GRAPHICGUY-Are you REALLY that concerned with the interest you'd earn on $1500 over 6 years....come on now. You seem to be really digging now to find ways to prove your point. I'm not going to name all the parts that would cost over $1500, because there are too many. A/C units, any power option, alternator, any computer or control module on some models after parts and labor would hit that mark and thats for one incident. Drivetrain warranty's only cover the INTERNAL parts of the engine and transmission....basically the stuff that never goes bad.
Something tells me that if you were in front of the service advisor and he just told you your car with 49000 miles needed a $2000 repair, you'd probably flip out and expect it paid for by the dealer. Then go tell everyone how bad of a place it is because they wont "stand by" their product. In all my years in the business i've never seen anyone willingly pay something like that with no objection or anything.
Thats not an attack on you whatsoever, it just seems your saying some odd things.
A $1500 warranty would run you about $250 for each year of coverage.
No, it won't. If you are referring to 6-year coverage, it will be exactly double of that ($500/each year it is in force) assuming 3/36 from manufacturer. The car I have currently has 5/60 powertrain, which basically reduces the benefit, or increases the cost per year it actually is in force. For your number be correct, it would have to be 6 years AFTER mfr coverage expiration, i.e. 9 year warranty on 3/36 or 11 year or 5/60. Be careful with math - too many engineers on this website :P
What if I told you that if you never use your extended warranty I will give you back all of your money. We have a money back gauruntee on our extended warranties. If you use it than you don't get any money back. If you don't you 100% of your money back
What's your guesstimate on the percentage of people who get their money back greenpea? I can see a lot of people pulling their hair out on trying to decide what to do, i.e they're looking at a $750 repair with about 8 months of warranty left... can't decide whether to turn it in or not.
GRAPHICGUY-Are you REALLY that concerned with the interest you'd earn on $1500 over 6 years
Lets see - $1500@3.5%/year times 6 years comes to about $300, which would pay for at least one minor incident. I wouldn't call it totally insignificant. Put in something better, like a 5% CD and you are pushing five hundred.
Ahhh, the magic of numbers - can be twisted each way. Salespeople always sell us "per month", I always multiply it by 12 and get per year.
Doesn't Impala have 5/100 on powertrain? So, from major components, the $1500 covers sixth year powertrain and three years of electrical and AC. Wow, what a deal :sick:
The reason why salespeople use "per month" is because most people finance. Whats the point of negotating the total price for a $25000 car if you can only afford $300 a month. Some people take the "total amount" approach and really get disappointed when they realize its way out of their montly budget.
Sure, but then as a math literate I know how much $300/month can buy me. Don't get me wrong - you do your job and if to sell means to talk "per month" because 95% of your customers can't even see anything beyond their next paycheck, it's fine. I could probably buy a car that is $1200/month (of course with a few significant sacrifices) and easily handle $800 payments, if I really wanted to.
But I won't and I'll never even think of a car as a monthly obligation - all I'm interested is my total obligation. I still take a loan, but for me is my total obligation and financing terms, which brings the payment to whatever it needs to be. Just totally different world, I guess....
All I want from you is (I mean a generic salesperson, not YOU) is to be able to change your tune and not insist on "per month" talk. Can you do that?
The way you operate is the extreme minority, thats why salespeople concentrate on "monthly" because thats what they encounter the majority of the time.
Speaking for myself only. When someone is paying cash, i show them total amounts. When someone is paying per month, i show them monthly terms to keep it less confusing, but also show total figures for each product. Like i've said before, i must be one of the weird guys who isn't out to rob people out of money.
This is where the buyer mindset (at least my mindset) differs from the seller's mindset.
You say that "it only costs me $300-$500 in interest over the 6 years of the unused extended warranty". That, it's not that much money. If it's not your money, then I suppose that's true. But, it's my money we're talking about.
As others have pointed out, the real warranty is only for two or three years (not 6 years)....AFTER the manufacturers warranty runs out. So, the real cost is ~$500-$600/year, after the manufacturers warranty expires. And yes, if you only look at what it adds to the monthly payment, it means the buyer has financed the extended warranty cost, too. So, the original cost of the warranty, is now higher with interest added.
GM does indeed cover their power trains for 100,000 miles. I believe Chrysler's is a LIFETIME power train warranty. I think Honda goes to 60,000 miles on their power trains.
In addition, any component that is related to pollution controls is covered until 80,000 miles on my Honda. I don't remember what it is on my Tahoe, but I know it's at least 50,000 miles, maybe more. The extended warranties don't cover wear items.
Based on all of those facts, if you think about it as strictly a financial decision, extended warranties don't make any sense to me.
Their coverage is too narrow (over and above manufacturers "bumper-to-bumper", power train, no coverage of typical wear items). For too short a period (2-3 years after the manufacturer's warranty expires). And, are too costly....even more so if they're rolled into payments, where you're paying interest on the warranty cost, in addition to the car.
I appreciate what you're trying to say. I'm not saying everyone feels the same way I do. Plenty of people are buying them, otherwise the extended warranty plans would be out of business. I just can't make any good financial case for them.
I don't take it as a personal attack on me, i'm just defending a businesss that i've chosen to make my career out of. Believe me, dealing with the stigma of being the "finance guy" has given me leather skin!!
I just don't understand why people who buy a car every couple years, feel the need to speak poorly about an industry they only deal with every couple of years. Its not like you guys buy cars every day/week or even month and constantly have to deal with the "game," so i dont understand what the big deal is. I deal with this kind of stuff every day so thats why im so passionate about defending it. It doesn't make sense that the act of purchasing a car every couple years can drive people into talking about it on a daily basis on these forums.
Monthly payment is important for me, but only as a conformance that I got a good rate on the loan. If you simply come and say this Impala is $450/month it tells me absolutely nothing. I want to know, what's the price, financed amount, interest rate and length of the loan. Then and only then it makes sense to talk about how much per month it is.
I think it basicall boils down to this: most people in America want more car then they should. It has worked that way for decades now and the industry adjusted. They narrow the focus to a monthly obligation, otherwise it does indeed become overwhelming.
I am not that kind of customer. I deal with numbers every day and I can handle both large and small numbers at the same time and I don't confuse them. I have savings, retirement and I always spend less than I can afford. So, yes - we are different world. You're probably not going to see me at your dealership anyway (because I find 95% of GM and Chrysler products not very appealing), but that's totally different discussion and beyond the point.
Thats fine, and i see how you arrived at your decision. You're one of the people who don't see the cost vs. value weighing in your favor. Like i've said before, for your own benefit, really look into what a "powertrain" warranty covers. Then look at the cost to replace every other component on a car, you'll see extended warrantys DO cover a lot when needed. Thats the big thing though, WHEN NEEDED.
You are basically an insurance salesman. You are selling extended warranites to people who are risk adverse. There are many people like this out there and that's a good thing for you.
There are many others who will roll the dice. There people usually have had good luck with thier cars and they take good care of them.
I would be careful here. Craig has been contributing to this site for long time. You would have to see some zings exchanged with Jipster to understand. Believe it or not, he might actually know everything about your job, as he had been in business for years now.
Actually, I've been doing this for over 13 years now and I work hand in hand with our F& I people. We are high volume store with six people in finance. I know what you guys do.
Nope not touchy, just responding to your random comment. I'm glad you're so knowledgable about F&I, so you can contribute some positive light on OUR line of work.
I think that the F&I person is going to be the best friend to the customer really soon and not the bad guy, because the way these lenders are going to lend money even to prime customers is about to change. I have seen it already here. And I am sure a lot of the posters here who "know" everything about the business will suprised. F&I is going to have to work alot hard at their job as is the salesperson. The party is over in the lending world
Warrantys. The whole "if you're selling me a good car, i shouldn't need a warranty," and other similar responses are ridiculous.
There we strongly disagree. Most things made will either break down very early in its life or very late in its life. few thing break midway along. With cars if something is wrong it will show up within the first 15-20K miles, if nothing happens by then its a 99% chance that nothing will go wrong with it unless you fail to properly maintain it or you get into an accident (in either case the warranty won't fix the issue).
If a car needs an extended warranty I don't need the car. Every car I have ever had made it past 100K miles before any issues came up.
Buying a car isn't as complicated as people make it out to be. There is no "game" involved, you wanna buy a car, we wanna sell you one.
Therein lies the problem. You want to sell and get as much for the car as you can. We want to buy and pay as little as we can. Thats where the game is played.
For every bad dealership, they're 1000 good ones.
Lets see there are at least 5 dealerships around here that have well deserved bad reputations. That would mean that we should have 5,000 good dealerships. I don't think so. I think your off by a factor of at least 20.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I just don't understand why people who buy a car every couple years, feel the need to speak poorly about an industry they only deal with every couple of years. Its not like you guys buy cars every day/week or even month and constantly have to deal with the "game," so i dont understand what the big deal is. I deal with this kind of stuff every day so thats why im so passionate about defending it. It doesn't make sense that the act of purchasing a car every couple years can drive people into talking about it on a daily basis on these forums.
Just ask the same warranty companies if they would insure a vehicle with 120K miles and wait until they stop laughing....
Oh I got one of those letters stating that my factory warranty was about to expire (it expired years ago) and that I should call them (the company that sent the letter) to buy an extended warranty to protect my investment for 'X' additional miles. Just for kicks I called them up and when I told them my car was 8 years old with over 150K miles they just hung up.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Payment buyers, which the majority of people are because they get a loan, see that paying $20 more a month, beats the chance they'll have to pay a few grand out of pocket.
That is totally dependant on what the chances are that they will pay a few grand out of pocket. Lets say that the average out of pocket payment is 3 grand and its a 5% chance that you will have an out of pocket expense that means the average person will pay $150. That means that the $20 a month is a grand more than the out of pocket expense for the average person.
Now lets be serious here, how many people will actually get hit with a repair bill in the thousands of dollars during the time that the extended warranty will be in effect.
Same deal with auto insurance, everyone has it, but rarely does anyone use it. How much have you spent on auto insurance in your life compared to how much you've used it?
Poor comparison for two reasons. First auto insurance is mandatory (at least in this state) and not having it can cost you a $500 dollar ticket and the cars plate getting suspended (which will cause more trouble if caught).
Secondly, and far more importantly, not having an extended warranty exposes me to a very minimum risk, two or three grand at best. not having auto insurance exposes me to hundreds of thousands of dollars, if not millions, of risk. I will never lose my house and have my wages garnished because I don't have an extended warranty. I could without auto insurance.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Are you basing your vehicle failure ratings on any solid evidence, or just your personal experience?
As an engineer, I can tell you with certain degree of authority, it's the way machinery works (for disclosure, I design structures, but the same logic of lifecycle analysis applies). Every machine (or more widely, engineering product) has its certain design lifecycle - both parts and as a whole (gasoline-powered cars it's anywhere from 100 to 200K miles - I would be curious myself what the exact number is). Certain parts last longer than others, but if properly maintained (big if), once a machine makes it through its break-in period (adjustment of moving parts and discovery of hidden defects) it will MOST LIKELY (not guaranteed, but expected) go through its lifecycle without a sweat, as long as it's properly maintained (which in America is generally a problem). It's just designed to do so through selection of material properties, systems, etc.
Things can go wrong of course, but most of the time (big most) they simply don't. If they did, you would have way, way fewer 4-10 year old vehicles on the road and premiums on those extended warranties would have been much higher. And there are examples of such situations - certain vintage of Land Rovers could not be warrantied at any price by some insurers.
But in most cases, any warranty in mid- lifecycle is covering the least likely period to actually make a claim - and the insurers know it. As Snake said, they hang up on him when he mentioned the mileage - and I would do, too .
On the side comment - you repeteadly were using "6-year coverage" claim and also divided your total by those six years to make a point about how inexpensive it was. And I must tell you - as somebody who watches very closely my own statements, this basically does border on "false statement" and "deceptive advertising". Difference between coverage to 6th year and actual six-year coverage beyond what is already provided are easy to understand. I'm NOT saying it was your intent, but it DID come off that way.
Another comment: I think we all extablished your intentions and belief in the product is genuine - your livelyhood invested in it disclaimed. I enjoy honest disagreements, even if heated. I'm not trying to beat you in a sense of some kind of humiliation or intimidation, I'm just giving you MY reasons why I am not convinced your product has a value declared on its pricetag. I fully acknowledge others may see it differently, just as I would not pay $80 for a shirt, whatever name it has on the label. I offer my opinion to those who may not have one at the moment and seek one from others.
Not exactly - more like an non-interest escrow/deposit account with certain forfeiture provision (in case your claim is lower) and a lottery ticket included as a bonus (in case your claim is higher than value).
GRAPHICGUY-Are you REALLY that concerned with the interest you'd earn on $1500 over 6 years....come on now.
Why not? that $1500 would add $29.35 a month to a 5 year auto loan. That $29.35 a month invested conservatively can add up to $1,954.25 after 6 years. Thats no chump change.
I'm not going to name all the parts that would cost over $1500, because there are too many. A/C units, any power option, alternator, any computer or control module on some models after parts and labor would hit that mark and thats for one incident.
Hate to tell you this but most of the time those things will last well over 6 years and 100K miles. Heck I am at 8 years and 153K miles and I still have the original of all that you mentioned with no signs of trouble.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I just don't understand why people who buy a car every couple years, feel the need to speak poorly about an industry they only deal with every couple of years.
I had a chief in the service who used to say "You only have to experience a hangover once to know what its like for everyone else."
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
You just proved everyone's point. If you buy a manufacture backed extended warranty, you don't have to worry about the economy. Even with all of GM's problems, I still have confidence they will be in business 6-7 years from now.
Again, you still seem stuck on this notion that the dealer is looking out for your best interest. The salesman job is to sell you a product at the highest cost possible. They recommend EasyCare because the ealership makes more money selling it than the manufacture based warranty.
I'm glad EasyCare worked for you. I hate seeing people lose money. But with all the warranty companies that have gone out of business holding people's money, I can't recommend anything other than a manufacturer based warranty. Of course my first recommendation is bypass the extended warranty, buy a car that has a good reliability record and self insure.
>I got one of those letters stating that my factory warranty was about to expire
Since they acted like they were factory-related, I called them and asked them for more info using the number that was on my letter. I wouldn't give any info about mself or the car. I said since they knew the factory warranty was about to expire, they must already know based on that number. I just wanted to waste their time.
Stick with car company actual warranty extensions if you feel the need. I haven't.
Are you basing your vehicle failure ratings on any solid evidence, or just your personal experience?
Both.
I've seen literally thousands and thousands of repair orders and stats to go with them.
But the problem is you are only seeing those that have problems, How many people take their cars to the dealerships service department to record their problem free cars? Plus how many of those cars are in the period os time that an extended warranty would cover? Your looking at the cars coming in for service and basing your opinions on that is a very poor use of statistics as you only see the trouble ones and never the trouble free ones.
I'll say this once more; THERE IS NO SET TIME WHEN CARS WILL BREAK DOWN. It can happen at anytime.
And I will say this one more time THE VAST MAJORITY OF ISSUES WILL HAPPEN EITHER DURING THE ORIGINAL MANUFACTURERS WARRANTY OR MUCH LATER DURING THE LIFE OF THE PRODUCT. Any product engineer or designer will tell you that the vast majority of component failure will happen during the initial "break in period" where the components are first being used AND when they have received considerable wear and tear. Statistically the time an extended warranty covers a car is its most reliable time.
Look at it this way, if cars needed extended warranties like you seem to imply then they would be a lot more expensive or the companies would go out of business. The only reason that extended warranties sell for $1,500-$2,000 is because the average car will have far less than that in covered repairs. You have to remember that not only do they have to pay for covered repairs but they have overhead to pay for (like employees, buildings, equipment and the such) and provide some profit.
You make it see like once you get past 20k, whew you're home free!!
No all I am saying is that statistically between say 20K and 100K is the most reliable period of a car. Sure cars will have problems between 20K and 100K but the odds are strongly on the side of reliability.
My comment .......
A little touchy aren't you. Face it you are in a profession that has a large proportion of, shall we say shady individuals? While it is not a high percentage it certainly is far more than 0.1%
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
That is totally dependant on what the chances are that they will pay a few grand out of pocket. Lets say that the average out of pocket payment is 3 grand and its a 5% chance that you will have an out of pocket expense that means the average person will pay $150. That means that the $20 a month is a grand more than the out of pocket expense for the average person.
Damn...now that's math and it's a word problem. I never was any good with word problems. That's way beyond 5th grade stuff. Now who do you expect to grasp all of that? :mad:
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Payment buyers, which the majority of people are because they get a loan, see that paying $20 more a month, beats the chance they'll have to pay a few grand out of pocket.
With all respect fanguy $20 a month is a little light. I would suggest maybe $30...
I have seen warranties all the way up too $4000.00 depending on the vehcile and that is just for 2 or 3 years 36000 miles. It does depned on the vehicle and year.
Average out of pocket expense $3,000.00 Times chances of having an event .05 (5% chance of needing warranty) average outlay per vehicle $150.00
So that for an extended warranty to be cost effective over the wide band of buyers the cost needs to be $150 or less.
Also one must consider how risk adverse you are. The more you want to avoid the risk the higher you should make the cost to determine if it is cost effective for you.
any questions?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
My experiences with extended warranties are a mixed bag. Most of my vehicles have not had them but 2 did.
My father bought one for my first car, a 1983 Nissan 280ZX turbo. Bought in '88 with miles in the low 60's; I have no idea what he paid for the warranty but it covered two turbo replacements on separate occasions at $800-900 each somewhere around 1989-1991. (I wonder what that would cost today?) Verdict: money well spent, IMO.
My second warranty cost $1295 on a 2004 F150. I bought it mainly because my job at the time required a lot of travel and I would blow through 36K miles in less than a year. 32K miles and 9 months later, I came to the realization that it was better to be an indian than a chief and demoted myself. 3.25 years later, I only have 52K on the odo. The warranty expired this month. I used it to replace the 3rd brake light and a window regulator. (about $200 and $275, IIRC) I asked the warranty clerk/cashier what she thought of EW's when I went to settle up on the window regulator. I made some comment about the EW expiring soon and that I hadn't quite "got my money's worth out of my EW." Her response: "if you saw some the repair bills covered by EW's that I see everyday you would be crazy not to have it on every car you buy!" Me: "Hmm, I'll keep that in mind." Verdict: mixed bag -- a loss financially but my situation changed and altered the original plan.
Others: bought a 42" TV from target.com for hundreds less than Best Buy, Sears, Circuit City wanted for the same model. Their EW's were $250-399 IIRC. Decided that since I had saved so much by shopping around, I opted for their much more reasonable $79 three year warranty. All together still cheaper than the other guys wanted for the TV alone. Verdict: TBD, still a year or two remaining on the warranty--tv working fine at the moment.
My Ipod broke the other day. (apparently these things are frail) Bought a new one today for $149. Opted for the 2 year warranty for $19.88. If I had a warranty on the old one, I would not have spent hours searching ipod forums, trying various "fixes" from self-proclaimed experts. Verdict: would have been well worth the piece of mind and a measly 20 bucks if I had it on the old one. new one: TBD.
Can I write a check for an IPOD or a $4000 transmission without my bills going late this month? Yes, but there is another factor that can't be quantified in pure dollars and cents, time value of money, etc. How nausuated would I be if I have to transfer $4k from savings or pay 7.25% CC interest over time to get an aging car back in service with no obvious added value. Very nausuating for me, yet I'm still on the fence with EWs. When I think of it this way, an extra $25 on a car loan doesn't seem so bad when I think of how much mental grief a big repair will cause. YMMV.
I only posted what I did about Easy Care because I've had experience with it and it was something I didn't regret buying. I know the dealers make money on ALL warranties and I honestly don't care because that's just business. I'm not trying to prove anything here.. I just replied to someone's post about Easy Care.. nothing more.. nothing less. I'm not stuck on any notions either.. I know what they are and I know how they work. I came to this forum to get opinions on GM warranties when I was first thinking about buying one. I had no experience with a GM warranty and I wanted to see if others recommended it. I felt that I should in turn do the same.
Just curious, where exactly are you getting the Average out of pocket expense $3,000.00 and the 5% chance of having an event? Honestly i'm not sure where those numbers are from, or what type/length of coverage they're referring to.
Once agian, are these hard, factual, researched numbers, or are you just making a general assumption?
I purchased an Easy Care-Total C :confuse: are/GOLD warranty for my LR on June 1, 2008 - 1 month before the LR warranty expired. I specifically discussed the extended warranty w/ the dealer's rep who sold m this warranty and queried her about the deductable. She assured me that it was $100. per visit - not per item. I just brought my LR in for service and the service guy wants to charge me not only the $100 deductable but now $160. per item (6) needing service!
In reviewing my contract I don't see this itemized. Has anyone any advice to lend on this aspect
Now i don't have any experience with Easy Care, but the deductible should be clearly posted on the contract. The warranty's I deal with are $0/$50/$100 per incident depending on which contract you purchase. Its clearly stated. If a repair requires several different parts, you pay the same deductible if it was one part. If i were you i'd fight that, it doesn't make any sense to charge you $160, if they don't budge, get the problem fixed and cancel the warranty, you should get some money back.
Thanks so much for getting back to me. I finally got through to Easy care who told me indeed it was a $100 deductable ... but .... that the Service guy ( from the same dealer who sold me the contract!) is the one charging me these fees for a "diagnostic fee" per item that needs to be looked at - to my mind, this is something that needed to be disclosed upfront, as it was an obvious concern to me.
Comments
Something tells me that if you were in front of the service advisor and he just told you your car with 49000 miles needed a $2000 repair, you'd probably flip out and expect it paid for by the dealer. Then go tell everyone how bad of a place it is because they wont "stand by" their product. In all my years in the business i've never seen anyone willingly pay something like that with no objection or anything.
Thats not an attack on you whatsoever, it just seems your saying some odd things.
No, it won't. If you are referring to 6-year coverage, it will be exactly double of that ($500/each year it is in force) assuming 3/36 from manufacturer. The car I have currently has 5/60 powertrain, which basically reduces the benefit, or increases the cost per year it actually is in force. For your number be correct, it would have to be 6 years AFTER mfr coverage expiration, i.e. 9 year warranty on 3/36 or 11 year or 5/60. Be careful with math - too many engineers on this website
2018 430i Gran Coupe
What's your guesstimate on the percentage of people who get their money back greenpea? I can see a lot of people pulling their hair out on trying to decide what to do, i.e they're looking at a $750 repair with about 8 months of warranty left... can't decide whether to turn it in or not.
Good to see you posting again by the way.
Lets see - $1500@3.5%/year times 6 years comes to about $300, which would pay for at least one minor incident. I wouldn't call it totally insignificant. Put in something better, like a 5% CD and you are pushing five hundred.
Ahhh, the magic of numbers - can be twisted each way. Salespeople always sell us "per month", I always multiply it by 12 and get per year.
2018 430i Gran Coupe
2018 430i Gran Coupe
But I won't and I'll never even think of a car as a monthly obligation - all I'm interested is my total obligation. I still take a loan, but for me is my total obligation and financing terms, which brings the payment to whatever it needs to be. Just totally different world, I guess....
All I want from you is (I mean a generic salesperson, not YOU) is to be able to change your tune and not insist on "per month" talk. Can you do that?
2018 430i Gran Coupe
Speaking for myself only. When someone is paying cash, i show them total amounts. When someone is paying per month, i show them monthly terms to keep it less confusing, but also show total figures for each product. Like i've said before, i must be one of the weird guys who isn't out to rob people out of money.
You say that "it only costs me $300-$500 in interest over the 6 years of the unused extended warranty". That, it's not that much money. If it's not your money, then I suppose that's true. But, it's my money we're talking about.
As others have pointed out, the real warranty is only for two or three years (not 6 years)....AFTER the manufacturers warranty runs out. So, the real cost is ~$500-$600/year, after the manufacturers warranty expires. And yes, if you only look at what it adds to the monthly payment, it means the buyer has financed the extended warranty cost, too. So, the original cost of the warranty, is now higher with interest added.
GM does indeed cover their power trains for 100,000 miles. I believe Chrysler's is a LIFETIME power train warranty. I think Honda goes to 60,000 miles on their power trains.
In addition, any component that is related to pollution controls is covered until 80,000 miles on my Honda. I don't remember what it is on my Tahoe, but I know it's at least 50,000 miles, maybe more. The extended warranties don't cover wear items.
Based on all of those facts, if you think about it as strictly a financial decision, extended warranties don't make any sense to me.
Their coverage is too narrow (over and above manufacturers "bumper-to-bumper", power train, no coverage of typical wear items). For too short a period (2-3 years after the manufacturer's warranty expires). And, are too costly....even more so if they're rolled into payments, where you're paying interest on the warranty cost, in addition to the car.
I appreciate what you're trying to say. I'm not saying everyone feels the same way I do. Plenty of people are buying them, otherwise the extended warranty plans would be out of business. I just can't make any good financial case for them.
I just don't understand why people who buy a car every couple years, feel the need to speak poorly about an industry they only deal with every couple of years. Its not like you guys buy cars every day/week or even month and constantly have to deal with the "game," so i dont understand what the big deal is. I deal with this kind of stuff every day so thats why im so passionate about defending it. It doesn't make sense that the act of purchasing a car every couple years can drive people into talking about it on a daily basis on these forums.
I think it basicall boils down to this: most people in America want more car then they should. It has worked that way for decades now and the industry adjusted. They narrow the focus to a monthly obligation, otherwise it does indeed become overwhelming.
I am not that kind of customer. I deal with numbers every day and I can handle both large and small numbers at the same time and I don't confuse them. I have savings, retirement and I always spend less than I can afford. So, yes - we are different world. You're probably not going to see me at your dealership anyway (because I find 95% of GM and Chrysler products not very appealing), but that's totally different discussion and beyond the point.
2018 430i Gran Coupe
2018 430i Gran Coupe
You are basically an insurance salesman. You are selling extended warranites to people who are risk adverse. There are many people like this out there and that's a good thing for you.
There are many others who will roll the dice. There people usually have had good luck with thier cars and they take good care of them.
Nobody is right or wrong here.
You are correct though, nobody is right or wrong in this debate. What works for some, doesn't work for others and vice versa.
2018 430i Gran Coupe
Actually, I've been doing this for over 13 years now and I work hand in hand with our F& I people. We are high volume store with six people in finance. I know what you guys do.
There we strongly disagree. Most things made will either break down very early in its life or very late in its life. few thing break midway along. With cars if something is wrong it will show up within the first 15-20K miles, if nothing happens by then its a 99% chance that nothing will go wrong with it unless you fail to properly maintain it or you get into an accident (in either case the warranty won't fix the issue).
If a car needs an extended warranty I don't need the car. Every car I have ever had made it past 100K miles before any issues came up.
Buying a car isn't as complicated as people make it out to be. There is no "game" involved, you wanna buy a car, we wanna sell you one.
Therein lies the problem. You want to sell and get as much for the car as you can. We want to buy and pay as little as we can. Thats where the game is played.
For every bad dealership, they're 1000 good ones.
Lets see there are at least 5 dealerships around here that have well deserved bad reputations. That would mean that we should have 5,000 good dealerships. I don't think so. I think your off by a factor of at least 20.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Keep up the good work Fandiguy :shades:
GP
Oh I got one of those letters stating that my factory warranty was about to expire (it expired years ago) and that I should call them (the company that sent the letter) to buy an extended warranty to protect my investment for 'X' additional miles. Just for kicks I called them up and when I told them my car was 8 years old with over 150K miles they just hung up.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
That is totally dependant on what the chances are that they will pay a few grand out of pocket. Lets say that the average out of pocket payment is 3 grand and its a 5% chance that you will have an out of pocket expense that means the average person will pay $150. That means that the $20 a month is a grand more than the out of pocket expense for the average person.
Now lets be serious here, how many people will actually get hit with a repair bill in the thousands of dollars during the time that the extended warranty will be in effect.
Same deal with auto insurance, everyone has it, but rarely does anyone use it. How much have you spent on auto insurance in your life compared to how much you've used it?
Poor comparison for two reasons. First auto insurance is mandatory (at least in this state) and not having it can cost you a $500 dollar ticket and the cars plate getting suspended (which will cause more trouble if caught).
Secondly, and far more importantly, not having an extended warranty exposes me to a very minimum risk, two or three grand at best. not having auto insurance exposes me to hundreds of thousands of dollars, if not millions, of risk. I will never lose my house and have my wages garnished because I don't have an extended warranty. I could without auto insurance.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
So basically an interest free loan.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
As an engineer, I can tell you with certain degree of authority, it's the way machinery works (for disclosure, I design structures, but the same logic of lifecycle analysis applies). Every machine (or more widely, engineering product) has its certain design lifecycle - both parts and as a whole (gasoline-powered cars it's anywhere from 100 to 200K miles - I would be curious myself what the exact number is). Certain parts last longer than others, but if properly maintained (big if), once a machine makes it through its break-in period (adjustment of moving parts and discovery of hidden defects) it will MOST LIKELY (not guaranteed, but expected) go through its lifecycle without a sweat, as long as it's properly maintained (which in America is generally a problem). It's just designed to do so through selection of material properties, systems, etc.
Things can go wrong of course, but most of the time (big most) they simply don't. If they did, you would have way, way fewer 4-10 year old vehicles on the road and premiums on those extended warranties would have been much higher. And there are examples of such situations - certain vintage of Land Rovers could not be warrantied at any price by some insurers.
But in most cases, any warranty in mid- lifecycle is covering the least likely period to actually make a claim - and the insurers know it. As Snake said, they hang up on him when he mentioned the mileage - and I would do, too
On the side comment - you repeteadly were using "6-year coverage" claim and also divided your total by those six years to make a point about how inexpensive it was. And I must tell you - as somebody who watches very closely my own statements, this basically does border on "false statement" and "deceptive advertising". Difference between coverage to 6th year and actual six-year coverage beyond what is already provided are easy to understand. I'm NOT saying it was your intent, but it DID come off that way.
Another comment: I think we all extablished your intentions and belief in the product is genuine - your livelyhood invested in it disclaimed. I enjoy honest disagreements, even if heated. I'm not trying to beat you in a sense of some kind of humiliation or intimidation, I'm just giving you MY reasons why I am not convinced your product has a value declared on its pricetag. I fully acknowledge others may see it differently, just as I would not pay $80 for a shirt, whatever name it has on the label. I offer my opinion to those who may not have one at the moment and seek one from others.
2018 430i Gran Coupe
2018 430i Gran Coupe
Why not? that $1500 would add $29.35 a month to a 5 year auto loan. That $29.35 a month invested conservatively can add up to $1,954.25 after 6 years. Thats no chump change.
I'm not going to name all the parts that would cost over $1500, because there are too many. A/C units, any power option, alternator, any computer or control module on some models after parts and labor would hit that mark and thats for one incident.
Hate to tell you this but most of the time those things will last well over 6 years and 100K miles. Heck I am at 8 years and 153K miles and I still have the original of all that you mentioned with no signs of trouble.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2018 430i Gran Coupe
I had a chief in the service who used to say "You only have to experience a hangover once to know what its like for everyone else."
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Again, you still seem stuck on this notion that the dealer is looking out for your best interest. The salesman job is to sell you a product at the highest cost possible. They recommend EasyCare because the ealership makes more money selling it than the manufacture based warranty.
I'm glad EasyCare worked for you. I hate seeing people lose money. But with all the warranty companies that have gone out of business holding people's money, I can't recommend anything other than a manufacturer based warranty. Of course my first recommendation is bypass the extended warranty, buy a car that has a good reliability record and self insure.
Since they acted like they were factory-related, I called them and asked them for more info using the number that was on my letter. I wouldn't give any info about mself or the car. I said since they knew the factory warranty was about to expire, they must already know based on that number. I just wanted to waste their time.
Stick with car company actual warranty extensions if you feel the need. I haven't.
2014 Malibu 2LT, 2015 Cruze 2LT,
Both.
I've seen literally thousands and thousands of repair orders and stats to go with them.
But the problem is you are only seeing those that have problems, How many people take their cars to the dealerships service department to record their problem free cars? Plus how many of those cars are in the period os time that an extended warranty would cover? Your looking at the cars coming in for service and basing your opinions on that is a very poor use of statistics as you only see the trouble ones and never the trouble free ones.
I'll say this once more; THERE IS NO SET TIME WHEN CARS WILL BREAK DOWN. It can happen at anytime.
And I will say this one more time THE VAST MAJORITY OF ISSUES WILL HAPPEN EITHER DURING THE ORIGINAL MANUFACTURERS WARRANTY OR MUCH LATER DURING THE LIFE OF THE PRODUCT. Any product engineer or designer will tell you that the vast majority of component failure will happen during the initial "break in period" where the components are first being used AND when they have received considerable wear and tear. Statistically the time an extended warranty covers a car is its most reliable time.
Look at it this way, if cars needed extended warranties like you seem to imply then they would be a lot more expensive or the companies would go out of business. The only reason that extended warranties sell for $1,500-$2,000 is because the average car will have far less than that in covered repairs. You have to remember that not only do they have to pay for covered repairs but they have overhead to pay for (like employees, buildings, equipment and the such) and provide some profit.
You make it see like once you get past 20k, whew you're home free!!
No all I am saying is that statistically between say 20K and 100K is the most reliable period of a car. Sure cars will have problems between 20K and 100K but the odds are strongly on the side of reliability.
My comment .......
A little touchy aren't you. Face it you are in a profession that has a large proportion of, shall we say shady individuals? While it is not a high percentage it certainly is far more than 0.1%
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Damn...now that's math and it's a word problem. I never was any good with word problems. That's way beyond 5th grade stuff. Now who do you expect to grasp all of that? :mad:
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
With all respect fanguy $20 a month is a little light. I would suggest maybe $30...
I have seen warranties all the way up too $4000.00 depending on the vehcile and that is just for 2 or 3 years 36000 miles. It does depned on the vehicle and year.
GP
So basically an interest free loan.
Sorry buddy I have been typing and fast at work and need Rich to edit my posts.
I meant to say that if you don't use it is 100% refundable
GP
The problem with busy threads like this is that people will get something in before you will many times.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Average out of pocket expense $3,000.00
Times chances of having an event .05 (5% chance of needing warranty)
average outlay per vehicle $150.00
So that for an extended warranty to be cost effective over the wide band of buyers the cost needs to be $150 or less.
Also one must consider how risk adverse you are. The more you want to avoid the risk the higher you should make the cost to determine if it is cost effective for you.
any questions?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
$1,500 at 6.5% for 5 years comes to $29.35 a month.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Got it.
Thanks,
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
My father bought one for my first car, a 1983 Nissan 280ZX turbo. Bought in '88 with miles in the low 60's; I have no idea what he paid for the warranty but it covered two turbo replacements on separate occasions at $800-900 each somewhere around 1989-1991. (I wonder what that would cost today?) Verdict: money well spent, IMO.
My second warranty cost $1295 on a 2004 F150. I bought it mainly because my job at the time required a lot of travel and I would blow through 36K miles in less than a year. 32K miles and 9 months later, I came to the realization that it was better to be an indian than a chief and demoted myself. 3.25 years later, I only have 52K on the odo.
The warranty expired this month. I used it to replace the 3rd brake light and a window regulator. (about $200 and $275, IIRC) I asked the warranty clerk/cashier what she thought of EW's when I went to settle up on the window regulator. I made some comment about the EW expiring soon and that I hadn't quite "got my money's worth out of my EW." Her response: "if you saw some the repair bills covered by EW's that I see everyday you would be crazy not to have it on every car you buy!" Me: "Hmm, I'll keep that in mind." Verdict: mixed bag -- a loss financially but my situation changed and altered the original plan.
Others:
bought a 42" TV from target.com for hundreds less than Best Buy, Sears, Circuit City wanted for the same model. Their EW's were $250-399 IIRC. Decided that since I had saved so much by shopping around, I opted for their much more reasonable $79 three year warranty. All together still cheaper than the other guys wanted for the TV alone. Verdict: TBD, still a year or two remaining on the warranty--tv working fine at the moment.
My Ipod broke the other day. (apparently these things are frail) Bought a new one today for $149. Opted for the 2 year warranty for $19.88. If I had a warranty on the old one, I would not have spent hours searching ipod forums, trying various "fixes" from self-proclaimed experts. Verdict: would have been well worth the piece of mind and a measly 20 bucks if I had it on the old one. new one: TBD.
Can I write a check for an IPOD or a $4000 transmission without my bills going late this month? Yes, but there is another factor that can't be quantified in pure dollars and cents, time value of money, etc. How nausuated would I be if I have to transfer $4k from savings or pay 7.25% CC interest over time to get an aging car back in service with no obvious added value. Very nausuating for me, yet I'm still on the fence with EWs. When I think of it this way, an extra $25 on a car loan doesn't seem so bad when I think of how much mental grief a big repair will cause. YMMV.
BTW, did you misspell greanpea on your login on purpose? I've always wondered about that.
Once agian, are these hard, factual, researched numbers, or are you just making a general assumption?
I purchased an Easy Care-Total C :confuse: are/GOLD warranty for my LR on June 1, 2008 - 1 month before the LR warranty expired. I specifically discussed the extended warranty w/ the dealer's rep who sold m this warranty and queried her about the deductable. She assured me that it was $100. per visit - not per item. I just brought my LR in for service and the service guy wants to charge me not only the $100 deductable but now $160. per item (6) needing service!
In reviewing my contract I don't see this itemized. Has anyone any advice to lend on this aspect
Has anyone had experience with such a situation?