Extended Warranties

zueslewis

in a "thief" shop, maybe, but otherwise, you're wrong.

I strongly suggest you look at a Chilton's or Mitchell manual. For instance, if you remove and reinstall the serpentine belt and it pays .8, then to do the water pump at 2.0 would have the .8 included.

I've spent what seems like thousands of hours in those two guides and can certainly speak from experience. If there's ever a question over time charged, simply ask to see the book and have them explain how they came up with the time. Of course, if they made a mistake in your favor, it's going to cost you some money.

Dealerships may have a FEW parts installers, but if your health insurance is paid up, walk into the Chevy dealer's service department I managed and say: "And BTW, dealerships don't have mechanics anymore--they're just parts installers".

q45man

My point was not what a dealer charges you but how the mix of warranty work causes the prices they charge you to have to be higher than if they did not do warranty work.

Same problem with extended service contracts that may limit per hour chages and hours billed.

If a business needs x hours at y dollars per month if you are forced to take work that pays less per hour something has to give.

We solve the problem by using salary only techs [based on them working and billing 45 hours per week........we leave the load balancing and work efficiency up to the team which must averge 45 hours per week per member......the slackers get beat with a wrench by the other team members.

Believe me if dealers could dump warranty work they would.......as an independent dealing with the highest quality vehicles only, I thank my lucky stars we don't have to warranty Lexus or Infiniti and they are the best of the lot with Furd near the bottom.

dunkmydonut

In the late sixties early seventies I worked for three Chrysler dealers. First two were salary jobs, and the last one was flat rate. The way it worked was Joe Customer came in for warranty because his charging light was on. A common problem for that era. We knew before we drove it on to a lift that the voltage regulator was bad, but we checked it anyway. Every tech had a high tech voltage reg checker. A paper clip straightened which was connected to both connections on the regulator. This usually turned off the light, and a new regulator was installed in 30 seconds. It was held on by two screws..easy fix. This is when the story gets twisted a bit. Since we have the guy's work order, the service writer starts looking around for old parts. Anything will do. Chrysler insisted that old parts be returned for waranty claims. So all parts left over from regular repairs, were kept to return to chrysler as a warranty repair. We had old engines, trannies, diffs, you name it, t'was kept out back for parts needed to collect warranty claims. So the customer who wanted his charging system fixed was happy, and didn't even know he had his differential overhauled while he was in.

In fairness to dealers it should be noted that warranty work time rates were a bit tight. One example would be less than an hour to do a complete clutch R&R including pilot bushing. So I think each one was trying to keep the other from ripping them off. I don't blame those dealers who kept a used parts bin. You always lost money on warranty.

These days it looks like the name of the game is buyer beware. Hey,if you can't pay someone four grand to buy a Cavalier, something is very wrong.

Anyway I think every buyer feels like the bottom of the food chain. Too bad realy. What do you do when the customer is gone for good. Maybe 8 grand to buy your product will work. I think we might get to see.

chaseboy

Hey everyone. Has anyone purchased an extended warranty for their A4 at the time of purchase or after? I have a 2001 A4 2.8 Quattro that I plan on keeping for a long time and would like to know if it is worth the cost of an extended warranty to cover it to 100k. I have communicated with the finance director at the dealership where I purchased the car and they said that a 6yr/100k extended warranty with $0 deductible would run around $2500. What do you all think is a fair price for this coverage, and is it worth getting, especially considering the dollar amount repairs would cost after the manufacturer's warranty is up. Thanks.

david1973

what warranties/insurance it is for. Almost all the time you will not get as much money out as you put in once you factor in the time value of the money ( ie the company you give the money to gets to keep all the investment income). What it does do is limit your risk. In theory you are only on the hook for the 1000 bucks for your policy. In the simplest given 5 people, 4 will make no claims and "waste" their 1000 bucks while 1 of the people will make a claim for 5000 bucks and profit by 4000 bucks. The consumer has to weight the worst case (probably something like the value of the car) versus the best case (zero claims) and decide which end you expect the car to be closer to. It really doesn't matter if you buy a reliable honda or some unreliable make. That reliability gets factored into the how much the policy costs. If all Hondas were bullet proof through 100K miles, it would cost Honda zero cents to off a warranty up to that level and would give them a competitive edge. Whenever you see a manufactor reducing the warranty (happens all the time in consumer electronics) and then justifying by saying there products are so good they don't need a warranty, be afraid. Very afraid:)
 One advantage of not buying the policy (either from the dealer or 3rd party) at the time you purchase the car is that you get the manufactors warranty period to decide how well the car you bought was put together. Obviously past performance is no guarantee of future results but my experience has been cars that give you problem early on give you problems later in life so in that case buying the policy may be a prudent way to hedge your bets if you don't want to trade it in right away. Of course in exchange for this period you do give up a bit of leverage if you are planning on buying a manufactor extended warrente.

jsylvester

Yes, it is true that insurance companies take your premiums and invest them to make additional revenue. In theory, in a competitive business model, those earnings are already calculated actuarily into the insurance rates one pays. The tanking of the stock market is one reason insurance rates have been rising.

There is also other factors that are considered in setting rates. Depending on the policy, some vehicles will never make claims due to being wrecked and totaled, the owner dies, the policyholder fails to maintain the vehicle, the vehicle is sold and the warranty is not/cannot be transferred.

In my situation, one major repair in 100,000 miles will cover the cost of the warranty. I do agree, that dealing with warranty companies and mechanics are such a hassle (along with the huge losses in the stock market the last few years) that the money in the mason jar in the backyard may be a good idea.

q45man

If you are a company like Furd, and have increased incentives to $3450 to just move cars, where do you save money [get some back] by paying the dealer and his employees LESS on warranty work........unless the government will bail you out...[No Japanese will do it too much liability] ......finally they are talking about firing 2400 white collars before end of year. [today's news]

Their labor and pension costs [mostly unfunded] are killing them as is their lack of productivity.

http://www.fordtechs.com/survey.asp
http://flatratetech.com/pub102.htm
http://flatratetech.com/pub104.htm

What does all this have to do with warranty, the unions are in process of organizing technicans.

Doubtful that they could cheapen the line more than they already have done......Paper and glue cars are next you really don't need metal.

Henry

I may be flying without a warranty on my 95 olds Aurora since WG is not paying claims. I must admit that I am a little scared about that possibility.

The one warranty I can still get will cost me $1,850 for 2 years. What do yu think guys??? The warranty is from National Auto Care Corporation.

Henri

redline65

Henry why are you considering a 3rd party extended warranty after the WG disaster? Personally I probably wouldn't pay $1850 for a 2 year contract. Put the money in the bank and use it for repairs for the next 2 years.

zueslewis

No way I'd even consider it.

ambetkatindig1

I'm not intending to but I just want to have an idea.

Are there any fees to pay for?

KCRam

Hi ambet

Any cancellation provisions and requirements should be in the contraxt you received when you purchased. Every company is different in terms of how they handle cancellations - some pay in full, some pro-rate.

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2crnot2c

In the case of WG, the contract is of no use. I cancelled withing their 60 review period. Even though the contract mentions that I should get back all the money I spent, the reality of the matter is that I am stil waiting to see 1 cent.

Once money has left your hands, do not expect that you will see it again.

Kirstie_H

A newspaper reporter would like to talk with Smart Choice automotive warranty customers. Please respond to jfallon@edmunds.com with your daytime contact information by Tuesday, August 19. Thanks!

markusgmc

I just purchased an 01 Yukon XL. I have 6k miles before the manufacturer's warranty runs out. This thread is a little bit too in the weeds for me.
I just need some advice on extended warranties... or whatever you want to call them... are they worth it or no?

If they are worth it, can I get some guidance on where to go for the best deal?

Thanks much

zueslewis

jhungness

After the whole Warranty Gold thing I will never recommend a warranty for a car. The one guy is right, put the money in the bank if you have it do a 6 month cd or something just so you can't take it out. I'll never trust another company again. I would maybe only consider a warranty through the dealership because they would have to honor it.

doplee

AAA has a referral program of offering extended warranties through Direct Vehicle Service Contracts. I checked them out via web www.directservicecontracts.com and spoke with their rep. It's a written contract with Lyndon Insurance. They are rated A- by AM Best. I've read so much stuff on extended warranties on edmunds that I really don't know what is true or false. I haven't read anything on the boards about Direct Vehicle. From my due diligence, this is what I liked about Direct Vehicle: they pay for the repair via corporate credit card directly to the dealer/repair shop instead of me footing the bill first and being re-imbursed; Rated A- by AM Best; good standing with Better Business Bureau; and no interest financing, but I'd like to see if anyone heard or had any experiences with Direct Vehicle.

Thanks in advance

q45man

The obvious problem with extended service contracts is they have to charge enough to cover what they pay out and the sales commission and operating costs.....to stay in business!

$1,000 may be enough for a Honda or Camary 4 cylinder or a small pickup but I doubt it. Only if they exclude a lot of things that wear out slowly [rubber isolators and hoses belts, wear and tear items, tires, brakes,].

The other problems are how to force owners to pay for a level of fluid/system maintenance that will assure the vehicles longevity and not allow claims.

People who make a living studying these things have concluded that some where around 7 cents [5-10 cents range depending on vehicle]per mile from day one is necessary but few owners pay out $7,000 in repairs and preventative maintenance over 100,000 miles of use. So the car becomes worn and repairs are just waiting to happen. From 100k to 200k the cost can almost double to 12 cents per mile on lux V8 cars.
Not checking alignment and keeping tires balanced can wear rotors, suspension bushings, and wheel bearing from the excess vibration.......is that not the owners fault.

http://www.jsonline.com/wheels/peak/apr03/131172.asp
http://www.stretcher.com/stories/990308e.cfm

aristopac

Hi:

Just purchased 03 Honda Accord Sedan 6 cylinder in California. Looking for an extended warranty of 6/100K w/ no deductible. Honda is willing to give it to me for 855 dollars, while Warranty Direct can give me 1122 dollars. However, Warranty Direct claims that it has 3 better advantages than Honda.
1) I can take it to any repair shops (which I'm just gonna to Honda anyway..so this is not a real benefit)
2) They said they " offer a broader level of coverage commonly called wear-and-tear. [Honda] only offer mechanical breakdown. In short, we will cover a much broader range of repairs than they will."
3) "[Warranty Direct] offer a bumper-to-bumper coverage. By definition, a bumper-to-bumper plan is exclusionary, that is, it will only list the few components not covered. This is a Federal Trade Commission definition. Typically these include cosmetic, consumable and maintenance items. If a plan lists the items that are covered, it is NOT a bumper-to-bumper plan

The Honda plan is a named component coverage. "Named component" coverage plans such Honda provide a list of the parts that are covered. While they may offer a high level of coverage, they are not bumper-to-bumper."

So, I mean..I believe what Warranty Direct is saying...but are they really better? What do you think? Any other companies might be better than them?

zueslewis

"They said they " offer a broader level of coverage commonly called wear-and-tear. [Honda] only offer mechanical breakdown. In short, we will cover a much broader range of repairs than they will."

I'll never believe that warranty direct, or any other private service contract company, would cover wear items like brake pads, wiper blades and tires.

The only exception is if a brake caliper failed and trashed the brake pads - in that case, the pads would be covered, but not as a wear item.

Sounds like a smoke job to me.

2crnot2c

Aristopac, please review the Warranty Gold Claims chain. People like me have been screwed by purchasing 3rd party contracts. Warranty Direct will definitely praise their plans. Tell me which company's sales person in their sane mind will tell you, "Hey, do not get our stuff because we are lousier than company XYZ". When I purchased my contract in the end of May 2003, I was deciding between Warranty Gold & Warranty Direct. I even cancelled the Chrysler plan that I had initially bought. Warranty Direct did give me the same sales pitch. Warranty Gold also mentioned their advantages (it was also costlier). I finally chose Warranty Gold as they were locally located (in Austin, Texas) and thought that if I had a problem with a repair, I could always drop by and speak to them personally.

Then came the NWIG fiasco. This bankruptcy by an insurer/administrator can happen to any company. Warranty Gold has been in the business for a great number of years. My dealer had a lot of praises for it. After the NWIG problem, Warranty Gold has paid no one and have not returned by money that I paid (even though I cancelled within their 60 day review period). This can happen to any 3rd party company.

My suggestion is to go with the Manufacturer's plan. Once I get my money back from WG (a big if), I am planning to get the best deal with the Chrysler's plan. You may want to check whether Honda Care has an exclusionary plan. I know Chrysler does. When I bought my minivan from them at the end of January, my dealer did not know of the Exclusionary plan. I found that out myself.

#noname

Wow..this is the first time I post questions on Edmunds.com, and within an evening, I have already received two very valuable advice. Thank you very much! I have decided to go with the Honda warranty. (^_^)

CarMan@Edmunds

Good choice, aristopac. I could never in good conscience recommend purchasing a third party warranty to a consumer. The fact that the official Honda policy is actually less expensive makes going with them a slam dunk.

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disco99

I read direct service contracts' contract recently-there is zero mention of paying claims with a corporate credit card-instead I read about their "reimbursement procedures". again they were very cordial and prompt to my requests-but the "corporate credit card payments over the phone" process was not in the contract I read--
good luck

reddirtwoman

zueslewis said:

"I'll never believe that warranty direct, or any other private service contract company, would cover wear items like brake pads, wiper blades and tires."

Warrantydirect does not claim to replace tires, wiper blades, etc. I've reviewed their contract on www.warrantydirect.com, and they specifically exclude these items. The "wear and tear" items they refer to are gaskets and seals.

It cost me $1,000 to replace the head gasket on my Accord at 95,000 miles -- I wish I'd had a service contract!

zueslewis

are NOT, repeat NOT wear and tear items. They are enclosed portions of assemblies, like the head gasket, the intake manifold gasket, the EGR gasket, the rear main seal, the transmission pump seals, etc.

I don't care WHERE this service contract company gets their definitions for their "contracts", there's not a service department/shop in the world that considers a headgasket a "wear item".

In the service business community (and I am a court-certified automotive expert allowed (127 times) to testify as an expert in automotive repair and maintenance) "wear items" are wiper blades, brake pads, tires, light bulbs, etc. Period. Again.

Run away, quickly, from any company that lists seals and gaskets as wear items.

redline65

I guess your opinions don't necessarily reflect those of Edmunds.com, as it appears that WarrantyByNet is a sponsor. Kudos to you for not recommending the 3rd party warranties, enough people have learned this lesson the hard way.

zueslewis

I could never in good conscience recommend ANY private warranty company, especially those found over the internet.

The only possible exception is a dealer-sponsored warranty provided for someone who never travels, but still a factory-backed program is better all around.

tballpe

I am ready to buy a new Jetta, which I plan to keep for at least 100,000 miles. I am interested in the extended warranty, (VW's Real Driver product). Although the dealer has offerred a great price on the purchase of the car, it feels as though he is not as generous with the price of the warranty, which is $1700 for zero deduct, or $1500 for $100 deduct. What is the "wholesale" price that I should expect as a negotiation target for the VW plan?

KCRam

hi tballpe

Unfortunately, that is like asking what the invoice price is on an oil change. While cars have the whole MSRP/Monroney label regulation and publically released invoices, the extednded warranty is not part of the car and is not subject to the same release of information. The best thing you can do is shop around - all VW dealers can sell you the factory plan, so call a few and ask about the same coverage.

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shepsgs

Thinking about a 1999 Saab plus a warranty. Any one ever hear of an outfit America's Choice out of Pa. Any know if the AAA extended is any good.

eve_141

There was a recent story in a Chicago newspaper about extended warranties offered by National Warranty and Warranty Gold (both the same company apparently). The underwriters for their extended warranties went into default and the company stopped paying for repairs on vehicles. You can check the story out at this webiste
http://www.chicagotribune.com/news/chi-0308300254aug30,1,253598.s- tory
The moral of the story is, take care of your car and pocket any money you'd put towards an extended warranty. You'll be better off in the end if you simply pay for your repairs when the situation demands.

eve_141

For further information on the rise in complaints on extended warranties (along with more information on the state of National Warranty which is now insolvent) check the following website
http://www.consumeraffairs.com/auto_warranty/

jhungness

I'm glad the article went through on Saturday from the Chicago Tribune. I've filed complaints with everyone and didn't even think to file with the Illinois attorney general. According the rest of the article in the Trib only 12 people have complained in Illinois. I'm sure there's more than that in Illinois. I mainly thank the Edmunds site for hooking me up with the Trib. Rick Popley did an awesome job on the story. I love the fact that Kurt from WG says it was highly unlikely that I wasn't told about the insolvent NWIG. Wow, let's think about that. Would anyone in their right mind continue to pay a company that they know wont pay there claims? Would a person say "hey let me send you my $1100 check any way?" They still continue to lie. The other women told me "your salesman shouldn't have taken your check". I told her then send it back, she told me the rest of my money after 6-6-03 was sitting in the WG account. Why won't they give it back? WHATEVER! I've emailed the general manager at WG like 4 times and he has yet to grant me a response. I emailed Walter Jacobson on Fox in Chicago so I'm hoping he got wind of the newspaper article.

ateixeira

So they ran away to the Cayman Islands with your money, and bribed some politician to keep creditors out of that country. Nice...

Just stick with OE warranties. My cousin got one for his Honda, well under a grand for 7/100 no ded, I did the same for our Subie.

The manufacturers are more likely to be alive in 7 years, Daewoo and Daihatsu excepted. You also get roadside assistance included, free loaner car (upgraded, we've used this benefit already), and better resale down the road, give our plan to sell with 96k miles. ;-)

Sorry 'bout all the horror stories here, but just wanted to share one positive experience with them.

-juice

draknad

Hello, I have read this post title and it has grabbed my attention.
I currently have an extended service contract which was purchased from the Ford dealer where I purchase my used car from.
My car currenlty has bearings which "wore" out and a damaged crank shaft which was scratched from the "Worn" out bearings.
The contract specifically states "internally lubricated parts" are covered.
BUT the warranty company REFUSES to cover the bearings becuase they say they were "worn" out.
And since the worn out bearings are not covered, they will not cover/repair the crankshaft which was damged by the uncovered bearings.
Please, is there anything that can be done towards service contracts and legality.
It specifically states the parts (interannly lubicated) parts ARE covered, but it's totally contradicted by the company saying "worn" items are not covered.

How can an illegal warranty be disputed??
Please help.

The repair costs were estimated aroudn 2k.
Please direct me to help.

-draknad

zueslewis

internally lubricated parts - I'd call the warranty's administration or customer service line.

No offense, but this another real, great, tried and true reason NOT to buy an aftermarket (private) service contract.

q45man

Bearings don't wear out till after 100k [some engines go 300-500k] UNLESS the oil wasn't change every 90 days [severe service schedule]. Owner abuse is not covered and is their way out to deny coverage.

Repair only $2,000 is pretty low for a crank and its bearings -----4-6 cylinder? What about the rod bearings and piston wrist pins and piston rings, bores?

zueslewis

what'd they say about your oil change documentation - or are we not getting the whole story here?

draknad

Hi Zueslewis, q45man,
Thank you for replying to the post.
Yes, I need to supply more details.
Yes, the dealership asked me to supply them with all the service reciepts of oil maintenance.
I supplied them with all reciepts, maybe tad bit longer 5-6k consistent changes.
Details:
Car: 98 Ford SVT contour
Engine: 2.5 liter 6
miles: 92,700 miles
bought used: 57,000 miles
extended warranty: 3 years, 36000 miles warranty.

rod bearings and piston wrist pins and piston rings, bores?:
where not mentioned, sorry dunno

started hearing rattling noise,above 4k rpm, in engine area.
brought in,
dealership:
said $400 labor would be charged if not covered by warranty company.
warranty company:
sent inspector out (after 2weeks)

After many calls to warranty company and dealership, same response was:
Warranty covers only "breakdowns"
"the bearings were not spun"
so it is not considered a "breakdown"
"bearings look worn" from normal wear
another answer was "driving habits"

Is there anything, umm anywhere to dispute this warranty practice?
It's just so contradictary.
And obvisouly does not sound correct to me.
When I read a warranty's covered items(internally lubricated)
I would expect them to be covered if they go bad.
Crazy!

-draknad

2k not bad, but I still owe 4k on the car, and plus 2k, means it worth 6k total to me.
If I was to trade in, 6k would just break even for me.

I heard AAA could possibly be some support?
Please help.
Thanks.

roadrascal

Did your Contour have a head gasket replacement recently? Coolant mixing with oil will most definately destroy engine bearings. Just asking. And engine bearings are internally lubricated, not a "wear item", nor should they fail at 97,000 miles. I would fight this one.

q45man

The question is not your oil habits [well 5-6k is probably adequate for more than 100k] but the ones from new to 57k when you bought it. I could have been grossly mistreated prior.......good/decent habits thereafter cannot correct problems.

draknad

I purchased the vehical and the warranty at where it is being serviced right now.
I did ask for service records when I purchased the car, but did not recieve any records.
If the dealer is required by the warranty company for service records, I'd hope they would be able to provide these records better than I.
But the answer is, no, I do not know how this car was driven or maintained before me.

But how can this be disputed?
Or how are extended warranty plans controlled for "scams"
What can I do to fight this.

Umm, how can I prove bearings should not wear out below 100k?
OR prove that these are not wear items and should be covered?
Thank you.

-draknad

landru2

Wow, you just got that one in 300 miles before the warranty expired. But I guess it dooesn't matter if they won't pay anyway. :^(

draknad

It's been at the dealer for 3 weeeks.
If I need to move it, I'd use my AAA privilages.
They can tow it just about cross country I think.

-draknad

zueslewis

then it starts costing you (AAA Plus members).

q45man

The problem is the bearing did wear out [as per you] and this is evidence of serious abuse or a in 100,000 error at the factory.

Just sue both the dealer [who sold the policy] and the extended service contract company in small claims court SEPARATELY.......maybe you'll recover something?

That's the problem service contracts are written without inspection on a gamble that the used car will last to 100k or they can figure some way to not pay out much!

zueslewis

service contract company sets its own rules. They have an adjuster. If the adjuster says there's abuse or neglect, end of story. There's nothing to sue them FOR. In essense, the contract was violated if there were signs of unusual wear or abuse due to neglect.

Private service contracts are NOT warranties, by law and as the law precribes for recourse. Without a warranty, all you have is the question of whether a covered area claim was paid or not. If the service contract company says the circumstances don't meet the standards for coverage, you're in the wind.

draknad

Where is "abuse" written in the contract???
How in the world do you measure "abuse/neglect"?
In fact, I passed their abuse standard.
I've given them all my service reciepts, which pass and qualify for non-abuse.
And they have not mentioned "oil change frequency"
as any reason at all.
What is "unusual wear"
And how is this measured.
I've given them my service reciepts.
So how can they have a base to stand on?
What and where is their base???
An illusionary term, with no measurement???
Getting outraged by just typing this.
Crazy..!

-draknad