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Extended Warranties



  • got 30 percent off! found a web site of a chrysler dealer in iowa that discounts the factory extended warranties, and the dealer i just purchase my pacifica from was willing to match it. got the maximum care package. with all of the electronics on this vehicle, i thought it would prudent to be sure that everything was covered.
  • I know this is getting old. I got taken by Warranty Gold and hate to be taken once again. I listened to the sales pitch from Continental with whom I had tried just before Warranty Gold and then cancelled before enrolling with Warranty Gold because of the price and no deductible.I did get me deposit back with Continental with no problem, so they seem legitimate in that respect.

    I am willing to look at their policy again and perhaps try agin. Does anyone have any negative experiences with them in submitting claims, denial, time delays in paying claims etc... Thanks.
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    Hi demschr. The company you need to concern yourself with is not the marketer, but the re-insurer - they are the ones paying the claims. It was NWIG's collapse that caused the problems with Warranty Gold and Smart Choice. If your vehicle was bought new and still has its factory warranty in effect, I'd seriously recommend getting a manufacturer plan if you feel you need extended coverage. If the car is used or out of warranty, then you need to check on the re-insurer's solvency and assets. If a plan was backed by Allstate, Stare Farm, or some other large well-known insurance firm, that's great. If it's some small RRG (risk retention group) like NWIG that you've never heard of before, you should probably avoid it.

    Smart Shopper and FWI Message Boards
  • Thanks, Kcram. How do I find out the name of the reinsurer. In the old contract I had with them, it lists Marathon Administrative Company and then Royal Administrative Services who Marathon has contracted with to administer the provisions of the contract.

    With this said, then who is the insurance company that backs it? When I was speaking to them on the phone, he mentioned a place in Switzerland who insures IBM and Daimen Chrysler. I better get the name then of the insurabce company then, but where do I get this info if not in the contract book?
  • Does anyone know how much of contract price is reserved for claims? I am guessing it is quite trivial. Take a price of $1500, deduct some money off the top for the vendors credit card processing fee, then subtract out the company’s phone bill, rent, wages for the phone reps., a small piece for the various administrative and insurance entities listed in your contract... then maybe half or more of what is left at that point is declared profit upfront. I’d wager a year’s pay that if we knew how much these service contract companies reserve/budget for actual claims, it would be no shock that these companies routinely go bankrupt as part of their business model. Clearly, based upon all the ways your money gets divvied up if you buy an automotive service contract, you would be better off just putting the money aside for repairs yourself. One rationale behind buying a service contract may be the potential occurrence of a large repair costing a few times the price of the contract. However, if it happens too close to the purchase of the contract, the claim will be denied as a pre-existing condition, but if it happens too much later, the pyramid may have collapsed.
  • KCRamKCRam Mt. Arlington NJPosts: 3,516
    demschr, whomever pays the claims is the responsible firm you need to examine. Based on what you mentioned, that would be Royal. With a manufacturer like DC, yes, they have insurance on their financial holdings, but they administer the policy themselves, and that's the key difference. When my Dodge Ram had an issue, the dealership (acting as a contracted manufacturer representative) determined if the repair fell under the Chrysler service contract. If so, I was charged only my deductible, and they simply filed the claim with DC. If there was disagreement or dispute, a DC rep made the inspection, not a third party inspector as with the private contracts.

    DC and the other car manufacturers operate under the premise "we want this customer to buy another vehicle from us" - the private service contract admin says "we don't want to pay claims so that we can make money." And it's generally those philosophies that determine if a borderline repair will be covered or not - or in extreme cases, whether an entire repair is paid for when a covered part causes damage elsewhere. There have been many tales on these message boards where Small Component A failed and damaged Big Expensive Component B, but the third-party warranty would only pay for A's replacement, not the total repair.

    Smart Shopper and FWI Message Boards
  • driftracerdriftracer Posts: 2,692
    that's favorable to the consumer - the service manager at a manufacturer's dealership is the "adjuster" for the warranty. Third party warranties have private adjusters who thrive on disapproving claims.
  • q45manq45man Posts: 416
    Why it is so important to maintain excellant relations and keep the SM your payroll [so he works hard for you].

    Each dealership has a pool of good will money [from factory] each month depending on sales volume......the early in the month bird gets the dollar worms.

    You want to be down on the list just below his Mother.
  • Continental is backed by a Risk Retention Group. They will not tell you that. If you call them enough, you will here "we are backed by a triple A rated company." There is no such thing. They are backed by a company with no rating. If you here the word reinsurance, stay away. Reinsurance means you are doing business with a RRG. I looked into Continental a good bit and the more I spoke with them and looked into it, the more lies I heard. The coverage is not any good anyway. It is a listed plan.
  • Thanks for the comments- but Chrisgivens mentioned the coverage they have is not good as it is a listed plan. What is a listed plan? The list of things they cover and don't?

    I have since called and found out the administrator, Royal Administration Services, uses Lyndon Property Insurance in St. Louis, Mo.

    Any feedback on this? Or still stay clear of them? I'm beginning to think noone on this board is in favor of any extended warranties unless it is bought form a delaership? Am I understanding this correctly? Thanks for the input, appreciate it.
  • driftracerdriftracer Posts: 2,692
    "beginning to think no one on this board is in favor of any extended warranties unless it is bought form a dealership"

    Not necessary bought from a dealership, because MANY dealerships sell aftermarket junk warranties, or worse, they self-insure under "First Extended".

    I recommend ONLY warranties supported by the vehicle's manufacturer - GMPP for GM, ESP for Ford, etc.
  • Driftracer- thnaks. Where do you go about purchasing these warranties supported by the manufacturer i.e. GM. My car is out of warranty just 6 months. Can you still get one of those if a car is out of warranty?
  • Since your car is out of warranty, I don't believe you can still get a GM-backed warranty. That being said, I'd recommend taking the money you would have spent on an extended warranty, and putting it in a savings account. Then, pay for repairs out of that account. Buying a third-party extended warranty requires you to believe three things:
    1. If the policy costs $X, then you'll have more than $X in covered expenses over the life of the warranty
    2. The warranty provider has to actually authorize the repair (i.e. not weasel out of it - remember, GM is trying to keep you happy with GM b/c of your next car purchase - a 3rd party warranty provider has no such incentive)
    3. If they do authorize, that their financial condition will allow them to make the repair - remember that if #1 holds for all their customers, then they'll go bankrupt, which is what happened to NWIG, which had backed Warranty Gold's policies.

    If either 1, 2, or 3 isn't true, then you've thrown away money on the warranty.
  • mitzijmitzij Posts: 613
    jratcliffe is 100% right.

    You ask about 'listed' plans. Many service contracts list every part covered. They want you to think that most of your car's parts are covered. In reality, these listed plans cover less than the other kind. An exclusionary plan lists parts that are not covered, and states if it's not on the list, it's covered. These plans generally cover more than a listed plan.

    But, like I said, jratcliffe is right. You're better off socking away some money in case of a rainy day instead of buying a service contract.
  • Ask Continental to send you a sample contract. I couldn't get them to send me one. The contract will show who insures it. If you do buy a plan, buy one backed by a true insurance company and not a risk retention group. I would make sure the insurance company has a very good rating, no lower than A. There are good companies out there. You might have to look hard to find them. Some of these people are just gun shy because they got burned by a risk retention group.
  • I have a contract from them (that I cancelled during the review period and then went with Warranty Gold), but the insurance company is not mentioned. I called the administrator (royal) and they told me it was Lyndon Property Insurance from St. Louis.

    I am just surprised that I did not see that in the contract.
  • Continental is backed by a RRG. I don't know of too many companies that aren't backed by RRGs. Read the posts about RRGs.
  • I just purchased a 2004 Quest and the Gold Preferred warranty, 72 months / 75000 miles, $50 deductible for $995.

    Can anyone tell me if this is a resonable price and if they have any experiences (good or bad) with Nissan Seurity Plus? Thanks.
  • driftracerdriftracer Posts: 2,692
    so you should have no hassles or trouble, but isn't it a little late to ask if the price was right?
  • Yes it is Nissan's plan. Not really too late to ask about price. I can cancel it at no cost at this point. I'd also like some leverage to renegotiate the deal with them if I can do better.
  • driftracerdriftracer Posts: 2,692
    to do.
  • given that dealers would never try to take advantage of a consumer...
  • driftracerdriftracer Posts: 2,692
    selling something strongly, and courting the "payment buyer", then there's fraud.

    I don't condone fraud or shell games, and that's what the "warranty shuffle" described above seems to be.
  • While it certainly makes sense to research the price of an extended warranty prior to purchasing one, consumers often do have the right to cancel most extended warranties without any penalty early on. As a result, if they want to shop around after the fact, they are completely free to do so. As a general rule dealership employees are trying to make as much money for their employers as possible and consumers are trying to save as much money for their families as possible. I personally don't see anything wrong with making sure that one got a good deal on their warranty. These message boards exist for consumers to talk about the industry and to help others get the best deal possible, not for dealership employees to make them feel guilty about trying to get a good deal.

    Smart Shoppers / FWI Message Boards
  • driftracerdriftracer Posts: 2,692
    price on a warranty. You tell the guy you're interested, then tell him to pull out his rate/cost book and show you his cost, like many do with invoice price on a car. Then, you offer $50 or $100, or whatever amount you think is fair, over their cost. I guarantee you'll be happier with that number that whatever the F&I person pulls out of the air, and you can make your decision right then and feel good about it.

    The after-the-fact deal, in my opinion, is wrong because it affects someone's pay - you wouldn't want anyone having the ability to change your paycheck, would you?

    I do the dealership thing part-time - I'm a consumer the rest of the time, so it's easy for me to see both sides of the coin - no guilt trips intended.
  • bg1bg1 Posts: 1
    Has anyone heard of this company? They come to me recommended by someone my wife works with. His family owns a leasing company in California, but the company is based in Tennassee. Any comments would be appreciated.
  • Hi bg1. I am not personally familiar with the company that you mentioned in your post. However, whenever consumers ask me what sort of extended warranty they should purchase for their car or truck, I always recommend that they purchase an official policy that is sold by their vehicle's manufacturer. Automakers are much more likely to stand behind their products and cover any repairs that you need without any hassle than some random third party is. Remember, it is in manufacturers' best interest to keep you as a happy and loyal customer. Furthermore, it is not very likely that the manufacturer of your vehicle is going to go bankrupt. I can't say the same for some of the third party warranty providers. I have heard countless of horror stories about third party warranties from consumers who visit these forums. What model are you interested in purchasing a policy for? Perhaps I can help you to find out more information about whether its maker has an official extended warranty and if so what levels of coverage it offers.

    Smart Shoppers / FWI Message Boards
  • q45manq45man Posts: 416
    Remember most non manufacturers extended service insurance companies pay $50-$100 for each buying referral.
    So friends of friends may not have your best interests at heart.
  • I have bought my second CNA extended warranty now. 2003Sierra HD Crew loaded 7/100 no deduct for $1600.

    The CNA autowarranties are owed by greater CNA.
  • ateixeiraateixeira Posts: 72,587
    To address the original question, I think $995 is reasonable, yes. The Quest is a new model, it's feature loaded, and hourly labor rates at my dealer have hit $92 per. It doesn't take long to break even nowadays.

    I bet you also get roadside assistance? If so, AAA used to cost us $71 per year, over those 6 years that adds up to $426 all by itself.

    Enjoy the roadside assistance and the piece of mind, I think you did just fine.

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