I suppose I should introduce myself. I work for a Chevrolet dealership, back in the Service department. I record who buys service contracts from us, as well as deal with service contract companies that other customers bring in when their cars need repairs. I have made a bit of a hobby reading contracts and finding loopholes. I know that the vast majority (say, 90% or so) of my customers who have bought service contracts have seen little or no return. Whenever there is a large claim with a service contract (a rarity), it has been a long drawn out PITA process, negotiating between the company that wants to send 'one of our' used parts and the customer demanding a shiny OEM one.
I have what you might call 'field experience'. (thanks for the backup, Mikefm and Jimbres )
I'm not saying that you shouldn't be concerned about post-warranty repair costs, but I firmly believe that service contracts are, at best, the second-best way to deal with this. The best way is to build up your savings.
Suppose that I buy a new European luxury car today. I'd like to keep the car for a few years beyond the expiration of the (typically) 4-year manufacturer's warranty, but I'm afraid that this will expose me to several thousand dollars in repair costs. Since I have 4 years to prepare for this, why not use that time to build up my savings? If I deposit $100 per month for 48 months into an account paying 4% interest (some of the online savings accounts, such as EmigrantDirect & HSBC, are paying over 5%), I'll have almost $5,200 by the time the factory warranty runs out.
Keep in mind that $100 per month is only $3.29 per day. Wouldn't you agree that anyone who can afford a luxury car should have no trouble putting aside that modest amount of money? And each dollar per day that you can add to that will give you an extra $1,558 at the end of 4 years. (I'm using Excel's future value formula to calculate this.)
Why pay someone else to do something that you can - & certainly should - do yourself?
Here's just a sample of my frustration and inability to reach a representative by phone - here are some emails I sent that went unanswered:
http://www.warrantybynet.com/form.asp Have car in repair and your adjuster Gabriel spoke to my authorized repair dealersip, Straub Lincoln. Straub states Warantybynet ("W") is negotiating rates and refuses to pay $151.27 in a registered repair. I called Vann at 3:25 my time who transferred me to Curtis and at 3:48 my time I was told Curtis needed to speak to Gabriel and I would get a call back within an hours time. I got no phone call and am unable to resolve this. My policy states my total deductible is $100 and this is a covered repair. Straub states I have to pay $251.27 which includes the deductible. Further Straub claimed W was negotiating a $75/hour rate whereas Straub charges $85/hour (which is far less than independent facility). I need this resolved immediately. Why is there such a discrepancy with between Straub and W? I paid $1255 for a premium policy and my contract states I have a per repair visit per deductible shown on my declaration page for ONLY $100. Call me immediately. 11/7/06 7:50 AM
http://www.warrantybynet.com/testimonials_feed.asp Terrible handling of claim - I was unable to resolve discrepancy in dealer's charges and what Warrantybynet would pay and instead of paying a $100 deductible I am being charged $251.27 - and after spending 40 minutes on the phone with Warrantybynet attempting to get a resolution, I was told a representative would call back before your office closed and after 1 hour 8 minutes I received no phone call and the office closed promptly at 5:00 Representatives were not helpful - I kept getting transferred to different departments and different representatives with no resolution! 11/08/06
Chances are good that your contract reads something to the effect of 'we will pay labor, based on customary charges'. This gives them the ability to say 'customary charge' is $75 per hour and that's all they'll pay. Some companies won't pay the 'diagnostic charge' often levied by a repair facility. This is money charged for time spent checking out your vehicle. Depending on your repair, you may also have to pay for fluids used. In the case of an intake reseal, we always change the engine and filter in case some coolant got in. Service contracts don't cover engine oil or filter.
I know it stinks, but I'll bet one or more of these is what you're running into.
Wow! Is this EVER a great thread!!! We bought an '06 Toyota Solara convertible at the end of July - it had 1885 miles (manager's wife was using it...) and bought an extended warranty from the dealership for a few reasons: 1) We did negotiate a reduced price from the first price offered; 2) We felt a convertible (and the nav system) might be very repair-prone; 3) (here's the kicker) We found out the car had a 'slight accident' in the service bay the morning we picked it up while it was being prepped for us (a Tundra 'rolled' down a ramp and into the front of our Solara...ouch! :sick: ). Yes, I know... we probably shouldn't have gone thru with the deal, but this was the ONLY '06 vert left within 800 miles - and we didn't want an '07 - we had traveled 5 hours to the dealership. The manager assured us there was no damage to the frame, the structural integrity of the car was intact, and the dealership would back this purchase totally (they are a very large, established, busy dealership).
Now I am finding out that we could have saved even more $$ by going with one of the other Toyota 'dealership-sold' warranties mentioned in this forum, and will probably make a switch. BUT... we bought the warranty for (what we thought at the time) good reasons, based on the style of car we bought. We know Toyota is terrifically reliable, and that's why we bought one, but for us, having the warranty made sense. And, yes, we could afford to repair the car if needed - but feel the repairs might very well be numerous and expensive. Out-of-state family medical situations have prevented me from having my local (and very trusted) mechanic, who has kept my '90 Maxima going, look at the frame to determine any damage. Anyway - sspiro and mitzi and others have been a great source of info - thank you! - and I just wanted to share my 'story' to show all buyers CAN'T be lumped together!
Also, I, too, considered Warranty Direct, but decided a 3rd party gamble isn't worth it for a few hundred dollars saved..
Put Up, Or Shut Up, Eh wrote: "Whenever there is a large claim with a service contract (a rarity), it has been a long drawn out PITA process, negotiating between the company that wants to send 'one of our' used parts and the customer demanding a shiny OEM one. I have what you might call 'field experience'".
Yes, you have field experience, but what makes you think it's generalizable to each and every potential or actual owner of an extended warranty and dealerships where such warranties are used? Again, I have no affiliation with Warranty Direct, but recently it paid a $1600.00 repair bill on my Audi TT with no out-of-the-ordinairy questions asked. The Audi dealer said the process was as smooth as silk. New parts were used and there was no discussion about using parts other than new and/or OEM. Warranty Direct paid the shop rate of $130.00 per hour as well as for a rental car. My Audi dealer tells me that it has had good experiences with a number of extended warranty companies including mine. I know, I know, because you refuse to account for my experience any other way, you'll say that I'm just lucky! But, so much for your experience as far as my case and my Audi dealer is concerned. Like your experience, your ability to see a more global picture in terms of extended warranties seems rather limited.
I will say again that the purchase of an extended warranty is an individual experience and should be based on an individual's unique circumstances. Going with the "law of averages" is great, if your car has a frequency of repair record and a part-cost record that falls within the first standard deviations on the bell curve. If you don't, it might be time to consider an extended warranty.
In terms of saving money in an interest-accruing account toward repairs, of course, that's one methodology, but it may not fit everyone's individual circumstances. At any rate, nothwithstanding the negative remarks written on this forum about extended warranties, mine has come through like a champ and I'm real sure I'm going to get more than my money's worth.
My dear Dragon, I never stated that "it's generalizeable to each and every potential or actual owner of an extended warranty and dealerships where such warranties are used?" I said the majority of people will not see a return of their money. Most people will fall into the categories I listed. My 90% number may be a little off, but from my vantage point, I'd say I'm pretty close. Your experience is in the minority, by my observations and those of other mechanic-types I've spoken with. If you think of what the business model for a service contract company must be (bring in more money than they shell out), you'll see what I mean.
I think that with service contracts, you are gambling with your money. You are betting that the repairs needed on your car post-warranty will exceed the price you pay for the service contract. The SC company is betting that it will make a profit (that the repairs will not exceed the money you paid). I, personally, would rather take my dough to Vegas. At least I'd have fun while I spent it.
You will notice that I make a distinction between 'Warranty' and 'Service Contract'. Warranty is what comes with your new vehicle. The manufacturer is guaranteeing the quality of the vehicle. A Service Contract is a company promising to repair parts of your car if they break. There is a big difference, both in law and in practice.
(btw, the title of my post was indicating the you wanted me to 'put up or shut up'. I was not telling you to shut up)
"I said the majority of people will not see a return of their money. Most people will fall into the categories I listed. My 90% number may be a little off, but from my vantage point, I'd say I'm pretty close. Your experience is in the minority, by my observations and those of other mechanic-types I've spoken with. If you think of what the business model for a service contract company must be (bring in more money than they shell out), you'll see what I mean."
I have duly noted your distinction between "extended warranty" and "service contract", but I will stick with "extended warranty" for the sake of continuity and because that's what I think it says on my contract (I don't have it handy at the moment).
Here we go again with the same argument over and over again. You talk about the "majority of people" that, apparently, you define as the *entire* population of potential and actual extended warranty owners grouped together. I want to talk about specific groupings of potential or actual extended warranty owners such as owners of Audi TTs, many BMW owners, and many Porsche and Mercedes owners whose cars may have greater-than-average frequency of repair records and/or greater-than-average cost per part replacement records. Within these groups, notice the word, "within", I think many, if not the majority of these owners stand a good probability of seeing and may very well see a return on their investment from an extended warranty. In the case of these owners who purchase extended warranties, losses incurred by extended warranty companies may be more than counter-balanced by the population of other vehicle owners who make no, few, and/or relatively inexpensive claims.
I understand what you're saying: people who buy service contracts for historically trouble-prone (read European) vehicles are more likely to get some money back than those who buy them for vehicles (usually Japanese) known to be reliable.
That makes sense to me. But I would imagine that a service contract for, say, an Audi will cost more than the equivalent contract for a Lexus. Otherwise, the issuing company will lose money & eventually go belly-up. Admittedly, I'm just guessing here. The last time I bought a service contract, Jerry Ford was in the White House. (Incidentally, the company folded before I could file a claim. That experience forever soured me on these things.)
But that's not really the issue. The question that folks ought to ask themselves is this: where is the value? What am I getting out of this transaction (the purchase of a service contract) that I couldn't provide for myself? Inevitably, someone will say "Peace of mind". But when it comes to financial peace of mind, can anything beat a fat, insured savings account with your name on it? All it takes is just a little discipline.
(Maybe that's the "value" that service contracts provide: a dose of artificial discipline for the financially challenged.)
That's typical of many 3rd party warranty companies. The one warranty I did buy for my son's Mustang was Warranty Gold, which went belly up. Last I heard the CEO is back in business under a different name selling the same warranties.
I'm supposed to give advice based on what happens to Audi/BMW/Porsche/Mercedes owners! I originally posted in reply to a guy who bought a JEEP. I daresay a healthy number ( *majority*, perhaps?) of Audi/BMW/Porsche/Mercedes owners trade in before their warranty expires, eschewing service contracts for more lucrative investments.
I hear what you're saying about certain manufacturers. I personally like the styling of many Chrysler products and if I ever buy one, I would certainly consider a Chrysler backed warranty. I owned one years ago that was a POS and friends have a Durango that has been problematic. But it does take quite a few repairs, even major ones, for Chrysler to lose money on a Chrysler backed warranty. Think of it this way, a new engine or tranny to you or me costs us several grand, but to the manufacturer way less.
For me, I didn't decide until the beginning of my fourth year of ownership that I wanted to keep the Audi TT beyond its factory warranty. I usually buy new cars every three years or so, but I must admit that I fell in love with this one and I found the styling timeless. So, that's my reason for not setting aside an account, upon purchasing, specifically for repairs to the vehicle after the factory warranty expired. This is probably not an uncommon scenario for a lot of people. Additionally, your points about "artificial discipline" and "peace of mind" probably come into play for a lot of people.
I recently purchased a 2005 Ford Focus wagon with 25000 miles on it, so it'll be out of the manufacturer warranty in about a year, the way I drive. I'm probably going to get an extended warranty for it since I plan to drive it for at least 3 years and it seems that Ford's reliability is iffy. I wonder if any of you have advice on the various 3rd party warrantors (WarrantyDirect, for example, or others) and whether I'd do well to go with them? Or try to purchase a warranty from Ford directly? Thank you for your advice.
Some people on this forum may advise you to have a rainy day fund, such as a savings account, for out-of-warranty repairs . If you do not want to or cannot do this, I think the Ford extended warranty would be your best bet although you'll want to do some research comparing various extended warranties. I have Warranty Direct and I have been pleased so far.
Once upon a time there was a great big company called Warranty Gold. They sold service contracts for cars and trucks. They had lots of money and promised all their customers that they were taken care off. Their money was safely tucked away in two different companies. There was no way their customers could ever be hurt or denied a claim. They were advertisers on this site, a spokesman for the company posted on this very forum for a few years. Many people here had concerns about Warranty Gold, but many others had glowing stories of how WG usually always paid their claims quickly and easily.
Then, one day, in the summer of 2003, the company that held most of their money declared bankruptcy. Well, Warranty Gold assured their customers that they were safe. ‘We’ll just find another administrator and our reinsurance will kick in’. They also kept selling contracts.
It turns out that this company holding WG’s money was what is called a Risk Retention Group. They aren’t bound by the same laws as insurance companies. This RRG was based in the Cayman Islands, so the money was tied up there, where the US Gov’t had no jurisdiction. It also turns out that WG has gone out of business, leaving many, many customers with very expensive pieces of paper.
Warranty Direct is backed by a Risk Retention Group as well. It is called National Service Contract Assurance. They have an AMBest rating of NR-4, which means that after AMBest downgraded them to a B-, they requested to no longer be rated. I wonder what we could deduce from that? Hmmm. WD is reinsured by Hannover Reinsurance, based in Ireland, graded A by AMBest. I’m not sure what Hannover’s role would be in case of trouble, but Warranty Gold’s ‘reinsurer’ proved to be useless to service contract owners.
Now, I don’t have a crystal ball, so the future is unknown, but my Pensieve is not broken. I can detect a pattern when I see one. (I recommend reading the old WG claims thread-it’s fascinating. Go from around post #400 to #1200 and you’ll see the progression from ‘It’s Great!’ to ‘those creeps took my money!’)
2) We felt a convertible (and the nav system) might be very repair-prone;
Be sure your convertible (top and mechanisms) and the navi system are covered. Many contracts do not cover such 'accessories'. You'll have to read your contract to find out.
A service contract won't cover damage as a result of an accident. (your third reason to buy a SC)
I'm glad you talked them down on the price.
"We know Toyota is terrifically reliable, and that's why we bought one, but for us, having the warranty made sense. And, yes, we could afford to repair the car if needed - but feel the repairs might very well be numerous and expensive." Aren't these conflicting statements?
"Warranty Direct is backed by a Risk Retention Group as well. It is called National Service Contract Assurance. They have an AMBest rating of NR-4, which means that after AMBest downgraded them to a B-, they requested to no longer be rated. I wonder what we could deduce from that? Hmmm. WD is reinsured by Hannover Reinsurance, based in Ireland, graded A by AMBest".
Being with Warranty Direct, I'm pleased that it's current reinsurer has an "A" rating. I can certainly deduce something from that! I also assume that Warranty Gold was not and is not illustrative of the entire extended warranty/service contract industry. If it was or is in any reader's opinion, I would appreciate you providing us other readers with hard data justifying your point of view for our edification.
Warranty Gold was insured (and administered) by National Warranty Insurance Group and owned by Interstate National Dealer Services. NWIG had an A rating from AMBest until about 1 week before they declared insolvency. INDS also had an A rating, and flaked out when NWIG did. WG held on for several months, making empty promises to their customers, until they finally hung out the old 'closed, your outta luck' sign. This is not conjecture or assumptions. You can read about it in the 'Warranty Gold Claims' thread here in the Smart Shopper section.
From the looks of the court documents (many of which are linked to or copied to the thread I have referenced), the reinsurer of Warranty Gold did ZIPPO when they declared bankruptcy.
There have been many service contract companies bite the dust over the last ten years. OneSource Auto Warranty, Warranty Gold, Triad Advantage, and Smart Choice are four that come to mind immediately.
I'm glad you're happy with Warranty Direct. Many happy returns. I have given my opinion and the reasoning behind it. Your insistance that this is a great company is starting to make me suspect we have a troll in the dungeon.
"There have been many service contract companies bite the dust over the last ten years. OneSource Auto Warranty, Warranty Gold, Triad Advantage, and Smart Choice are four that come to mind immediately."
That's four out of how many extended warranty/service contract companies? Simply quoting a number is rather meaningless without putting it into context such as a percentage of all extended warranty/service contract companies. Also, did these companies similarly leave contract holders in the lurch as did Warranty Gold?
As for your suspicions, just because I refuse to buy into your equal or greater insistence that extended warranty and service contract companies are suspect, that makes me a troll in the dungeon? Sorry, you can't dismiss my arguments that easily. Pay attention to my arguments without casting doubt on my alleged alliances. If my arguments hold up to logical scrutiny, what difference does my alliance make? But, I'll say it again, I am a Warranty Direct contract holder, satisfied thus far, with no other affiliation or association with Warranty Direct. And, if Warranty Direct tries to wiggle out of its contractual obligations to me, gives me or my repair facilities an unnecessrily hard time, or in any way tries to jack me around, I'll post my experience immediately on this forum as well as on a slue of other forums. As you may have noted, I'm not one to hold back the expressions of my satisfactions or disatisfactions.
The companies I cited did leave their customers hanging, just like WG. There are many service contract companies out there. Many of them are linked to each other. I have one, based in Florida, that has 6 different company names, all selling basically the same contracts with different cover pages. They all have the same address in Deerfield Beach. One company on the web (The Auto Club) is owned by the guy who used to own Warranty Gold. After he went 'bankrupt', he started another SCC. "If my arguments hold up to logical scrutiny, what difference does my alliance make? " Your arguments have been weak so far. You bought a service contract because you know in advance that your Audi will have big problems. (preexisting conditions aren't covered, so you must have a crystal ball)
You have questioned my use of the term "Majority", which means 'more than 50%', BTW. I originally posted to a guy who bought a Jeep, a domestic vehicle, relatively cheap to repair (certainly compared to a European car). You have leaned on Hannover's A rating to bolster your opinion, neglecting the fact that WG's reinsurer did nothing to help the people who were left holding the bag. Your argument, in a nutshell, has been "Warranty Direct paid my big claim, so everybody should have an extended warranty!" That's your personal experience. It does not fit that of the majority of car owners.
You want me to base my opinion on the experiences of Audi, BMW, Porsche, and Mercedes owners who have out-of-warranty vehicles. That group represents a small minority of what is out on the road right now. My opinion is based upon my experience, what I've read here, and what I've found during my research.
I did check out the Audi threads here. It was a quick read-the RWTIV thread has more posts. From the sound of it, Audi has issued a recall in regards to your IPC-you might check into that.
You've glossed over the fact that Warranty Direct has 'insured' itself with your money going to a RRG with an NR-4 rating with AMBest. This does not raise a red flag for you because you wish it not to. Those who were watching the WG fiasco can see that red flag a mile away.
"The companies I cited did leave their customers hanging, just like WG. There are many service contract companies out there. Many of them are linked to each other. I have one, based in Florida, that has 6 different company names, all selling basically the same contracts with different cover pages. They all have the same address in Deerfield Beach. One company on the web (The Auto Club) is owned by the guy who used to own Warranty Gold. After he went 'bankrupt', he started another SCC".
You cited FOUR companies (out of what total number of vehicle extended warranty and/or service contract companies?)! Then, citing one having six different names, you would have us believe that this indicts all of the extended warranty/service contract companies? No, I don't think so. It seems to me that you don't have any hard, global data to support your contentions. You seek to support your contentions by selecting just a few poorly run and/or bankrupted companies which is insufficient support for your argument and really means very little. This leads me to believe that, in fact, your premise is suspect and certainly your arguments are weak. Let me ask you this, in your experience, is there *any* third-party, extended warranty/service contract company that passes the muster for you? The readers here will, I'm sure, be interested in your response.
"You bought a service contract because you know in advance that your Audi will have big problems. (preexisting conditions aren't covered, so you must have a crystal ball)"
I didn't need a crystal ball. All I had to do was to speak to other Audi owners, review consumer magazines, and look at the repair history of my car. Although I have no hard data, prima facie, it would seem that a number of other vehicle owners do the same thing and then decide whether or not to buy an extended warranty. Please don't project your use of a crystal ball onto others.
"Your argument, in a nutshell, has been "Warranty Direct paid my big claim, so everybody should have an extended warranty!" That's your personal experience. It does not fit that of the majority of car owners"
Excuse me again. What majority? Also, would you please post for us the results of the global car owners' survey that you took documenting your majority results? You are the one who is very obviously speaking out a limited experiential base and then seeking to generalize your apparent biases to the majority of car owners with extended warranties/service contracts. I am not the one making the inflated claims that you are. I am simply asking you to justify your claims in a reasonable fashion without generalization or extrapolation. Yes, my experience with warranty Direct has been good so far, but I am certainly not claiming that the majority of the extended warranty/service contracts companies are good. I don't know, but the point is either do you but you portray yourself as having that knowledge. Justify your portrayal with acceptable data.
It seems that you want to try again to push me into that "troll in the dungeon" category by having me cheerlead for and defend Warranty Direct. I researched the company before purchasing an extended warranty from it and was very satisfied with their ratings, testimonials, but, more so, with the feedback that I had gotten about it from other owners of their plans, three Audi dealers, and by reading the forums. If you want to indict their reputation, please free to do so, but you'll pardon me if I view your indictments with a bit of suspiciousness.
I have stated my opinion. It is based on my years of experience at a Chevrolet dealership. It is based on extensive research into service contract companies. It is based upon the anecdotes supplied by hundreds of posters on several web forums. Since I only speak English, this cannot be a global investigation, nor does it have to be. From these sources, I can say with certainty that the majority (again, over 50%) of service contract owners will not see a return of their investment. How else could the few who have stayed in business still be running? A money tree in the back yard? It's a faulty business model, which, time and time again, has led to customers being left holding the bag.
Warranty Direct's affiliation with a risk retention group, and the fact that their parent company also owned Warranty Gold will always cause me to recommend against them.
You are welcome to be a cheerleader for whomever you choose. I don't care.
It is based on my years of experience at a Chevrolet dealership. It is based on extensive research into service contract companies. It is based upon the anecdotes supplied by hundreds of posters on several web forums."
Hardly based on random samples or objective data, so, you'll excuse me if I don't give your arguments an awful lot of credence. Also, you couldn't name EVEN ONE third-party extended warranty company that you can recommend? Very interesting.
I think we can leave it at that. I've enjoyed bantering with you, but I don't want to hold this thread hostage and I'm pretty sure the moderator would like to see other contributers voice their opinions.
I don't make recommendations for service contract companies because I don't want to be seen as an advertiser for anyone. I have stated in the past that I have seen a few companies deal with me in a straightforward way. There have been situations where I have had a positive experience with a company, only to read here several people with complaints about them. I have also had companies that wanted to send me used parts, argue about labor time when my book was the same as theirs, make me wait a month for payment, and make customers wait a week for an adjuster.
Your opinion is not based on random samples or objective data, either. You even want to talk about what is right for a fraction of the car-buying public. You are hardly an objective observer. Your position is based on your experience as a WD customer. You have had 14 posts on this forum, all aimed at persuading people that service contracts, especially WD's, are great. Most of my posts have been cautionary or explanatory.
in a reasonable manner if you're going to indict an entire industry. That's my point in my posts. The fact is that you can't prove your point in any sort of logically-acceptable manner other than your experiences. Enough said. I'm not going to prolong your agony. This will be my last post. Have fun with your games!
There have been many service contract companies bite the dust over the last ten years. OneSource Auto Warranty, Warranty Gold, Triad Advantage, and Smart Choice are four that come to mind immediately.
I just saw an article in a used car trade paper that said additional non-manufacturer warranty companies have closed up shop, leaving folks holding the bag once again....
I find the non-mfg warranty vs aftermarket warranty debate fascinating. What incentive does the non-mfg company have to pay claims and keep people happy? The MFG backed warranty has a deep vested interest in keeping their warranty customers happy so they buy another car....What incentive does the non-mfg warranty company have to pay claims and service customers? We know of dozens of aftermarket companies that have vanished in the middle of the night...do we know of any mfg backed warranties that vanished??
Who cares if the aftermarket companies are backed by offshore witch doctors.....who wants to chase down payment overseas or in bankruptcy court for some repair work?
I agree. If I ever bought a service contract, it would definitely be a manufacturer-backed one.
I can't get the whole story from your link, just the headlines. The 'full story' linkie-doo takes me to more headlines. Do I have to join up or something?
Who cares if the aftermarket companies are backed by offshore witch doctors You've got a point there... I do think the ones backed by RRGs are more volatile snake oil though.
I don't want to hold this thread hostage and I'm pretty sure the moderator would like to see other contributers voice their opinions.
The moderator(s) would simply like to see the volume lowered in here, thanks.
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I would recommend you do an internet search for Ford ESP. There are several authorized Ford dealers that offer discounted factory backed Ford ESP warranties. This could save you 20-40% of the 'list' price your local dealer might quote you. In some cases you might avoid paying sales tax on the purchase as well. I think you quailfy for the Ford ESP warranty as long as your vehicle is still under the original Ford Warranty.
Smartypants! :P I wonder, though, would GM have bought the service contracts when they bought Daewoo? Any Daewoo customers with service contracts out there?
I agree with you. Short or long term, this car, or on all the cars you have bought you will never get back close to what you pay for extended warranties. They exclude too much, and your regular warranty hacks up a lot of what you think you are buying.
They make huge profits by selling these warranties and that is why they push them so hard. I never buy an extended warranty on anything and I am way ahead with that decision. It is your money and your decision. When you sell the car have you ever though about how much those extended warrnaties have cost you and if you saved anything during that period.
Save the money that the warranty costs and use that for repairs.
ArmyDave: Be careful! You saw where it got me to say such things-and I just said 'most people'. But I really gotta agree with ya for the most part! :shades:
Nice try but you don't win the prize. GM purchased Daewoo and Honored all Daewoo warranties thru Chevy dealers....unlike the aftermarket companies that just vanish.
Nice post. As one who got burned by WG I can relate. A couple things you left out about them.
- It became public knowledge in Sept 2003 that WG was not processing claims. They told folks who had claims that they can't pay them now but they will. Yet they continued to sell policies and deduct premiums from policy holders bank accounts.
- When some people tried to recoup their money as a charge back on their credit card, WG fought it saying, "we're going to pay eventually".
- They were not licensed to sell these policies in several states, yet continued to do so.
The reason I bought a WG contract was that two co-workers had policies with them and had several claims with them paid with no problems. This was the first Ford I had bought in awhile, it was for my son, and I wasn't sure if it would be reliable.
I learned a hard lesson in life, but not too expensive, about $800.
Yeah, that's why it's critical to do a lot of research on these companies. At the least, you gotta check out their and their reinsurer's ratings with the Better Business Bureau, Poor's, etc. Theres nothing like factory warranty though.
I found the past few pages of discussion interesting. I agree, non-MF service contracts have a well-known bad-rap for poor service...
What I don't understand is why this persists? The whole point of auto service contracts is the same premise of any other insurance we purchase... home/auto/apartment... We gamble that the low overall cost will not be too much but will protect us from huge costs that may not happen, but if they do, would be financially painful. We all understand that insurance companies make a profit and thus must charge more than their customers recoup...but we still purchase insurance to cover those biggies... If the company starts to go under, it raises its rates...why can't these companies do the same?
So, why then, has extended repair contract companies not improved in reliability and ease? I for one, would love to purchase one that will pay for bills over $2K but nothing below... kind of a disaster auto policy...
There is no difference between manufacturer and non-MF extended service agreements. I'm in this business since 1997. I was an adjuster for GMPP (General Motors) and for the company known as "RYAN Warranty". Independent companies pay more for their adjusters. There are different contract levels from cheap (powertrain) to expensive (exclusionary). DO NOT put too much hope into low level coverages. Read what it says. If it's not listed - it's not covered. Same rule applies everywhere. Every company wants to make money on their product. Since domestic models have more problems -contracts for them are more expensive. Contracts for asian models are usually cheap especially if you buy them on a brand new car at the time of purchase. If you come back later or buy near new car - there is a mark up. I want everyone to know that dealers are allowed to mark up the price to UNLIMITED amount. Only in Florida dealers are not allowed to mark it up over MSRP. Warranty company only collects DEALER COST but regular customer won't see it. MSRP is usually twice higher comparing to dealer cost. Anything beyond dealer cost goes to the pocket of a salesperson. If I would want to buy extended contract I would offer the dealer $100 over his cost. If he refuses at first I would mention few names of other companies I'm considering and that "promised me a contract with $100 over dealer cost". Most dealers would stop you at the exit door trying to make a deal. I would ask for DEALER COST RATE BOOK to make sure they don't try anything funny. Once you sign papers expect the explanation for your contract in the mail. Make sure it's what you wanted. Usually you can cancel and get a full refund within 60 days.
There is no difference between manufacturer and non-MF extended service agreements.
One big difference is that the manufacturer will most likely still be in business honoring their warranty when its in effect. Non Manufacturer warranty companies have a nasty habit of disappearing.
Wow I just posted two posts in a row to first time posters. I wonder if anything is up.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
It persists because people want to be taken care of, and if you couch it right, you can get alot of money out of them. Your car could break down when it's out of warranty, it probably will. You could have a high bill for repair. (see how much brakes, or an engine, or a transmission can cost?) You need to protect yourself, or better yet, I'll protect you. (you owe it to your family) Just give me a few (40)dollars a month for the next couple of (4) years (it's only pennies a day!), and I'll take care of you. (as long as you follow my rules, and I decide to stay in business, see pages 2-6 of the contract)
Great point. It just tells you that you have to do your homework when ur picking a non-MF s.a. I agree with the posts that state you can't diss the whole non-MF industry because of the ones that disappeared, but you better be cautious.
You know what knocks me out, too? I had to insist to the business manager of the Chevy dealer where I bought my ride that I wanted a GM extended warranty. He was pushing some other extended warranty that I never heard of. There must've been more money in it for him. That's a crock.
I wanted a GM extended warranty. He was pushing some other extended warranty that I never heard of. There must've been more money in it for him. That's a crock.
You made a good decision. Generally the aftermarket warranties cost less than the MFG brand ext warranties...Of course no amount of savings makes up for a company that isnt around to honor the warranty. Almost every aftermarket warranty company that has vanished appeared to have good ratings and solid backing...
My Porsche 911 C4S is about to run out of mfg warranty--it's a 2003. The dealership is offering an extended warranty through Warrantech. Has anyone had any experience with them?
I notice that the stock of Warrantech has been performing poorly, and is about 60 cents a share.
Should I get an extended warranty? :confuse: The car has been reliable. I only have 11,500 miles.
You won't find anyone hear that would recommend anything but a manufacturer backed warranty. Some of us got burned by the Warranty Gold fiasco. If Porche sells an ext. warranty and it gives you peace of mind, then go for it. Only you can answer that.
Comments
Whenever there is a large claim with a service contract (a rarity), it has been a long drawn out PITA process, negotiating between the company that wants to send 'one of our' used parts and the customer demanding a shiny OEM one.
I have what you might call 'field experience'.
(thanks for the backup, Mikefm and Jimbres
Suppose that I buy a new European luxury car today. I'd like to keep the car for a few years beyond the expiration of the (typically) 4-year manufacturer's warranty, but I'm afraid that this will expose me to several thousand dollars in repair costs. Since I have 4 years to prepare for this, why not use that time to build up my savings? If I deposit $100 per month for 48 months into an account paying 4% interest (some of the online savings accounts, such as EmigrantDirect & HSBC, are paying over 5%), I'll have almost $5,200 by the time the factory warranty runs out.
Keep in mind that $100 per month is only $3.29 per day. Wouldn't you agree that anyone who can afford a luxury car should have no trouble putting aside that modest amount of money? And each dollar per day that you can add to that will give you an extra $1,558 at the end of 4 years. (I'm using Excel's future value formula to calculate this.)
Why pay someone else to do something that you can - & certainly should - do yourself?
http://www.warrantybynet.com/form.asp
Have car in repair and your adjuster Gabriel spoke to my authorized repair dealersip, Straub Lincoln. Straub states Warantybynet ("W") is negotiating rates and refuses to pay $151.27 in a registered repair. I called Vann at 3:25 my time who transferred me to Curtis and at 3:48 my time I was told Curtis needed to speak to Gabriel and I would get a call back within an hours time. I got no phone call and am unable to resolve this. My policy states my total deductible is $100 and this is a covered repair. Straub states I have to pay $251.27 which includes the deductible. Further Straub claimed W was negotiating a $75/hour rate whereas Straub charges $85/hour (which is far less than independent facility). I need this resolved immediately. Why is there such a discrepancy with between Straub and W? I paid $1255 for a premium policy and my contract states I have a per repair visit per deductible shown on my declaration page for ONLY $100. Call me immediately. 11/7/06 7:50 AM
http://www.warrantybynet.com/testimonials_feed.asp
Terrible handling of claim - I was unable to resolve discrepancy in dealer's charges and what Warrantybynet would pay and instead of paying a $100 deductible I am being charged $251.27 - and after spending 40 minutes on the phone with Warrantybynet attempting to get a resolution, I was told a representative would call back before your office closed and after 1 hour 8 minutes I received no phone call and the office closed promptly at 5:00
Representatives were not helpful - I kept getting transferred to different departments and different representatives with no resolution! 11/08/06
I know it stinks, but I'll bet one or more of these is what you're running into.
We bought an '06 Toyota Solara convertible at the end of July - it had 1885 miles (manager's wife was using it...) and bought an extended warranty from the dealership for a few reasons:
1) We did negotiate a reduced price from the first price offered;
2) We felt a convertible (and the nav system) might be very repair-prone;
3) (here's the kicker) We found out the car had a 'slight accident' in the service bay the morning we picked it up while it was being prepped for us (a Tundra 'rolled' down a ramp and into the front of our Solara...ouch! :sick: ).
Yes, I know... we probably shouldn't have gone thru with the deal, but this was the ONLY '06 vert left within 800 miles - and we didn't want an '07 - we had traveled 5 hours to the dealership. The manager assured us there was no damage to the frame, the structural integrity of the car was intact, and the dealership would back this purchase totally (they are a very large, established, busy dealership).
Now I am finding out that we could have saved even more $$ by going with one of the other Toyota 'dealership-sold' warranties mentioned in this forum, and will probably make a switch. BUT... we bought the warranty for (what we thought at the time) good reasons, based on the style of car we bought. We know Toyota is terrifically reliable, and that's why we bought one, but for us, having the warranty made sense. And, yes, we could afford to repair the car if needed - but feel the repairs might very well be numerous and expensive. Out-of-state family medical situations have prevented me from having my local (and very trusted) mechanic, who has kept my '90 Maxima going, look at the frame to determine any damage.
Anyway - sspiro and mitzi and others have been a great source of info - thank you!
Also, I, too, considered Warranty Direct, but decided a 3rd party gamble isn't worth it for a few hundred dollars saved..
Thanks again!
Yes, you have field experience, but what makes you think it's generalizable to each and every potential or actual owner of an extended warranty and dealerships where such warranties are used? Again, I have no affiliation with Warranty Direct, but recently it paid a $1600.00 repair bill on my Audi TT with no out-of-the-ordinairy questions asked. The Audi dealer said the process was as smooth as silk. New parts were used and there was no discussion about using parts other than new and/or OEM. Warranty Direct paid the shop rate of $130.00 per hour as well as for a rental car. My Audi dealer tells me that it has had good experiences with a number of extended warranty companies including mine. I know, I know, because you refuse to account for my experience any other way, you'll say that I'm just lucky! But, so much for your experience as far as my case and my Audi dealer is concerned. Like your experience, your ability to see a more global picture in terms of extended warranties seems rather limited.
I will say again that the purchase of an extended warranty is an individual experience and should be based on an individual's unique circumstances. Going with the "law of averages" is great, if your car has a frequency of repair record and a part-cost record that falls within the first standard deviations on the bell curve. If you don't, it might be time to consider an extended warranty.
In terms of saving money in an interest-accruing account toward repairs, of course, that's one methodology, but it may not fit everyone's individual circumstances. At any rate, nothwithstanding the negative remarks written on this forum about extended warranties, mine has come through like a champ and I'm real sure I'm going to get more than my money's worth.
I never stated that "it's generalizeable to each and every potential or actual owner of an extended warranty and dealerships where such warranties are used?"
I said the majority of people will not see a return of their money. Most people will fall into the categories I listed. My 90% number may be a little off, but from my vantage point, I'd say I'm pretty close. Your experience is in the minority, by my observations and those of other mechanic-types I've spoken with. If you think of what the business model for a service contract company must be (bring in more money than they shell out), you'll see what I mean.
I think that with service contracts, you are gambling with your money. You are betting that the repairs needed on your car post-warranty will exceed the price you pay for the service contract. The SC company is betting that it will make a profit (that the repairs will not exceed the money you paid). I, personally, would rather take my dough to Vegas. At least I'd have fun while I spent it.
You will notice that I make a distinction between 'Warranty' and 'Service Contract'. Warranty is what comes with your new vehicle. The manufacturer is guaranteeing the quality of the vehicle. A Service Contract is a company promising to repair parts of your car if they break. There is a big difference, both in law and in practice.
(btw, the title of my post was indicating the you wanted me to 'put up or shut up'. I was not telling you to shut up)
I have duly noted your distinction between "extended warranty" and "service contract", but I will stick with "extended warranty" for the sake of continuity and because that's what I think it says on my contract (I don't have it handy at the moment).
Here we go again with the same argument over and over again. You talk about the "majority of people" that, apparently, you define as the *entire* population of potential and actual extended warranty owners grouped together. I want to talk about specific groupings of potential or actual extended warranty owners such as owners of Audi TTs, many BMW owners, and many Porsche and Mercedes owners whose cars may have greater-than-average frequency of repair records and/or greater-than-average cost per part replacement records. Within these groups, notice the word, "within", I think many, if not the majority of these owners stand a good probability of seeing and may very well see a return on their investment from an extended warranty. In the case of these owners who purchase extended warranties, losses incurred by extended warranty companies may be more than counter-balanced by the population of other vehicle owners who make no, few, and/or relatively inexpensive claims.
That makes sense to me. But I would imagine that a service contract for, say, an Audi will cost more than the equivalent contract for a Lexus. Otherwise, the issuing company will lose money & eventually go belly-up. Admittedly, I'm just guessing here. The last time I bought a service contract, Jerry Ford was in the White House. (Incidentally, the company folded before I could file a claim. That experience forever soured me on these things.)
But that's not really the issue. The question that folks ought to ask themselves is this: where is the value? What am I getting out of this transaction (the purchase of a service contract) that I couldn't provide for myself? Inevitably, someone will say "Peace of mind". But when it comes to financial peace of mind, can anything beat a fat, insured savings account with your name on it? All it takes is just a little discipline.
(Maybe that's the "value" that service contracts provide: a dose of artificial discipline for the financially challenged.)
Sorry, but I just don't see the point.
Then, one day, in the summer of 2003, the company that held most of their money declared bankruptcy. Well, Warranty Gold assured their customers that they were safe. ‘We’ll just find another administrator and our reinsurance will kick in’. They also kept selling contracts.
It turns out that this company holding WG’s money was what is called a Risk Retention Group. They aren’t bound by the same laws as insurance companies. This RRG was based in the Cayman Islands, so the money was tied up there, where the US Gov’t had no jurisdiction. It also turns out that WG has gone out of business, leaving many, many customers with very expensive pieces of paper.
Warranty Direct is backed by a Risk Retention Group as well. It is called National Service Contract Assurance. They have an AMBest rating of NR-4, which means that after AMBest downgraded them to a B-, they requested to no longer be rated. I wonder what we could deduce from that? Hmmm.
WD is reinsured by Hannover Reinsurance, based in Ireland, graded A by AMBest. I’m not sure what Hannover’s role would be in case of trouble, but Warranty Gold’s ‘reinsurer’ proved to be useless to service contract owners.
Now, I don’t have a crystal ball, so the future is unknown, but my Pensieve is not broken. I can detect a pattern when I see one.
(I recommend reading the old WG claims thread-it’s fascinating. Go from around post #400 to #1200 and you’ll see the progression from ‘It’s Great!’ to ‘those creeps took my money!’)
Be sure your convertible (top and mechanisms) and the navi system are covered. Many contracts do not cover such 'accessories'. You'll have to read your contract to find out.
A service contract won't cover damage as a result of an accident. (your third reason to buy a SC)
I'm glad you talked them down on the price.
"We know Toyota is terrifically reliable, and that's why we bought one, but for us, having the warranty made sense. And, yes, we could afford to repair the car if needed - but feel the repairs might very well be numerous and expensive."
Aren't these conflicting statements?
WD is reinsured by Hannover Reinsurance, based in Ireland, graded A by AMBest".
Being with Warranty Direct, I'm pleased that it's current reinsurer has an "A" rating. I can certainly deduce something from that! I also assume that Warranty Gold was not and is not illustrative of the entire extended warranty/service contract industry. If it was or is in any reader's opinion, I would appreciate you providing us other readers with hard data justifying your point of view for our edification.
There's no need to be confrontational. A simple request would suffice.
tidester, host
NWIG had an A rating from AMBest until about 1 week before they declared insolvency. INDS also had an A rating, and flaked out when NWIG did. WG held on for several months, making empty promises to their customers, until they finally hung out the old 'closed, your outta luck' sign.
This is not conjecture or assumptions. You can read about it in the 'Warranty Gold Claims' thread here in the Smart Shopper section.
From the looks of the court documents (many of which are linked to or copied to the thread I have referenced), the reinsurer of Warranty Gold did ZIPPO when they declared bankruptcy.
There have been many service contract companies bite the dust over the last ten years. OneSource Auto Warranty, Warranty Gold, Triad Advantage, and Smart Choice are four that come to mind immediately.
I'm glad you're happy with Warranty Direct. Many happy returns. I have given my opinion and the reasoning behind it. Your insistance that this is a great company is starting to make me suspect we have a troll in the dungeon.
That's four out of how many extended warranty/service contract companies? Simply quoting a number is rather meaningless without putting it into context such as a percentage of all extended warranty/service contract companies. Also, did these companies similarly leave contract holders in the lurch as did Warranty Gold?
As for your suspicions, just because I refuse to buy into your equal or greater insistence that extended warranty and service contract companies are suspect, that makes me a troll in the dungeon? Sorry, you can't dismiss my arguments that easily. Pay attention to my arguments without casting doubt on my alleged alliances. If my arguments hold up to logical scrutiny, what difference does my alliance make? But, I'll say it again, I am a Warranty Direct contract holder, satisfied thus far, with no other affiliation or association with Warranty Direct. And, if Warranty Direct tries to wiggle out of its contractual obligations to me, gives me or my repair facilities an unnecessrily hard time, or in any way tries to jack me around, I'll post my experience immediately on this forum as well as on a slue of other forums. As you may have noted, I'm not one to hold back the expressions of my satisfactions or disatisfactions.
One company on the web (The Auto Club) is owned by the guy who used to own Warranty Gold. After he went 'bankrupt', he started another SCC.
"If my arguments hold up to logical scrutiny, what difference does my alliance make? "
Your arguments have been weak so far.
You bought a service contract because you know in advance that your Audi will have big problems. (preexisting conditions aren't covered, so you must have a crystal ball)
You have questioned my use of the term "Majority", which means 'more than 50%', BTW. I originally posted to a guy who bought a Jeep, a domestic vehicle, relatively cheap to repair (certainly compared to a European car).
You have leaned on Hannover's A rating to bolster your opinion, neglecting the fact that WG's reinsurer did nothing to help the people who were left holding the bag.
Your argument, in a nutshell, has been "Warranty Direct paid my big claim, so everybody should have an extended warranty!"
That's your personal experience. It does not fit that of the majority of car owners.
You want me to base my opinion on the experiences of Audi, BMW, Porsche, and Mercedes owners who have out-of-warranty vehicles. That group represents a small minority of what is out on the road right now. My opinion is based upon my experience, what I've read here, and what I've found during my research.
I did check out the Audi threads here. It was a quick read-the RWTIV thread has more posts. From the sound of it, Audi has issued a recall in regards to your IPC-you might check into that.
You've glossed over the fact that Warranty Direct has 'insured' itself with your money going to a RRG with an NR-4 rating with AMBest. This does not raise a red flag for you because you wish it not to. Those who were watching the WG fiasco can see that red flag a mile away.
One company on the web (The Auto Club) is owned by the guy who used to own Warranty Gold. After he went 'bankrupt', he started another SCC".
You cited FOUR companies (out of what total number of vehicle extended warranty and/or service contract companies?)! Then, citing one having six different names, you would have us believe that this indicts all of the extended warranty/service contract companies? No, I don't think so. It seems to me that you don't have any hard, global data to support your contentions. You seek to support your contentions by selecting just a few poorly run and/or bankrupted companies which is insufficient support for your argument and really means very little. This leads me to believe that, in fact, your premise is suspect and certainly your arguments are weak. Let me ask you this, in your experience, is there *any* third-party, extended warranty/service contract company that passes the muster for you? The readers here will, I'm sure, be interested in your response.
"You bought a service contract because you know in advance that your Audi will have big problems. (preexisting conditions aren't covered, so you must have a crystal ball)"
I didn't need a crystal ball. All I had to do was to speak to other Audi owners, review consumer magazines, and look at the repair history of my car. Although I have no hard data, prima facie, it would seem that a number of other vehicle owners do the same thing and then decide whether or not to buy an extended warranty. Please don't project your use of a crystal ball onto others.
"Your argument, in a nutshell, has been "Warranty Direct paid my big claim, so everybody should have an extended warranty!" That's your personal experience. It does not fit that of the majority of car owners"
Excuse me again. What majority? Also, would you please post for us the results of the global car owners' survey that you took documenting your majority results? You are the one who is very obviously speaking out a limited experiential base and then seeking to generalize your apparent biases to the majority of car owners with extended warranties/service contracts. I am not the one making the inflated claims that you are. I am simply asking you to justify your claims in a reasonable fashion without generalization or extrapolation. Yes, my experience with warranty Direct has been good so far, but I am certainly not claiming that the majority of the extended warranty/service contracts companies are good. I don't know, but the point is either do you but you portray yourself as having that knowledge. Justify your portrayal with acceptable data.
It seems that you want to try again to push me into that "troll in the dungeon" category by having me cheerlead for and defend Warranty Direct. I researched the company before purchasing an extended warranty from it and was very satisfied with their ratings, testimonials, but, more so, with the feedback that I had gotten about it from other owners of their plans, three Audi dealers, and by reading the forums. If you want to indict their reputation, please free to do so, but you'll pardon me if I view your indictments with a bit of suspiciousness.
It is based on my years of experience at a Chevrolet dealership. It is based on extensive research into service contract companies. It is based upon the anecdotes supplied by hundreds of posters on several web forums. Since I only speak English, this cannot be a global investigation, nor does it have to be. From these sources, I can say with certainty that the majority (again, over 50%) of service contract owners will not see a return of their investment. How else could the few who have stayed in business still be running? A money tree in the back yard? It's a faulty business model, which, time and time again, has led to customers being left holding the bag.
Warranty Direct's affiliation with a risk retention group, and the fact that their parent company also owned Warranty Gold will always cause me to recommend against them.
You are welcome to be a cheerleader for whomever you choose. I don't care.
It is based on my years of experience at a Chevrolet dealership. It is based on extensive research into service contract companies. It is based upon the anecdotes supplied by hundreds of posters on several web forums."
Hardly based on random samples or objective data, so, you'll excuse me if I don't give your arguments an awful lot of credence. Also, you couldn't name EVEN ONE third-party extended warranty company that you can recommend? Very interesting.
I think we can leave it at that. I've enjoyed bantering with you, but I don't want to hold this thread hostage and I'm pretty sure the moderator would like to see other contributers voice their opinions.
I have stated in the past that I have seen a few companies deal with me in a straightforward way. There have been situations where I have had a positive experience with a company, only to read here several people with complaints about them. I have also had companies that wanted to send me used parts, argue about labor time when my book was the same as theirs, make me wait a month for payment, and make customers wait a week for an adjuster.
Your opinion is not based on random samples or objective data, either. You even want to talk about what is right for a fraction of the car-buying public. You are hardly an objective observer. Your position is based on your experience as a WD customer. You have had 14 posts on this forum, all aimed at persuading people that service contracts, especially WD's, are great. Most of my posts have been cautionary or explanatory.
I just saw an article in a used car trade paper that said additional non-manufacturer warranty companies have closed up shop, leaving folks holding the bag once again....
link title
I find the non-mfg warranty vs aftermarket warranty debate fascinating. What incentive does the non-mfg company have to pay claims and keep people happy? The MFG backed warranty has a deep vested interest in keeping their warranty customers happy so they buy another car....What incentive does the non-mfg warranty company have to pay claims and service customers? We know of dozens of aftermarket companies that have vanished in the middle of the night...do we know of any mfg backed warranties that vanished??
Who cares if the aftermarket companies are backed by offshore witch doctors.....who wants to chase down payment overseas or in bankruptcy court for some repair work?
I can't get the whole story from your link, just the headlines. The 'full story' linkie-doo takes me to more headlines. Do I have to join up or something?
Who cares if the aftermarket companies are backed by offshore witch doctors You've got a point there...
I do think the ones backed by RRGs are more volatile snake oil though.
The moderator(s) would simply like to see the volume lowered in here, thanks.
MODERATOR /ADMINISTRATOR
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2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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Daewoo, anyone?...Sorry, couldn't resist.
I wonder, though, would GM have bought the service contracts when they bought Daewoo? Any Daewoo customers with service contracts out there?
They make huge profits by selling these warranties and that is why they push them so hard. I never buy an extended warranty on anything and I am way ahead with that decision. It is your money and your decision. When you sell the car have you ever though about how much those extended warrnaties have cost you and if you saved anything during that period.
Save the money that the warranty costs and use that for repairs.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
ArmyDave: Be careful! You saw where it got me to say such things-and I just said 'most people'.
But I really gotta agree with ya for the most part! :shades:
Nice try but you don't win the prize.
GM purchased Daewoo and Honored all Daewoo warranties thru Chevy dealers....unlike the aftermarket companies that just vanish.
- It became public knowledge in Sept 2003 that WG was not processing claims. They told folks who had claims that they can't pay them now but they will. Yet they continued to sell policies and deduct premiums from policy holders bank accounts.
- When some people tried to recoup their money as a charge back on their credit card, WG fought it saying, "we're going to pay eventually".
- They were not licensed to sell these policies in several states, yet continued to do so.
The reason I bought a WG contract was that two co-workers had policies with them and had several claims with them paid with no problems. This was the first Ford I had bought in awhile, it was for my son, and I wasn't sure if it would be reliable.
I learned a hard lesson in life, but not too expensive, about $800.
What I don't understand is why this persists? The whole point of auto service contracts is the same premise of any other insurance we purchase... home/auto/apartment... We gamble that the low overall cost will not be too much but will protect us from huge costs that may not happen, but if they do, would be financially painful. We all understand that insurance companies make a profit and thus must charge more than their customers recoup...but we still purchase insurance to cover those biggies... If the company starts to go under, it raises its rates...why can't these companies do the same?
So, why then, has extended repair contract companies not improved in reliability and ease? I for one, would love to purchase one that will pay for bills over $2K but nothing below... kind of a disaster auto policy...
One big difference is that the manufacturer will most likely still be in business honoring their warranty when its in effect. Non Manufacturer warranty companies have a nasty habit of disappearing.
Wow I just posted two posts in a row to first time posters. I wonder if anything is up.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Your car could break down when it's out of warranty, it probably will. You could have a high bill for repair. (see how much brakes, or an engine, or a transmission can cost?) You need to protect yourself, or better yet, I'll protect you. (you owe it to your family) Just give me a few (40)dollars a month for the next couple of (4) years (it's only pennies a day!), and I'll take care of you. (as long as you follow my rules, and I decide to stay in business, see pages 2-6 of the contract)
You know what knocks me out, too? I had to insist to the business manager of the Chevy dealer where I bought my ride that I wanted a GM extended warranty. He was pushing some other extended warranty that I never heard of. There must've been more money in it for him. That's a crock.
You made a good decision.
Generally the aftermarket warranties cost less than the MFG brand ext warranties...Of course no amount of savings makes up for a company that isnt around to honor the warranty. Almost every aftermarket warranty company that has vanished appeared to have good ratings and solid backing...
...just bears repeating.
I notice that the stock of Warrantech has been performing poorly, and is about 60 cents a share.
Should I get an extended warranty? :confuse: The car has been reliable. I only have 11,500 miles.
You won't find anyone hear that would recommend anything but a manufacturer backed warranty. Some of us got burned by the Warranty Gold fiasco. If Porche sells an ext. warranty and it gives you peace of mind, then go for it. Only you can answer that.