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Comments
Service contracts are the same, whether they be on Hondas or on GM vehicles. I've never said I was an expert. I just know how service contract companies work, what repairs go through my shop, and how often people get measurable benefit out of their service contracts. I have useful information, which I have shared many times on this site. If the pundits are right, and Hondas are more reliable than Chevies, then my experience is even more useful. The rarity of a Chevy owner getting benefit of a service contract should indicate a Honda owner's benefit would be much more rare and unusual.
Your challenge was a load of hot air, but you're welcome to give your money to whomever you wish. Just don't cry to me when you end up trading your car off in two years, forget to submit for your refund until the 30 or 60 day limit is gone, then figure out you've wasted your money.
Honda Care makes a profit for providing a service. Just like ANY good business makes a profit for selling a good or service.
On average you lose money on car insurance. So why buy that? Why buy any insurance? Why not take the premiums from all of your insurance and put it in a bank account.
The reason is that the premiums cover the value of somebody assuming future risk for you. A fact the Consumer Reports articles never mention.
You pay a small fee up front in exchange for that service no matter what kind of insurance or extended warranty you buy. It's the same exact principle.
You may not think the service is a good value. Other people do. It's up to the buyer to decide.
NewYork Times Article
For Extended Car Warranties, Resist the Showroom Pitch
" Your challenge was a load of hot air, but you're welcome to give your money to whomever you wish. Just don't cry to me when you end up trading your car off in two years, forget to submit for your refund until the 30 or 60 day limit is gone, then figure out you've wasted your money. " Uh uh, no shifting away now. I won't come crying. Now, finally a comer. If you'll just post your email , we can conclude the deal. I'll be holding your collateral. Since it's easy money let's do it. I'll be ahead and you'll be way ahead, or so you portend.So let's seal the deal! I wish to give my money to you. You'll be able to prove me wrong or are you as we say in Texas, all hat and no cattle.
" The New York Times did an article in Saturday's paper on purchasing extended warranties online. They talk about the current Honda situation, and even threw in a picture of Saccucci Honda "
I notice in that article that Philip Reed, Senior Consumer Advice Editor for Edmunds.com commented that it may be beneficial to wait for a extended warranty. Up until 6,000 miles that may be true for HC EW but after not so that I can see. Of course this article was a general article on extended warranties so for other brands this may be true. But your firm and the other online majors will not issue a HC EW once the manufacturers warranty has expired. Nor over 6,000 online. You require the individual to call you for a custom quote. Your comments on the above appreciated. What would be your quote say for a 2005 Honda Accord 4 cyl with 35,900 miles? Btw , I agree with Mr. Reed up to 6,000 miles in the case of HC EW and his other point regarding obfusication of cost.
" So what’s the advice for those people?
First of all, wait. There is no reason to buy the extended warranty right away, even though dealers often say it will be cheaper when you are buying your new car because you get a better deal when the car is in good shape.
“In fact, it may be beneficial to wait,” said Philip Reed, senior consumer advice editor for Edmunds.com. One reason, he said, is that “when the warranty is rolled into the purchase price of the car, it is easy for them to hide the true cost you’re paying.”
In most cases, you can buy one up until your regular warranty expires. After a year or two of driving your car, you’ll know how long you want to keep it and if the car seems to need a lot of repairs. "
The last paragraph I do not agree with. I wouldn't expect problems in the honey moon period. Or if there were excessive problems that they would be resolved by lemon law.
You wrote :amongst other things,
"Even in this down market, you can find a MM yielding 4% and CD's yielding 5% or more. Here is a good site for finding the highest rates. You may want to find another bank if you're only earning 1.5%!!!
http://www.money-rates.com/ "
Here are US treasury rates per Bloomberg. Surely you know who they are? Google quickly. Lmao.But in a kindly way. I don't need to explain how to read it do I
U.S. Treasuries
COUPON MATURITY
DATE CURRENT
PRICE/YIELD PRICE/YIELD
CHANGE TIME
3-Month 0.000 10/30/2008 1.63 / 1.66 0 / -.000 08/01
6-Month 0.000 01/29/2009 1.82 / 1.86 0 / -.000 08/01
12-Month 0.000 07/30/2009 2.17 / 2.24 0 / -.000 08/01
2-Year 2.750 07/31/2010 100-16 / 2.49 0-00 / -.000 08/01
3-Year 4.875 07/31/2011 106-00 / 2.77 0-00 / -.002 08/01
5-Year 3.375 07/31/2013 100-24½ / 3.21 0-00 / -.000 08/01
10-Year 3.875 05/15/2018 99-17½ / 3.93 0-00 / .000 08/01
30-Year 4.375 02/15/2038 97-00 / 4.56 0-00 / .000 08/01
So you're suggesting our readers put their funds in a bank that may/shall be taken over by the FDIC ? Now if the 3 month t-bill is yielding 1.63% and the 1 year is yielding 2.24% and to get 4% in mm you would have to best the yield of a 10 yr. Treasury, is this a teaser rate ? or the act of a desperate institution? I know ING was at 4 last year but of course that was last year. You might be able to get 4% but then again you might have to wait 18 months-24 months to get your funds after your cd matures from the FDIC, oops you said money market, which is variable rate isn't it ? !!!!!
I don't do deals with strangers that I don't trust.
I don't give my money to people who say 'I'll fix your car if it breaks as long as you follow my rules, which I will list in convoluted terms meant confuse and annoy you.'
I don't find it comforting to give my money to people who say they will 'take care of me' when its something I can and should take care of myself.
Did you bother to open the link I included? Apparently not. If so, you would have found plenty of banks that pay FAR MORE than the 1.5% that you are currently earning.
All of which are fully insured, and since you like to depend on insurance so much (EW insurance), then this should be a welcome relief for you.
"So you're suggesting our readers put their funds in a bank that may/shall be taken over by the FDIC?"
I'm not sure what this is supposed to mean. Any bank has the possibility of being taken over by the FDIC. Can you give me a list of specific banks that DO NOT have the potential to be taken over?
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"On average you lose money on car insurance. So why buy that? Why buy any insurance? Why not take the premiums from all of your insurance and put it in a bank account."
Apparently you didn't fully read my previous post...
#1 - Auto insurance is required by law. Homeowners insurance is also required (if you have a loan on the property). Just like paying taxes, you can't get around having these types of insurance.
#2 - Insurance is best used to cover catostrophic losses, not minor life expenses. Most people cannot afford to replace their house if it gets destroyed, or pay $100K in medical bills if they cause an auto accident. As a result, this insurance is mandatory and people buy it, for good reason.
But insuring the possibility of less expensive car repairs is not the best financial decision. If you can afford to buy a $25K-$35K vehicle, then you should be able to afford to maintain that car. If not, you have no business buying that car in the first place.
"You may not think the service is a good value. Other people do. It's up to the buyer to decide. "
I wholeheartedly agree with this statement. I am simply expressing my opinion that purchasing EW's is not the best financial decision.
If you look at the mess most people in this country are in (foreclosures, car repos, bankrupty, maxed out credit cards), I think you would agree that better financial disipline and decision-making are desperately needed. So just because someone thinks EW's are a good value, doesn't mean it's the right thing to do or a good financial decision.
That's incorrect, I read it fully.
#1 - Auto insurance is required by law. Homeowners insurance is also required (if you have a loan on the property). Just like paying taxes, you can't get around having these types of insurance.
This is not an entirely correct statement. Collision and comprehensive auto insurance are not required by law---only liability. Where is the consumer reports article saying that people that buy collision and comprehensive auto insurance pay more on average than they will ever receive?
#2 - Insurance is best used to cover catostrophic losses, not minor life expenses.
Again, this is another not entirely correct statement. I have a $250 deductible on my collision and comprehensive. That means if I have a small dent that costs $500 to repair, the insurance company is writing a check for the full amount over my deductible. That amount is a far cry from a catastrophic loss that you mention, but nevertheless, an amount that many people will file a claim for. Where is Consumer Reports to tell how people are getting gouged by collision insurance? Why are they not advising that people should be putting those premiums in a money market fund?
If you can afford to buy a $25K-$35K vehicle, then you should be able to afford to maintain that car. If not, you have no business buying that car in the first place.
Why aren't you complaining about the low deductibles on collision or comprehensive insurance? I mean certainly if they can afford to buy a $25K-$35K vehicle, by your logic, they should automatically be able to afford all repairs below what, a $5,000 deductible?
I say, if people want to pay for a $250 deductible for collision, that's their choice. If people want to pay $0 deductible for a Honda Care Agreement, that's their choice.
It's quite clear that Consumer Reports is only telling part of the story. It only says, that consumers "lose" money without recognizing the value of the service provided.
By their logic, no business should make a profit.
The law in California says I must have liability insurance - so please don't make the EW look like it's something that's mandatory. To dis the Consumer Reports advice to pass on the EW because they don't justify buying auto insurance is missing the point.
the EW is a sucker bet, an emotional buy for people who worry their brand new car, which comes with a perfectly good factory warranty, need another warranty.
Please show me a well respected independant source that advocates buying an EW for a car - a Honda no less.
Please respond to the question and attempt not to divert.
Yes, but the law in California does not require that people buy collision or comprehensive insurance. By your logic those insurances are a sucker bet as well. Certainly, by your rationale people would be better off putting their premiums into a money market account and waiting until they actually had damage to their car instead of paying the premiums so that insurance companies could make profits. Why doesn't Consumer Reports advocate that?
Because they have a bias against extended warranties even those though forms of car insurances work the same way.
"this guy wants to buy a used gmc in another forum. Show your vehicle ownership sir, your ownership of Honda if any. Have you ever owned a Honda or are you a poster poseur ?"
I own a 2006 Honda Accord SE Automatic that I purchased from Honda East of Cincinnati on March 30, 2006. Please refer to post #10955 of the Honda Accord Prices Paid Forum.
If you had read my post on the SUV's, you would have noticed that I was trying to get info for a friend who asked me for advice.
"This is not an entirely correct statement. Collision and comprehensive auto insurance are not required by law---only liability."
I never said collision & comprehensive insurance was required, I'm not sure where you read that in my post. If you can cover the vehicle replacement cost yourself, then you should do a CBA and potentially drop the non-required coverage. I carried liability only for 10 years on my last car and have a lot more money in the bank because of it.
"Again, this is another not entirely correct statement. I have a $250 deductible on my collision and comprehensive. That amount is a far cry from a catastrophic loss that you mention... Why are they not advising that people should be putting those premiums in a money market fund?"
Your $250 deductible is indeed far from the catastrophic loss that I mentioned, and is a bad financial decision in my opinion. I think it is silly to carry such a low deductible. The lowest deductible I have on any insurance policy is $1000. I do think you should take the difference is premiums (between a $250 and $1000 deductible) and invest it instead.
As everyone knows, filing claims with your insurance has a detrimental affect on your premiums, which is why most people do everything in their power to minimize the number of claims. If you have a $500 door ding, you should certainly cover that yourself, and leave insurance to handle the catostrophic events. If you want to file a claim for anything that happens over $250, be my guest. But you are going to pay dearly in higher insurance premiums.
"I say, if people want to pay for a $250 deductible for collision, that's their choice. If people want to pay $0 deductible for a Honda Care Agreement, that's their choice."
I can't agree with you more. If people want to do as you say, go right ahead. I'm simply pointing out that buying a EW is a poor financial decision. But as you say, people are free to make poor decisions, and many people do so every day.
Why aren't we complaining about low insurance deductibles? Because car insurance and service contracts are different critters. If this were an insurance thread, you bet your life I'd be recommending high deductibles.
Collision insurance might be a bad bet as well, but how does that invalidate what CR has to say about purchasing an EW for your car?
I'm still waiting to hear your well respected independant source that recommends buying the EW. For all I know, you sell EW's for a living and have a biased opinion - why else would you be so addament in having people, imo, waste their hard earned money?
One reason is that insurance is not the topic here. The topic is extended warranties. Let's get back to it.
tidester, host
SUVs and Smart Shopper
1) If anything significant breaks, my wife will be much happier knowing it's covered by the service contract. This prevents the whole discussion about "we didn't buy the warranty because we're self-insured, and so far we're still ahead because our total expenditures haven't exceeded the $575 that we would have paid for the warranty, and we'll be ok as long as nothing else expensive breaks before we sell the car, so let's hope it doesn't because if it does it will make me look like a sap for not buying such an inexpensive plan."
2) If any non-crucial but covered items fail (i.e. instrument lights, clock, rear window controls, etc.) I'll be much more likely to get them fixed rather than leaving them non-functional in order to save money.
3) If I sell before the 7 years are up (likely), the vehicle's appeal to a private-party buyer will be enhanced by the service contract. It gives the potential buyer peace of mind knowing that he won't have to worry about any unknown defects that might lead to an expensive repair right after he buys the car.
I'd also like to put in a good word for Saccucci Honda. I give them credit for standing up to American Honda and fighting for the right to compete in the wider marketplace. It's the American way! In the absence of this sort of open competition it has been clearly demonstrated that most dealers will collude to keep the prices of extended warranties artificially high.
You made some great points. In addition, you get seven years of roadside assistance included in your $575. If you would have paid for that with a company like AAA, you could've paid $378 for that alone.
The prices are so low with the online dealers, it makes a lot sense to pay them to take the risk off of your plate.
"Exactly my point. I was reponding to Jet10000's question. "
I would too. Yah if I'm writing You a check you will follow my rules of collateral or simply state that that you have an opinion but you're not quite willing to share the risk that an insurance company with a large base would.
"1) If anything significant breaks, my wife will be much happier knowing it's covered by the service contract. This prevents the whole discussion about "we didn't buy the warranty because we're self-insured, and so far we're still ahead because our total expenditures haven't exceeded the $575 that we would have paid for the warranty, and we'll be ok as long as nothing else expensive breaks before we sell the car, so let's hope it doesn't because if it does it will make me look like a sap for not buying such an inexpensive plan."
That pretty much say's it all. It was cheap insurance. Good post Dantz.
Matty, I am letting it slide but with your two years experience Are you willing to take on the risks of an insurance company ? Or simply post what you've read with no liability if you are wrong.
What collateral of HondaCare's are you holding? You've only exchanged money for a piece of paper and a promise. You're only protected by simple contract law (not insurance law).
You're right. My opinion is just an opinion. However, that opinion is backed up by years of dealing with service contracts, keeping track of companies that have gone under, and generally paying attention. It is also backed by every consumer-oriented article I've ever read about service contracts.
Your opinion is based on speculation and what salespeople have told you.
But I don't think you've ever stated you dealt with Honda Care claims specifically. The name of this forum is HONDA Extended Warranties Pricing and Info. As I recall you work for a GM dealership. A company which just reported a horrendous $15 BILLION loss in the last 3 months alone.
It is not surprising that a company that is that poorly managed would also have inferior services in their extended vehicle service contracts.
I have made claims previously using my Honda Care contract and was always extremely satisfied with the ease of making the claims, the services provided, the upfront costs and the value for my money.
Yes, Honda Care covers labor and material from any covered repair. I am not that familiar with Zurich's coverage. But I've been reading this forum for awhile and I've never seen anyone post that they compared Zurich to Honda Care and found Zurich to be superior and went with them.
Here's a link to a sample Honda Care contract.
https://www.hondacareextendedwarranty.com/contract.php
I would suggest you get the documentation from Zurich and compare them to see which is better and then let us know.
Duke23, I don't understand your post. I am currently taking on the risks of an EW insurance company by not buying the policy!!! I did NOT purchase an EW, so I'm self-insuring against the costs of potential repairs, with the intent to pay for any such repairs myself.
Therefore, I'm assuming liability if I am wrong, since I have the potential of paying more in repairs than what an EW would have cost. What don't you understand?
I will gladly assume the responsibility of future repairs myself instead of buying an EW. Across all of the cars that I have/will own, I am almost guaranteed to come out ahead! While you guys buy EW's for your current & future cars, I will save that money and take a vacation to Europe or something.
I just don't understand why people are so dealthy afraid of the possibility of paying for potential future maintentance. The only reason you need the "peace of mind" of an EW is if you're worried about not having the money to pay for repairs when they are needed. And if you don't have $500 for a future repair, you've got a lot more problems on your hand than the EW will help you with.
the EW is a fear based buy.
I'd probably buy one too, if I worried about all the things that could go wrong with a car. But I've been around long enough to know that it's a poor bet.
You won't get anywhere with Jet and Duke - I get the feeling they're nothing more than EW sales people sharpening their sales skills here. But hopefully we can provide some balance to those seeking opinions from both sides.
Did I get that right Jet and Duke?? Are you guys EW sales people?
Wanring to others - when the FI person tells you that you can only buy an extended warranty when you're closing the deal - it's a lie!
Honda Care being backed by an RRG, rather than an insurance company, makes me nervous. For an education on RRGs, visit the Warranty Gold thread.
If your going to tell me how evil GM is, well. If I-a lowly Chevy service advisor-don't see people needing massive repairs on their junkers requiring service contract assistance, then surely, a great and powerful Honda shop would see even fewer than I do! A Honda would never ever need a service contract! Heck, they probably don't even have service departments at Honda dealerships!
Statements like this where you try to label purchasers of extended warranties with a derogatory term (such as they're in fear) just displays your inability to look at the facts. People who can't make logical statements eventually resort to name-calling.
As I've pointed out numerous times, an extended warranty is no different from any other risk contract in the society---be it auto insurance, homeowner's insurance, fire insurance, commodity futures, stock options, etc, etc. In all of these the issuer of the contract are paid a fee by the buyer and in return the issuer assumes future obligation on behalf of the buyer.
Furthermore, you do not have the psychological profile of every person who purchases such a contract and therefore you have no ability to make a statement as to why a person buys the contract. That is a fact. I challenge you to find one study from a reputable scientific journal which backs up your statement.
Did I get that right Jet and Duke?? Are you guys EW sales people?
No, you got that wrong as well. This is of course another error on your part.
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Lmao, I don't trade vehicles quickly, last one went 11 years nor do I go into negotiations not informed. If you think I don't respect you, you are wrong. On what any part would cost on any Chevy product I would defer to you expertise in a heart beat. I need not hold any collateral of HC as they have deep pockets. I found it hilarious that those who were most adamant would not risk a dime their own capital. Me, ? Give me collateral and I'll write you the check. Sadly neither you our San Diego friend get it, I can sell better than the average saleman and I bargain only from math never fear.Of all the insurance I pay, this is by far the cheapest. One starter and I clean up
Now I put to you, what right do you have to advise anyone not to buy HC EW in a HC EW forum. Are you willing to act as insurance company. Obviously not. And the value you bring to the forum is ... ? So stay with your half or less single digit returns, I'm happy for you in your choice. And your opinion counts for my money that I have spent exactly how?
Apistesteve, Congratulations on buying your SD Re long ago, but one would think over 20 pages you would drop that weak fear argument. Do I seem fearful ? I took 2.9% financing rather that pay then cash in full because I could pay then back with deflated dollars.
in Georgia - Atlanta
Dealer then wanted to sell me door guards - to keep from being dented and scratched for an additional 300 bucks which I went for - they said Honda just stopped putting them on this year.
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?
They said that 64% of people go ahead and buy the extended warranty.
If Honda is so good, then do I really need the extended warranty?
Any success stories out there regarding the extended warranty is is this just another way to get money out of me?
When I sell the Civic and buy a Fit next spring, I'm probably going to do a hard negotiation on an EW and if I can get it for a decent price, I probably will. 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.
YMMV, of course.
Regards from Texas,
Larry C (aka thebean)
Regards from Texas,
Larry C (aka thebean)
Any success stories out there regarding the extended warranty is is this just another way to get money out of me?"
Bingo! You hit the nail right on the head. You do NOT need the extended warranty and it is just another way for the dealer to make money on you.
You're right...why would you need an EW if you're already paying a premium for the dependability of a Honda. If you're going to get an EW, you might as well buy a much cheaper Chevy or Ford product.
Of course, there is always a possibility (like winning the lottery) that you will get your money out of an EW. But just like with gambling, the house (EW seller in this case) will always come out ahead. They wouldn't sell them if customers got their money's worth.
Dealers really push extended warranties because they make so much money on them. Hell, even the salesman gets a commission if you buy an EW! Keep in mind that extended warranties are very profitable for the dealership and the EW companies, and as a result, are not in the best financial interests of the consumer.
Put the $900 into a savings accout or CD and earn interest on the money instead of giving it to the dealer. If you happen to have a repair, then you can dip into this saving account to pay for it. If not, then you can spend that money however you like, instead of making the dealership richer!
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.
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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.
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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)
The longest Honda Care is 8 years and 120,000 miles.
5 years and/or 84,000 mile warranty on top your 3 year/ 36,000 mile factory warranty.
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.
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).