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I wonder how the drama is playing out: internet sales of Honda's Extended Warranty was reported to cease May 1. Peer pressure from the dealer special interest. A lawsuit - by a major player in internet ew sales - ensued. Any news at all?
.....ez....
Honda had originally asked us to take down the notices on our site after we won the restraining order. They told us a new policy would be coming out that we would be happy with so we removed the notice in good faith. They were not true to their word, and are pushing for a trial instead.
We will be putting the notices back on our site. We also have a few dealers that will be joining us in court.
Yes, it is legit. You get a genuine honda care service contract straight from Honda's corporate office.
I'm going to be buying a CR-V next week and wanted to know if I needed to buy the extended warranty the same day to get a better deal on it. In other words do I get a better price for buying it now as opposed to a later date. I assume that that one can buy the warranty at any time before the manufacturer warranty expires. Is that correct?
If I don't need to buy it now that will give me time to read up on the topic. Thanks!
Well that is true. But, the cost of the extended warranty changes the longer you wait and the options for time periods and mileage decreases.
However, as long as you purchase the Honda Care before the 6,000 mile mark you can get the same "new car" pricing that you would get if you purchased the warranty the day you bought the car. So that will give you some extra time to do more research.
Buying the extended warranty up front when you already have 3 years of warranty ahead of you is not a good place to park your hard earned money imo.
for most cars, I think the Extended warranty is a poor wager.
I have an 2006 odyssey lx purchased in 9/05. Has 14000 miles or so. I'm in los angeles. Any opinions on where to buy extended warranty? Thanks.
They have different prices for different times & miles and deductibles.
You can get up to 84,000 additional miles and an additional 60 months of coverage.
For example, I did a Saccucci quote for a 2006 civic with 20,000 miles and it had the following:
36 mo / 36k miles: $750
60 mo / 84k miles: $810
48 mo / 48k miles: $850
As you can see, the 48 mo / 48k miles costs more than the 60 mo/ 84k miles - why is that?
Also, these extended warranties are from the date purchased right? So, if I purchased the 60 month / 84k miles one today for that 2006 civic with 20000 miles, it would expire 06/02/2013 or at 104k miles, whichever comes first, correct?
You are corrrect.
The Honda Care trial has been scheduled for July 28th. -Gardiner
WIth that...when the dealer offered the extended on this, we were going to refuse. However....we paid $1200 for 6 year/100K extended warranty....if we don't use it, we get it back after 6 years is up, so we really can't lose this time. I will only use it if the cost is high, otherwise if we run into $200 etc, we'll pay it out of pocket.
We were pricing the Civic for weeks...other dealers wanted 1800 for the SAME warranty so people..CHECK AROUND before you buy :-)
It sounds like the Accord warranty wasn't a Honda Care but a third party warranty.
With Honda Care you don't get reimbursed. They pay the dealer directly and you don't have to deal with that.
I didn't lose money on my last service contract. The repairs that were covered plus the years of roadside assistance that I would've otherwise paid for, more than made up for the cost of the service contract.
In addition to that, since I sold my car before the end of the term, I got a pro-rated refund for the time and mileage I did not use.
I was very pleased with the value of the contract and purchased another one with my new Honda. Sure, some people may take a chance by not getting one and come out ahead and that's fine. You may also own a car without collision insurance or a home without homeowner's insurance, and perhaps you'd pocket what you'd spend on premiums. Or perhaps you would incur large uncovered expenses.
There's something to be said for the peace of mind of knowing that major repairs are covered on my vehicle for 8 years or 120K miles. At the low cost that Honda Care is sold online, plus the 8 years of included roadside assistance, I have determined that it is a good deal.
Well that's not insurance's only purpose. True, insurance does offer protection during catastrophic events. But collision insurance will also pay for a minor collisions as long as it's over the policy deductible. Same for homeowner's and health insurance. A person need not have a catastrophic operation as you claim, it will also cover something as simple as a broken arm.
Same with a extended care contract. It can cover a $5,000 engine breakdown as you mention. It can also cover electronic CD players going bad, power windows becoming inoperable and many other technical or electronic things that go wrong with a complicated automobile.
And your statement about selling a car that has had excessive repairs bills during the factory warranty period doesn't have anything to do with extended care contracts. Extended care contracts are for people that are expecting to keep a car beyond the factory warranty which can be a period from 3-8 years after a car is purchased, when all of these complicated systems are much more likely to malfunction.
If you're saying to put $2,000 in a savings account, it's obvious that you haven't priced Honda Care at one of the online dealers like Bernardi or Saccucci. I can buy an 8 year 120,000 mile Honda Care with $0 deductible for a top of the line Accord for only $995.
And in case you haven't noticed there aren't really any high yield savings account currently. The highest I know of is 2.75%. Even if you compounded the $995 for 8 years, you'd only have $1,200. Which is certainly not enough to, "cover ANY part at ANY time at ANY mileage" as you claim. Nor would it also cover the $432 that I would pay AAA for roadside coverage for 8 years that I get included with the Honda Care.
The facts simply do not back up the claims you're trying to make.
How do extended warranty companies make money?
The answer: By paying out less in repair claims than the cost of the warranty itself.
Statistically the odds are against you that you will get more than the cost of the extended warranty in repair savings. That has been proven by Consumer Reports, and everyone that I've spoken with. Yes, there are a few who saved on repairs, but the majority lost money with extended warranties.
Gentlemen, return to your corners...
How do extended warranty companies make money?
The answer: By paying out less in repair claims than the cost of the warranty itself.
Right. And how do insurance companies make money which you yourself admitted you pay for. By paying out less claims than the cost of the premiums received. Does that mean insurance is a "financially stupid product"? By your logic, consumers would be "so stupid" to buy that too.
Companies that agree to assume potential future costs get paid a fee for the service they provide whether they provide insurance, extended warranties or even a futures contract which guarantee that a certain amount of oil can be purchased at a locked in price.
These agreements are widespread throughout a free-market society. It is up to the person involved whether he feels the service provided of assuming future risk is worth the cost charged.
If he doesn't feel the service is a good value, then he doesn't need to purchase it. As in any free-market society, if something of poor value is being sold, people will stop buying it. If it provides a good value it will continue to sell.
The fact that Honda Care has been sold for many years and is continued to be sold, would indicate that the market as a whole, considers it a good value for not only the actual repair costs being made, but the service being provided of assuming future risk.
YES, with insurance, you sometimes pay more in premiums than the claims paid out. But it is WELL WORTH the protection from catastrophic events. Certainly, I pay a low premium for car and health insurance, and it has more than paid off. Most people I know couldn't survive without car or health insurance. And yes, there are the MINORITY who pay more in premiums than the amount paid out in claims, but it is WORTH the protection from potential future financial destruction or catastrophic events.
If I had bought an extended warranty on my last car, I would've lost $1,000 or whatever the cost of the warranty was, because I never needed any repairs other than oil changes, tire changes, and regular maintenance items that are not covered by extended warranties. For 120,000 miles, I never used the extended warranty because either the factory warranty covered the item or it wasn't covered by the extended warranty and my car was extremely reliable so not many things broke down. Choosing the right car has a lot to do with it.
And insurance agents make a profit by selling insurance policies. And statistics prove that people also lose money on insurance as well.
And yes, there are the MINORITY who pay more in premiums than the amount paid out in claims,
That's just a completely false statement. There is no way an insurance company could stay in business if a majority of its customers received more money than it paid in premiums. Many people drive for years and years paying thousands in auto insurance and never have a claim. Many people stay healthy for years and years and never receive medical services to cover the premiums that are paid for the insurance.
You're trying to say the two things are different when they're not. Insurance companies and extend warranty companies are providing a SERVICE in addition to the money they pay out in claims. The service is that if you pay a small fixed amount, they will bear the risk of future claims. That service is something that one receives in addition to the actual cost of the claims.
The value of that service is a matter of personal opinion. I value not having any expensive repair bills for my car so I have a Honda Care. And I value not having to pay for huge costs in the case of an auto collision so I have car insurance.
You're trying to accuse buyers of extended care contracts of being financially stupid, yet you admit to buying insurance in which most people pay out more than they will ever receive in actual financial benefit. You are doing the same thing.
Again, I need to repeat myself because you didn't understand what I've stated. The amount that you lose to car and health insurance is WELL WORTH the protection from devastating accidents. The amount that you lose to extended warranties is NOT WORTH the unlikely potential $5000 engine repair. The WORST that can happen when you don't have an extended warranty is a $5,000 to $10,000 repair bill, which you shouldn't pay for. That's nothing compared to a major car accident or major surgury without insurance. It is more unlikely that you will have an engine breakdown within the time and mileage limits of an extended warranty, than the chances that you get diagnosed with cancer, or other costly disease. That is the crux of my argument.
There has not been one reported case of a total Honda engine breakdown in a Honda vehicle that has been properly cared for with less than 100,000 miles.
It's not worth it to you, but that doesn't mean it's not worth it to everyone. You're making perfect sense on why you value a type of insurance and not a value on the extended care contract. That doesn't mean that everyone applies the same criteria you do in placing a value on it.
It is more unlikely that you will have an engine breakdown within the time and mileage limits of an extended warranty, than the chances that you get diagnosed with cancer, or other costly disease.
You can't make that blanket statement for everyone. That would depend on the health of the person. If a person is younger and healthier, they may have better odds of the car breaking down.
Also, while costs for a major surgery or a major car accident can be more than a repair for a car system malfunction, health insurance and car insurance can also cost far more than the cost of an extended care contract. So comparing potential dollar costs is not an equal comparison.
Let me just back my statement up by saying that this.
There has not been one reported case of a total Honda engine breakdown in a Honda vehicle that has been properly cared for with less than 100,000 miles.
Never in the history of all of the vehicles that Honda has produced? What is your source for that claim?
Please read my bolded statement carefully. I did not say that a Honda engine has never broken in history under 100,000 miles. Aside from rare manufactured defects that are covered by the factory warranty that appear in the first year that the car is driven, a Honda that has been PROPERLY CARED FOR (implying no factory defect or lemons counted and extremely well maintained (no Honda technician errors)) with less than 100,000 miles has never had a reported engine breakdown.
By Honda engine, I mean since the inception of VTEC technology. Or in other words any Honda engine manufactured after around 1990.
Well thats a big load of crap.
re: "It's not worth it to you, but that doesn't mean it's not worth it to everyone"
I hope you can see it both ways as you ask wisemoney to do.
Maybe you cashed in on your extended warranty and made it pay off and that makes you a believer or worrier.
I have owned 5 hondas in my life from new ownership and never once would a warranty of paid off for me.
Some people may sleep better knowing they have the extended plan, but for me I sleep better with my hard earned $$ someplace else.
Just the sales tactic alone, is reason for me to say NO Thanks!. I mean as soon as the carsalesman closes the deal, he hands you off to Mr. Fear Factor who tells you, you had better protect yourself.
Maybe you cashed in on your extended warranty and made it pay off and that makes you a believer or worrier.
I have owned 5 hondas in my life from new ownership and never once would a warranty of paid off for me.
As I said before, there's value in what the warranty pays for and there's also a value in the risk that the contractor is assuming and the risk that I'm getting rid of.
I don't care if I get dime one back in repairs. In fact, I'd rather not have anything breakdown because there's the hassle of taking it in. In the contract price, I'm already getting years of roadside assistance coverage which I would pay for somewhere else. In addition to that, I get rid of any concern about paying for repairs in exchange for paying, what I consider, is not that much money. To me $995 for 8 years of coverage and 8 years of repairs as needed is a small amount. If someone else is low on cash and that $995 is significant, by all means, keep the dollars in your account and don't spend it. I have enough money where I can enjoy the luxury of not worrying about repairs.
Just the sales tactic alone, is reason for me to say NO Thanks!. I mean as soon as the carsalesman closes the deal, he hands you off to Mr. Fear Factor who tells you, you had better protect yourself.
I didn't buy from Mr. Fear Factor. I bought online at the lowest price I could find. The sales tactic had nothing to do with my purchase.
I have never made anyone eat live bugs in my office.
First of all, I pay about $14 a year with my car insurance company for full coverage roadside assistance and towing. Roadside assistance is not a good reason for buying extended warranties. With an extended warranty, I'm very concerned that the parts that break will not be covered. Many parts in a car do break down over time, even with the most reliable car, but most of the repair bills will not be covered by extended warranties.
Will I "lose" money on the deal? Perhaps. Let's look at it from an investment stand-point: If I stick that $950 in a high interest savings account (to keep it liquid) of 4% for example (I think that's what my HSBC is right now) and assuming I don't spend it or the interest rate doesn't change in those 7 years, I would come out with around $1,250.....or roughly $300 in interest. That's not counting any taxes or any other variables that will inevitably cut a chunk out of it. I'm personally willing to sacrifice that $300 over 7 years and the opportunity cost of having that cash on-hand.
I'm not trying to prove anyone wrong, but let's take it down a bit here. Why call these products and anyone that purchases them stupid or a waste of money? They are not for everyone. If you disagree with their purpose, state your EDUCATED reasons and move along. If you say certain parts are not covered...gasp...give examples. There may be something the rest of us are missing, but not likely. The fact that we purchased a Honda and actually read this forum puts us a cut above the rest already...at least in my opinion. Cheers.
This is a generality and a falsehood. How do you calculate that "most" repair bills will not be covered. What specifically isn't covered that you feel should be? Do you have any facts or statistics to back up your argument? Have you even read what Honda Care does cover?
You certainly didn't know the price of a Honda Care contract and you were throwing out a figure that was double the actual price.
You still didn't post one source or backup to your statement that: "a Honda that has been PROPERLY CARED FOR (implying no factory defect or lemons counted and extremely well maintained (no Honda technician errors)) with less than 100,000 miles has never had a reported engine breakdown."
With an 18 year record like that, surely, that must have been written about in some automotive journal if true. What is the source? Or do you happen to have a high-level position at the Honda corporate office to know that there have absolutely no reports of such incidents. Please state where you are coming up with such information.
That's a reason to buy the extended warranty?
and you want the sceptics of extended warranties to state "educated reasons" as to why not buy them?
I think people buy the extended warranty out of fear. They have so much fear of an impending breakdown that they would rather just give up now and throw away a $1,000 to say to themselves "whew! now I don't have to worry anymore". It's rather remarkable that they can sell these plans to someone who just bought a brand new vehicle with an existing warranty. And the sad thing is that many of the extended plans are so full of fine print and loopholes, there can be major aggrivation waiting to come back at you.
How about taking a look at Consumer Reports reliability data for the Pilot. I own a "beefy" Pilot (LOL), and it has had nothing needed but fluid changes to this point.
It's the 5th Honda product I've owned and although I have considered buying an extended plan out of fear, I have overcome that fear with truth.
I purchased a PC yesterday and proceded to get the extended warranty sales pitch. Since the PC was a price leader, I could see the salesman's dissapointment after my decline. His sales pitch was so full of spreading fear - it's very manipulative to the weak and ill informed imo. This guy wasn't looking out for my interest - it was his interest, his commision he was looking out for.
You make it sound like the default is to buy the extended warranty when it's really the exception. Don't take my word for it, take the word of Consumer Reports which in my opinion is as unbiased as you can get when it comes to consumer advice. Their advice would be to just say no.
tidester, host
SUVs and Smart Shopper
You think? Do you have a psychology degree? Have you published your research findings in a journal showing how you came to that conclusion? If so, please publish the source, I'd like to read about your studies.
Don't take my word for it, take the word of Consumer Reports which in my opinion is as unbiased as you can get when it comes to consumer advice.
They may be unbiased, but I read their article on the website. Their conclusion is based upon a survey of how much dollar value was obtained in claims by the people that took their survey. They totally ignored the value of the service provided of the warranty companies assuming future risk.
Obviously if more was paid out than claims taken in, nobody would offer these extended warranties. It's a business and assumption of risk is a service. They get paid for assumption of risk as in other businesses.
Why didn't Consumer Reports do a survey on people with car insurance and ask how many people received the value back of all of their car insurance premiums. And when the majority answers no, Consumer Reports could advise people not to buy car insurance too because it's a "bad buy" because insurance companies take in more money than they give out.
Consumer Reports survey also doesn't differentiate between people that buy extended warranties at a online dealer with very little markup, as I did, versus people that buy the warranty at an inflated price at their local dealer.
The dealer that I bought my extended warranty from sells them so low that other dealers and Honda are protesting and trying to take them to court to prevent them from selling to others at such a low price. I got a far better deal than many people surveyed by Consumer Reports.
It was not a "conclusion." It was an expression of opinion. This is not a criminal trial so stringent burdens of proof aren't required. I suggest we drop the confrontational posturing and enjoy a good friendly discussion.
tidester, host
SUVs and Smart Shopper
Anyway, I think there probably are quite a few people that purchase the extended service contracts out of fear. I didn't. I took a completely rational approach and determined the following points (aside from the aforementioned financial incentives):
1) Pro-rated refund if I decide to return (I think there was also some mention of a larger refund if never used)
2) Ability to transfer to other buyer for small fee (great selling point!)
3) Roadside assistance and other ancillary benefits
4) My wife is the primary driver of the vehicle and I like to know that she will have help if something were to happen in my absence (whether at a repair shop or on the side of the road)
The fact that I saved so much on my Pilot by using this site alone makes up for any sort of financial loss I may incur from such a 'waste of money' product. To each his own. We can all argue back and forth about this until the end of time. I feel like I should get some cut of the sale though in case I influence someone to purchase a contract!
buying auto insurance isn't optional it's the law.
That's why CR doesn't ask such a question.
Auto insurance is obligatory (at least it is in Calif.)
Extended warranty - you have a choice!
I don't have a pshyc degree, but I do have a Sociology degree and 15 years of sales experience. I've seen all the training in selling based on fear - it's in alot of advertising - probably more than you realize.
If your wife uses the roadside assistance, and I agree that's nice to have, then does that make the warranty non-returnable?
In lieu of the extended warranty, I would advise for someone to purchase the roadside assistance through AAA or their insurance provider.
The cost for my household (two cars) is $60 per year through AAA and that includes free maps!
I am a bit startled at what is not covered. But, I went and bought the 7 year 120k warranty anyway. Seems like it was only $765 at the time through Succuci Honda (on-line). My prime reason was both the "piece of mind" and resale value. A high mileage, long life, transferable warranty is like gold at the time of private resale.
That's why CR doesn't ask such a question.
Auto insurance is obligatory (at least it is in Calif.)
Extended warranty - you have a choice!
Collision and comprehensive insurance is NOT required by government jurisdictions. People have a choice to buy it. So why have it?
Certainly on average people pay more in premiums than they ever receive back. By Consumer Reports logic, it would be labeled a bad buy too. If they are so unbiased why don't they mention that? Why shouldn't people just save their money on their premiums and pay for any damages out of their pocket should they occur. Certainly most people would save more money that way. Why isn't Consumer Reports advising anyone on that?
There is no difference between collision insurance and an extended warranty. People are buying a service to relinquish some future risk they would otherwise have to carry themselves. The companies that are taking the risk get paid a premium for doing so.
Consumer Reports arguments are flawed because they do not look at that side of the equation. They only look at dollars paid out and not the value of the service being provided.
There is a very big difference between collision insurance and an extended warranty. Should you be involved in an accident, the extended warranty will not cover your expenses for repair nor the cost of the other car (if one is involved) if you are fault.