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Honda Extended Warranties Pricing and Info

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Comments

  • mattgg1mattgg1 Posts: 191
    "Well, fast forward to today, and the warranty has more than paid for itself with coverage on a front strut replacement and two repairs on the infamous "rocking seat" issue."

    What is the "rocking seat" issue and how much does the dealer charge for such a repair?

    "On a car that I'm going to keep for the full term of the EW, I think it's a decent bet that it will either pay for itself or come close."

    How do you come to the conclusion that an EW is a decent "bet" and will pay for itself or come close? If that were really the case, then the EW company would quickly go out of business.

    I'm not sure what your definition of "come close" to paying for itself is, but let's say it is $50.

    My neighbor sells cars and makes $40 on every person who buys an EW. Lets say the dealership makes another $40 (they make much more in reality). Lets say the business/operating expenses associated with selling the warranties is also $40.

    So conservatively, the EW company has $120 in warranty costs from day one. If you get within $50 of paying for the warranty, the company just lost $70.

    The EW companies are certainly making money, which means that the warranties are NOT paying for themselves overall. The only way it could be a good bet for you is if you have much worse luck with vehicle repairs than the average car buyer.

    It sounds like you might be a very unlucky guy when it comes to cars, so buying EW's may be a good bet for you. But EW's will most likley be a financial-loser for the rest of the car-buying public.
  • I think we all get your position on the extended warranty for Hondas. There's really no value in continuing to argue that point when it's clear there is, and will remain, a difference of opinion.

    Need help navigating? kirstie_h@edmunds.com - or send a private message by clicking on my name.

  • mattgg1mattgg1 Posts: 191
    My mistake. I didn’t realize this was an Advocates of Honda Extended Warranties Only discussion.

    There are many enthusiastic cheerleaders of extended warranties here who repeatedly post their favorable views. I just didn’t know there was a limit on the number of posts for opposing viewpoints.

    I guess it is in the best interests of forum visitors to read claims that EWs will pay for themselves (or close to it) and not be challenged to provide any substantive evidence or see any contrary opinions.
  • No, that's not the point... when it gets to the stage that points are being repeated without new information being added, or new questions being asked, it's generally time to move on. That's where we are.

    Need help navigating? kirstie_h@edmunds.com - or send a private message by clicking on my name.

  • dantzdantz Posts: 49
    "Then they tried to sell me the extended warranty package for about $890. Gets me to 10 years 100,000 miles. Is this a good deal?"

    I'm not aware of any Honda Care service contracts that run for 10 years. Is this some other other type of extended warranty? Also, what is the deductible? If it's a Honda Care contract with a zero deductible then this would be a decent price.

    "Dealer then wanted to sell me door guards - to keep from being dented and scratched for an additional 300 bucks which I went for"

    Hopefully you are referring to dealer-installed body side moldings, not merely a cheap (under $30) set of door edge guards.

    (Hope you don't mind that I rewrote the title of your post)
  • jet10000jet10000 Posts: 656
    I'm not aware of any Honda Care service contracts that run for 10 years.

    The longest Honda Care is 8 years and 120,000 miles.
  • let us not forget that an 8 year 120,000 EW is a net
    5 years and/or 84,000 mile warranty on top your 3 year/ 36,000 mile factory warranty.
  • jet10000jet10000 Posts: 656
    let us not forget that an 8 year 120,000 EW is a net
    5 years and/or 84,000 mile warranty on top your 3 year/ 36,000 mile factory warranty.


    Well it's possible that the net figures would exceed the figures you give.

    If someone drove 36,000 miles in one year, the standard warranty would expire after one year. Yet the extended warranty could provide coverage for an additional 7 years. (Not the 5 you stated.)

    Also if someone drove only 15,000 miles in the first three years of ownership, the standard warranty would expire, yet the extended warranty could provide coverage for the next 105,000 miles. (Again, much higher than the 84,000 miles you stated.)

    The Honda Care warranty provides great flexibility to cover long periods depending on the driving habits of the owner.
  • mattgg1mattgg1 Posts: 191
    jet10000 -

    Your examples aren't realistic or logical because you are mixing and matching the warranty extremes. You have used the most extreme hypothetical situations that reflect a VERY tiny portion of the new car buying public (if anyone at all).

    "If someone drove 36,000 miles in one year, the standard warranty would expire after one year. Yet the extended warranty could provide coverage for an additional 7 years. (Not the 5 you stated.)"

    If someone drives 36K miles a year, they are likely to drive a similar amount in the future. So if this person maintains this mileage, they would only be covered for an additional 2.3 years, not the 7 you stated.

    "Also if someone drove only 15,000 miles in the first three years of ownership, the standard warranty would expire, yet the extended warranty could provide coverage for the next 105,000 miles. (Again, much higher than the 84,000 miles you stated.)"

    Someone driving only 5000 miles a year is likely to continue this trend. But your example has them going from 5000 miles/yr for the first 3 years to 21,000 miles/year for the next 5 years. That is more than a 400% per year increase!

    How many new car buyers have a driving pattern like this? Very few, which is why this example is completely absurd.

    The far more likely scenario is the driver continues to put on 5000 miles per year, which means they would be covered only to 40,000 miles. (again, much lower than the 105,000 miles you stated).
  • mitzijmitzij Posts: 611
    Careful, there mattgg1! Throwing logic around like that can be a dangerous thing! ;)
  • thebeanthebean Texas!Posts: 14
    Whoa! Dial it down there, Sunshine.

    The "rocking seat" is a known design defect on that gen Civics. On some of the cars with heavier drivers (say in excess of 180 lbs), over time the seat mounting starts to give way and the seat will rock forward and backwards a little bit. The fix is to put in a whole new mounting assembly on the drivers' side, which is about 5 hours of labor plus parts. The price on my service order was $410 each time this has been done. Plus in the neighborhood of $650 for the front strut replacement. So, if I had not gotten the EW, my delta out of pocket would be at least $500. So, Honda Care did not make any money from me. I'm sure they do from others.

    Instead of calling it a "sucker buy", why don't you call it what it really is - insurance for those who do not want to take risks. I really don't give a big rat's behind if you or anyone else approve of my buying an EW. Plus, I don't care if anyone else ever buys an EW. Someone asked for a positive experience with EW's and I responded. I'm not a cheerleader for them, nor a naysayer as you are. With the high price of repairs and the complicated nature of modern cars, some of us like a little financial certainty. Some don't. It's a free country.

    Take a chill, chief.

    Regards from Texas,

    thebean
  • mattgg1mattgg1 Posts: 191
    Sorry about the strongly worded response. With people increasingly making such poor financial decisions (i.e. the foreclosure crisis), I just want to make sure the people requesting information get both sides of the story.

    You beat the odds with your warranty (like winning at the casino), but most will not be as fortunate.

    The sale of EWs is actually a very simple business plan...charge more for the warranty than you pay in warranty claims. If not, the company will lose money and go out of business.

    So just like playing the lottery or gambling in Vegas, there is a chance you’ll come out ahead, but there is a greater chance you will be throwing your money away.

    And you are correct, it is basically insurance for the very risk-averse buyer, but many people don't realize they will likely not get their money out of EWs.
  • jet10000jet10000 Posts: 656
    Your examples aren't realistic or logical because you are mixing and matching the warranty extremes.

    Nonetheless, they were correct in that they showed that the coverage for an 8 year, 120K warranty can extend beyond the "net" figures that aspesisteve presented which were not fully correct.

    I could've picked many numbers to display the inaccuracy of his statement. You can as well.

    The fact is that an 8 Year, 120K warranty covers exactly that no matter how a person drives the vehicle.
  • jet10000jet10000 Posts: 656
    The sale of EWs is actually a very simple business plan...charge more for the warranty than you pay in warranty claims. If not, the company will lose money and go out of business.

    EVERY company should run on the principle that it charges more than costs incurred so that it can be profitable.

    The anti-extended warranty group continues to make the argument that just because a company makes a profit for providing a service that the service is bad. That is a ridiculous argument.

    You encourage people to self-insure themselves. Did you know a person can save money if they did their own oil changes or grew their own tomatoes too? Do you actively encourage a boycott of those companies and encourage people to do those activities themselves? It's the same thing.

    Some people pay others to provide a service that they don't wish to do themselves. The marketplace determines whether the added service provided is valuable or not.

    If people didn't think it was valuable, no extended warranties would be bought.
  • thebeanthebean Texas!Posts: 14
    No problem. I came across too strong as well. I can see some of your points, and definitely think people need to seriously consider the pluses and minuses of EW's objectively. I would bet that probably the majority of EW's are purchased under pressure at the dealer while in the closing process, which proves your point that they are big moneymakers for the dealers. Otherwise, they would not have the high pressure sales job on them.

    Like everything else, there is good and bad on EW's. Each person should decide before they go in to buy the car if they want one and more importantly, what that warranty can be bought for on the open market. I didn't understand that these things were negotiable until the finance manager kept lowering the price every time I told him I didn't want the warranty. Finally, in my mind it became value for me. For others, this may not be.

    Regards from Texas,

    thebean
  • canddmeyercanddmeyer Posts: 382
    fourkidmom. I'm a big fan of x-warranties. I've won a few and lost a few as far as them paying for themselves, but overall I'm wayyyy ahead. I say buy the x-warranty, but IF and ONLY IF it is a Honda factory warranty. Avoid everything else, as many warranty sellers won't be in business 10 years from now, but Honda will.
  • mattgg1mattgg1 Posts: 191
    "EVERY company should run on the principle that it charges more than costs incurred so that it can be profitable."

    It's been said that EWs are decent bets and buyers are likely to get all/most of their money from them. While a small minority of EW buyers may recoup all/most of their investment, the wide majority will not (since these companies must be profitable). That is all I was pointing out, and it sounds like you agree with me on this.

    "The anti-extended warranty group continues to make the argument that just because a company makes a profit for providing a service that the service is bad."

    I agree with you that EW's are a "service". I certainly expect EW companies to make a profit for providing that service, and I have no problem if people want to pay for this service.

    My only issue is with the perceived notion that buyers will get all/most of their money back from an EW, which is not true. Just as long as they know there is only a small chance of recouping their investment, and instead look at it as paying for a service or insurance.

    "Some people pay others to provide a service that they don't wish to do themselves."

    The "service" that EW companies provide is taking your money upfront and potentially paying for future repairs (if all of their rules/criteria are met). If you have car trouble, you still have to deal with it yourself. You have to bring it to the dealership, have the problem diagnosed, deal with the repair people, and submit your claims to the EW company.

    So the service people are receiving that they "don't wish to do themselves" (as you put it) is writing the check for the repair and bearing the burden of a repairs that exceed the initial EW cost.

    "If people didn't think it was valuable, no extended warranties would be bought."

    Just because a consumer "thinks" a product/service is valuable, doesn't mean is it, or that it should be purchased. Lots of people saw "value" in adjustable rate mortgages and gas-guzzling SUVs a few years ago, but those items aren't working out very well for them now.

    I just want to make sure that potential buyers of EWs are fully informed and make the decision that is right for them.
  • jet10000jet10000 Posts: 656
    you still have to deal with it yourself. You have to bring it to the dealership, have the problem diagnosed, deal with the repair people, and submit your claims to the EW company.

    With Honda Care, I've never had to submit any claims as you state. I bring it to any Honda dealer's service department, I tell them what is wrong, they fix it and I drive away.

    There are no claim forms to fill out. There are no hassles with any repair people. If it's a covered repair, they just make good on the warranty.
  • thebeanthebean Texas!Posts: 14
    My experience as well. The only difference between a repair when the car was in factory warranty and a repair under the Honda Care warranty was the payment of $50 deductible. If I had to do it again, I would have pushed harder to get a zero deductible EW for around the same price I paid.

    I have never had to file any claim, nor have I had any hassles with the dealership, just like jet10000 said.

    YMMV.

    Regards from Texas,

    thebean
  • mkielmmkielm Posts: 33
    Can anyone provide an update? Last I heard there was going to be a hearing in Federal Court sometime in August. Has that occurred yet. Any ideas on the ramifications (Do consumers need to consider buying before the hearing or ruling)?

    Thanks again to the dealers (all in New England?) who are selling EWs at such great prices and who are fighting this battle (sure for themselves, but also for consumers)!
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