By accessing this website, you acknowledge that Edmunds and its third party business partners may use cookies, pixels, and similar technologies to collect information about you and your interactions with the website as described in our
Privacy Statement, and you agree that your use of the website is subject to our
Visitor Agreement.
Comments
I'm trying to sell my MY00 Outback Sport right now which is on the Gold Plus plan, and this has me thinking about whether to cancel the plan now and receive less than 50% back, or to quietly let the warranty "mature" and get a full refund... need to do some more research on this as well.
-Frank P.
I've ordered parts from them before, and their return address shows as Exeter Subaru in NH.
I imagine if you move the seat all the way down and all the way back, then the extension probably lines up reasonably well. But the real question is, why is this gizmo necessary anyway? Why doesn't Subaru skip the tacky add-on item and just put a real armrest, with real padding (sorry, John), in the customary center-armrest height and location? Or, better still, send us the really slick individual fold-down armrests that are built (standard!) into the inner front seat bolsters on Foresters everywhere but in North America?
If they have serious plans to move up-market, hokey workarounds like the armrest extension have to go.
http://subaru.com/owners/care/security/middle.jsp
I still can't believe the warranty refund. The SOA site didn't specifically address the issue.
When Juice and I were arguing for extended warranties months ago, none of this came out. It makes no sense to NOT purchase the extended warranty if a full refund is possible.
Waiting for the facts (going to read my fine print on the Subaru Gold tonite),
John
The former in effect help to pay for the latter, and I have a hard time thinking that anyone would be nutty enough to give a refund to the folks who are most responsible for the profitability of the concept. I would doubt that those who -do- use it, but use it in an amount less than its cost, are in a sufficient enough number to pay for those who use it in excess of its cost.
It's called the time value of money.
In order for the "refund" concept to work, you would have to show that the refund would allow you to sell -a lot- (and I mean a lot) more warranties as a result of offering the refund than you would sell without offering it. If you sold a huge amount more, I guess its theoretically possible that the interest might at some point approach what you would make by simply not offering the refund to begin with and accepting the lower volume.
But since they don't appear to even market the warranty with this feature, it doesn't appear that that's part of the plan.
The one feature of this that could make it work, and you'd need more data for this, would be if the "never been used" condition actually discouraged people from using the warrnaty who might otherwise have done so. But my guess is that most of the costs associated with the the warranty are the expensive repairs that would make people use it anyway.
A complicated subject for something I'm not even sure exists.
Very slick strategy, I'd call it.
http://www.freep.com/money/autoreviews/phelan2_20031002.htm
DaveM
Not much of a review. More of a description. Pretty neutral and it seems like the guy didn't even drive it. He focuses on minutia. Loads of the "here's the new XT" articles out. Guess we'll have to wait for Road & Track and Motortrend to do more real reviews.
Think of it this way, if I put my $870 for 6yr/80k in investment, I get interest of about $200 to $500 depending ROT, PLUS I take all the risk of losing the $870 to out of warranty payment. If Subaru is going to refund $870, they have taken all the risk but only get the ROT. What we are saying is that the ROT cancels out all the other costs of warranty usage? makes no sense to me, even a minimal warranty claim with someone else is going to eat up all their profit.
Since I don't see proof yet that the refund is possible, I will not be counting on it in 5 1/2 years.
John
1) The only person legally authorized to make a valid claim is the original named Customer.
2) No claims have been paid during the described time period between the Effective Date and Expiration Date of this Vehicle Service Contract.
3) The Vehicle Service Contract Administrator, described on reverse side, must provide written confirmation that no claims have been paid during the term of the Vehicle Service Contract.
4) At the time the request for reimbursement is made the Customer must be the CURRENT registered owner of the Vehicle. A copy of the current registration, a copy of the sales contract, a copy of the current proof of insurance, and a copy of the original Vehicle Service Contract issued to the Customer must be submitted with the claim for reimbursement.
5) The claim for reimburesment, together with all the required documents in #4 must be submitted within sixty (60) days after the Expiration Date stated on the reverse side. Any claim after sixty (60) days will not be honored.
6) Upon receipt of this information the Issuing Dealer, or their Administrator, will have forty-five (45) days to verify the information and make payment. The Customer hereby authorizes the Issuing Dealer, or their Administrator, to contact any party necessary to verify the information the Customer is required to submit.
No Reimbursement Guarantee claim may be filed before the expiration date on the reverse side.
I hope this can answer some questions about how this dealer-sponsored plan works.
Len
"Reasons to buy: All-wheel drive, practical,
attractive styling"
^^^^^^^^^^^^^^^^^^
First review I've seen
And even if Jack could devise a scenario where it would be financially feasible, the question would remain: why should Subaru bother? Manufacturers already make good money on extended warranties so where's the incentive? For sure this would cut deeply into their profits and the argument that it would be offset by bringing in additional business doesn't hold water because if that were the case, they would be marketing it heavily, which clearly isn't happening.
-Frank P.
Having now taken this way OT, I apologize to all and withdraw from the field knowing I probably won't convince you.
Shortcomings: Power, wind and road noise, handling.
I can get behind the wind and road noise - but handling?
And power is just out of left field.
What kind of Nitrous powered kid killer is Phelan used to!?
still no XT - still no Highlander, either ;-)
srp
While it is true that an extended warranty issuer recently went under, it's generally accepted that this is an extremely profitable (read: high margin) segment of the business. Without disagreeing that risks of claims figure in, that (plus the refund feature) is built into the initial pricing.
Moreover, the detail Len furnished is illuminating: What proportion of new-car buyers will still own the vehicle when the extended contract expires? Maybe a third. Of that group, what proportion will have made zero claims during the contract's life? The compound probability is that only a very small fraction of warranty buyers will actually obtain the promised refund - and, as previously stated, even then the issuer will profit from the intervening ROI.
One of the biggest hurdles to making a sale of an extended warranty is the buyer's concern at having to fork over a large sum in advance with no idea - let alone assurance - as to whether or not it'll pan out. How better to disarm this concern than to promise a "full" (but unadjusted for inflation or investment return) refund 7 or 8 years later (in dollars that are worth quite a bit less), knowing that only a tiny % of buyers will actually qualify even for that?
Far from being insane, I think it's primarily a gimmick having little real value to the average buyer (therefore little real cost to the issuer).
The Zippo lighter company got enormous PR value out of their unconditional lifetime guarantee. The lighters were well-made and durable; it's likely that 99.999% of them were lost long before their purchasers ever sent them in for free repairs. Ergo, the guarantee actually cost Zippo almost nothing, but had incalculable value as a marketing and promotion tool.
I'd put the full-refund on extended warranties (but only to the original buyer, and only if zero claims were made, and paid in years-later inflation-eroded dollars) in the same general category.
Further, there is no good reason why 100% of new car purchasers should not get the extended warranty, they have nothing to lose but a few hundred dollars of interest and get in return, a tremendous risk policy.
I wish the $25k of house/auto insurance I have bought in the last 10 years was like this. All I have gotten from that are 10 expensive birthday cards. A much better business IMO than extended warranty for autos.
John
I may have to recant my earlier statement re white on my next Forester. The XT looked really cruddy, with scratches from shipping and removal of the white plastic protective sheeting. It also had a couple of healthy bird doots (Dave Barry term) on it.
I just can't warm to any of the current XT colors, or any of the Forester colors except Woodland Green. Please, SoA, replace Java Black with a black that's less brown, make Woodland Green available in monotone for XS and XT, and give us World Rally Blue and Slate monotone for the XT as well!
Ed
I only start to worry when coloring from the Red Shift begins to clash with my interior decor. :-)
tidester, host
True, as long as one has enough common sense to not have their extended warranty thrown in with their new car financing at the time of purchase, or you'll end up actually paying interest on it! Made that mistake 3 years ago when I bought my Outback Sport...
I'm also one of those people who will most likely not qualify for a full refund of the warranty because I don't seem to hang on to my cars long enough to still own them at the end of the warranty period. That's mainly why I decided to pass up the Gold Plus Plan this time around when I bought the XT.
Ed: I hear ya on the colors; I chose silver because I decided it was the only color I could live with after trying really hard to warm up to the cayenne red (for a while it looked like I had to settle for a second choice). I just couldn't bring myself to like it. The sedona red pearl color on the pre-2004 Imprezas was a much nicer shade of red, IMHO. White looks too plain, the gold for some reason has an awful greenish tint to it, and black just requires too much maintenance to keep it looking halfway clean (I'm not into religiously washing my car every week).
John
Better revise that to "100% of new car buyers who are virtually certain they will still own the car at the extended warranty's distant expiration date"...all others are in an entirely different position.
Moreover, the buyers of the contracts will frequently face hard decisions down the line: Should I obtain extended-warranty reimbursement for this particular $100 ($200, $300) repair, thus foreclosing any possibility of a full refund - and maybe have this be the only reimbursed repair I experience (thus kissing goodbye the refund) - or should I "eat" this repair bill (and maybe several more to follow) hoping nothing catastrophic goes wrong so that I can claim the refund?
My extended warranty has a $500 deductible, so I would only use it for major power train or AC stuff and not bother with the minor problems.
I still need confirmation that warranty refund is a possibility.
Juice, why are you so quiet on this discussion?
John
Aren't some of these contracts assignable to a buyer of your car? That might make them attractive even for those who turn their cars over sooner. However, the refund feature is available only to the original owner.
Steve, Host
Anyone notice the same thing?
Thanks
hee hee
I'm not concerned about a refund, because A) that's not fair to Subaru and 2) we tend to keep our cars for an average of 7 years. Coincidentally, we have a 7/100 warranty.
OK, so far, already, our dealer gave us a Windstar loaner once, and a Benz 4Matic the next time. No complaints here.
We have roadside assistance for an additional 4 years, which we *will* use. My wife has already had one flat. We tend to use this service about once a year or two.
Dealers prolly do make a profit on the sale. I mean, c'mon, retail is $1300 or higher, one guy paid $700 for a 7/70 warranty. There are serious margins for the dealer to enjoy.
But Subaru? I dunno, Patti said Subaru loses money, but it establishes good will and helps keep repeat customers, so they offer it even at a small loss (to SoA, not the dealer, remember).
I believe her. Thing is, shop around for repairs, $900 for wheel bearings, $400 for an axle boot, $220 just for an 02 sensor (parts only). Labor is $92 per hour. It does not take long to break even.
If we lose money, I can live with that. I can live with a brand new Mercedes loaner, I can live with a free patch of that flat tire, I can live with better resale value in 6.5 years.
It's up to you, YMMV, but no regrets here.
-juice
One of my brothers was an offensive lineman for the University of Michigan.....he has a constantly rotating Craftsman socket set!
mark
They may not be the best, but every tool I have from them is still fine, i.e. nothing has ever broken. My torque wrench rocks.
-juice
One other thing: I recently bought a Craftsman scrolling jigsaw. It is made by Skil and is identical (except for color and name) to their own scrolling jigsaw. The Skil was $69 in Home Depot. The Craftsman is regularly $59.99. It was on sale and had a Craftsman Club discount. I wound up paying $53 for it.
Len
I guess they sell 3rd party stuff.
-juice
Hyundai's 10-year warranty is another good example, too. How many Hyundai owners will still be driving their vehicles 10 years from now? Probably no more than any other make despite the longer warranty. Total insurance claims per vehicle may be slightly higher for Hyundai, but the cost is probably offset by the increased sales from reducing a major purchase barrier -- reliability worries.
Ken
Here's a link (reg. req'd I think) about a woman who got a $1200 aftermarket warranty from Signet Financial that offered a full refund if it went unused. The fine print said you had 30 days to apply for the refund, and naturally (otherwise it wouldn't be newsworthy) she missed the deadline - by 40 days. Read the fine print I guess.
Steve, Host
Back to the extendeds: The tight 30-day window for claiming the extended warranty refund is yet another reason why only a very tiny % of buyers will actually get refunds. How many of us have bought electronics with free-after-rebate deals, and then not sent the stuff off in time <sigh>. And that's for a recent transaction that's comparatively fresh in (what passes for my) memory!
Question is can I use my outback 2256016 tires on my newly ordered Cayenne Red 5mt XT which has 2156016 on it? Subaru cannot seem to give me an answer. I do not want to cause a problem with the new vehicle or void my warranty by using the wrong size tires.
Also I am surprised that there is no chatter on chipping this vehicle. When I was following the Audi A4 discussions that was the main topic. Not that I plan on chipping this vehicle. I lease my vehicles so subaru would not be to happy about knowing I chipped the vehicle. Actually from what I am hearing here on the tread is that the vehicle is fast enough for most humans. Was not able to test drive a 5sp XT before signing on the dotted line. I guess it will be a surprise when the vehicle finally arrives.
Don
Thanks for the reminder!! I got a new modem last week with a rebate offer and need to send it in.
tidester, host
As for chipping (and other power-increasing mods), the XT already has more than enough performance for me. Based on pre-arrival published predictions (such as SOC's) and educated guesswork, I was expecting a 6-sec 0-60 vehicle - not 5.3. On the other hand, I was expecting less thirsty fuel consumption. I would consider an ECU (or other) mod only if it improved the XT's gas mileage.