy1]

When you buy an extended warrenty, look for an "exclusive" warrently as opposed to an "inclusive" warrenty.

When they show you the details it SHOULD NOT read, your warrently "includes" .... and a list of 1000 things. (Thus an "inclusive warrenty)

The good warrenty should show that they only "exclude" a list of items. In the car industry, these are the ones that cover the most.

If you have access to a credit union..... use them! I have financed my cars through them and their extended warrenties are very good. We've purchased two, and both paid for themselves with the first repair.

Congrats on the new car!

 

[daughtersrus]

Thanks for all the input. Yes, we are AAA. I'll definitely check with them before we finalize anything.

We went and looked at the car today and because the mileage is so low - 23K - then we can actually purchase a new car extended warranty that covers the vehicle for 7 years/70K miles bumper to bumper. Major repairs will carry a $100 deductible. This also includes all scheduled maintenance on the vehicle including oil changes, replacing all fluids and tire damage replacement (the vehicle has Goodyear Eagles and if those are damaged in any way they will be repaired or replaced with Goodyear Eagles - those aren't cheap tires!). The total cost for the 7 year extended warranty is $1800. Just assuming we have 4 oil changes a year at $40 then that is $1120 we would have spent for 7 years worth of oil changes assuming we average 12000 miles per year (industry average).

DH works tomorrow so we are going to our bank Friday morning to hopefully finalize the loan details since our bank's rates were much more competitive than the dealerships.

They let us keep the Jeep so it is sitting in my driveway now. After the other thread about the Jeep Liberty on this board I looked and sure enough I saw the Hidden Mickey on the dashboard. This car is meant for us!

I'm jumping in here a bit late. My DH is a technician at a Lincoln/Mercury dealership. He always recommends to family and friends that they purchase an extended warranty. He also cautions them to be sure that the warranty will be accepted at the place that they want to do the service. For example, the dealership that he works at will not accept many of the 'independent' warranties and many that they do require additional time for the repair because the warranty company will not approve a claim until they send an inspector out to examine the car.

As for the tires being replaced or general maintenance, it's common for the warranty company to pro-rate the tires so they will still charge you for the amount of time/mileage that the tire was used. They usually have a small fee for oil changes (maybe $15.00 for the filter).

One last thing, most of the time when they say 7 years or 70K miles that is not from the time that you purchase the vehicle but instead from the date that it was made. Since you're looking at a 2002, it may have been even made in 2001. That would only give you until 2008 or 2009 or 70K miles, which ever comes first. I would still get a warranty. The labor rate at DH's dealership is just over $100.00/hour(too bad he only sees a small portion of that!) so one major repair would more than pay for the cost of the warranty.

Have fun with your new car!

 

[beattyfamily]

When I don't get it something BIG happens right after the regular warranty expries!

This last mini-van we decided to get the extended warranty BUT we had it as part of our offer. It was included.

It's 100,000 and 10 years I believe.

On our other mini-van we didn't buy it and right after 3 years the sliding door stopped working.

On our first mini-van right after the 3 years the engine died!

So I like getting the extended warranty now but I just make it part of the deal.