extended warranty for car...is it worth it?

[Lisa_M]

My car's transmission went, so we decided to buy a new one (new to us). So we have purchased a 2003 Pontiac Vibe w/ 56k miles on it. This car came off a lease w/ one owner. The car is GM certified, and we have 3 month 3000 more miles warranty on it standard. They want us to buy a 3 yr 36k more mile powertrain warranty for $1300. Is this worth it? I know Vibe's have Toyota engines (good reputation for longevity), but we are unsure if this warranty is worth it or not. Even though it's GM certified, the finance guy tells us its good to have because they do not tear apart the engine and look at every little component.

What do you think? Is it worth it? Would you do it? We have until Friday to decide, when we pick up the car. Financially, we can swing it, but moneys pretty tight for us now that I'm in my unpaid internship. Thanks for your opinions.

Lisa

 

[Panna]

My rule so far has been, if its used yes! Most used cars don't come with enough of a warrenty to cover you a year down the road, much less many years. As for when I am lucky enough to purchase new, i've had the good experiance to not need ane extended warrenty.

 

[HayGan]

I think that they are definitely worth it (especially if you are buying an American made car.) However, shop around!!! You can definitely get a much better deal on an extended warranty from someone else! I use Century Warranty (a Capital One company) I have been very pleased with their service and coverage! I got a 5 year 50K mile PREMIUM warranty on my Ford Explorer for not much more than your dealer is looking to charge you for a very minimal warranty. My policy covers everything except rountine maintenance items

 

[StephMK]

You will probably get answers both ways on this one. For us, we don't keep a lot in savings for car repairs and bought a slightly used vehicle that potentially had transmission issues. Knock on wood, we never had those issues but the warranty did end up paying for itself w/all of the minor issues we had over the term. I thought it was well worth the expense & peace of mind. There are places you can buy warranties that are not through the dealership & are supposed to be more affordable. AAA offers one but I have no idea of the cost.

 

[Lisa_M]

Do you have to buy these warranties through other companies before you purchase the car or can we look into this stuff after Friday? I will call AAA tomorrow to see what they have.

 

[autumnbaby9]

I would say they are worth it. Just make sure you get in writting what the warranty covers and what it doesn't. My parents bought a new car a Ford and purchased the extended warranty. They were told that it covered everything for 10 years. The problem is everytime they go in to get something fixed they now have to argue with the mechanics over the definition of a bumper to bumper warranty. Ford always covers it but it tends to be quite a fight each time.

 

[shelly3girls]

I think that they are definitely worth it (especially if you are buying an American made car.) However, shop around!!! You can definitely get a much better deal on an extended warranty from someone else! I use Century Warranty (a Capital One company) I have been very pleased with their service and coverage! I got a 5 year 50K mile PREMIUM warranty on my Ford Explorer for not much more than your dealer is looking to charge you for a very minimal warranty. My policy covers everything except rountine maintenance items

I agree, we bought a Ford bumper to bumper warranty for 100k miles for about this amount. Shop around and find a good price. Chances are the dealer will match it anyway, they definitely have wiggle room. The warranty and loan rate are always negotiable.

 

[disneysteve]

I agree with shopping around, or at the very least, negotiating the price down with the dealer. When we bought our van, we ended up getting the warranty from the dealer for less than half of the original price they offered. I think we ended up paying something like $695.

 

[abcboys]

If it's a pontiac, YES YES!! We purchased a 99 pontiac montana 2 years ago and purchased the extended warranty and have definately used it. It was pretty expensive 1500?(It was a 2 year bumper to bumper) but I didn't shop around to find a cheaper warranty. We have had to replace the air conditioner, intake manifold gasket leak, and finally had to have the whole engine replaced and when it started leaking had to get a new oil pan think and something else I don't remember. From my experience I will never own another pontiac.

 

[daughtersrus]

My husband is an auto technician. He ALWAYS recommends getting an extended warranty. The hourly rate at the dealership that he works at is $110.00/hour. By the time you pay for parts and labor, you could end up paying more than the warranty.

Here are a few things to ask about. Is if there is a deductible and if so, how much. The other thing is to find out where you can get the car fixed under the warranty. Many dealerships sell after market warranties that may only be honored at their store. If the car breaks down out of town, you may have a hard time finding a repair place that will repair the car under warranty. See what is covered and if they will need to wait for an inspector to come out before repairing the car.

All that said, the finance guy at the dealership that my DH works at is the highest paid employee. He makes a commission off the warranty, finance, under/inner coating...

Check around and try to negotiate a lower price. It doesn't hurt to ask.

 

[rie'smom]

We always buy the extended warranty on our cars and also on major appliances. Both have been used and thank God we had them.

 

[Stein]

I will voice the dissent. I never buy extended warranties. A powertrain warranty for a vehicle is covering a major malfunction which is probably only about twice the cost of the warranty to fix. Thus, you are betting that there is a 50% chance you will loose the transmission in the next 39,000 miles. The great thing about used cars is that you can use one of numerous websites to research the history of any type of car to see if they are known for transmission or engine problems.

Generally speaking, major engine and transmission repairs are not nearly as common as they were just 15 or 20 years ago. With proper selection and maintenance, I would be very disappointed to get less than 150k miles. For a Japanese car, you should get even more.

As several people have noted, the finance guy is recommending it because it is a large commission item - the same as at electronics stores.

So, I would take that money and invest it and keep a good maintenance schedule.

Also keep in mind that when you have a warranty, the dealer is often very aggressive about performing work that may or may not be necessary as they are reimbursed at inflated rates.

 

[Lisa_M]

Thank you for all your thoughts and suggestions. I have 3 requests in for quotes from online warranty companies. I looked in to Century Warranty, but it says not available for PA.

You've all made excellent points. Anyone else have anything more to add?

 

[Melrosgirl]

See if you can shop around (even via the internet for out of state dealers) for the same authentic warranty. Each dealership makes a huge profit, so some are willing to sell right above cost. For my Toyota, two local dealers quoted me $1100 (brand new car) for the warranty. I found someone else in a different state who sold it to me for $500. I have the authentic Toyota paperwork, etc., too. It's the same thing!

 

[dpratt68]

I bought used with the extended warranty and am very glad I did. That $1300 will be a piece of mind for you.

 

[tar heel]

The $1,300 is NOT a fixed fee -- try to negotiate it down just like you did the car. I got $350 off mine last time! Until I read it in Consumer Reports, I had no idea. If they won't take any $ off, try to get them to add miles (not sure if that is as negotiable) b/c 12,000 a year is piddling. The extended warranty we had on our current van was only good for two years b/c we drive much more than that.

We've had extended warranties three times, and two times they turned out to be really good deals for us.

 

[BrerMama]

I would never buy an extended warranty on an appliance, but I will always buy one on a vehicle. On our last van, we had to replace the transmission twice, the alternator and starter once. It more than paid for itself. We bought the van with 67K miles on it, which was all we could afford and thankfully our lender insisted on the extended warranty.

Our new vehicle is much nicer and had far fewer miles on it when we purchased it. It came with an automatic extended warranty and we also bought an additional warranty to cover the period of our loan.

 

[SnowWhite]

You have two options here, one is buy the extended warranty from the dealer but negotiate the price down. They make good money in profit selling these warranties so there is some room for movement and since they are selling you a car making profit already then I can't see why they wouldn't move on it. I would tell them that you will take the warranty but you are willing to pay only $850.00 for it. ALSO be very careful about deductibles!!!!! Some of the extended warranties have $100.00 deductibles which means everytime you use it it will cost you $100.00 or whatever the deductible is. Your second option is to look into aftermarket warranties and there are alot of them out there. BUT you have to be careful with this as some companies are not trustworthy. If you are in the states then contact AAA and get their opinion as well as the BBB. If you are in Canada then contact CAA and the BBB. Again I have had warranties from both dealer and aftermarket and never had a problem as I researched like crazy first. Consumer Reports did a great report on aftermarket warranties, if you can get your hands on that copy it will be very helpful for you. I consider their opinion top notch as do many mechanics I know.

GOOD LUCK!!!!!! Vibes are one of GM's better cars because they developed it with Toyota.

Rob (Snowwhite's DH)

 

[FayeW]

We usually buy Toyota, but the last vehicle we bought is a Chev Trailblazer (we needed the towing capacity). I was VERY nervous about going to a domestic vehicle, AND I had read reviews about the '01-'03 models that were not very good. We bought the extended warranty for that reason BUT, we didn't buy it initially, we bought it nearly a year later, just as the manufacturers warranty was expiring. If you still have 4000 miles to go before the warranty is up, there is NO reason for them to be pressuring you to make a decision by Friday, unless you were adding it in to the financing.

I had no idea that there are private companies that offer extended warranty! I don't know if they are available in Canada.

 

[HayGan]

Thank you for all your thoughts and suggestions. I have 3 requests in for quotes from online warranty companies. I looked in to Century Warranty, but it says not available for PA.

You've all made excellent points. Anyone else have anything more to add?

I'm in PA and have Century Warranty. Have you tried calling them directly?