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Such guy should not buy a new vehicle at the first place. I myself bought a couple of extended warranties, but I learn over and over that they are not paying for themselves when considering the total. A particular one may, but if you take an approach of buying extended warranty on most major purchases, it appears you'll lose - it becomes similar to a playing against the house in a casino.
The appeal of extended warranty contracts lies in fact that it is an accounted and encumbered expense, as opposed to a repair that has to be paid on the spot when it happens. $20/month seems to be "unnoticed" in the budget, it gets easily offset by small adjustment in consumption. But when a $500 or $1000 repair bill hits and the $20/month was already "eaten", it hurts.
So, from purely financial point of view it would be better to put those 20 bucks away every month rather than pay them to the insurance company. But how many people are able (or more exactly - willing ) to do that?
2018 430i Gran Coupe
anyways, he always buys the extended service contracts at best buy. why? because he is very likely to break whatever it is he bought before its up, and can go back and get his next upgraded gadget at a reduced rate (because they replace the broken one). He's gotten 3-4 palm pilots over the course of a few years for maybe $350 out of pocket...instead of $600-$800 or more to pay for each one...
not that these contracts work for everyone (like joel said) but for some people, they make a lot of sense.
the bank's two cents...
-thene :P
Dino, if all Americans lived within there means then the economy would really be in the crapper.
Agree with you completely. OTOH, I am also not willing to pay $5k more for a particular brand used car because I am slightly less likely to replace a transmission 4-5 years out either. Keep the $5k in my pocket and see if a major repair ever materializes. In most cases, it does not.
Right now, I think that the *ONLY* item on the market that I would buy a ESC on is a big screen TV.
Generally, it comes down to one thing in general in this society. There some people who have better control of their finances who don't go broke when their water heater breaks or their transmission fails, because they have an emergency fund. And there are people who live on the edge where any major repair will cause a lot of stress and pain.
(And do realize that income does not have all that much to do with it.)
tidester, host
SUVs and Smart Shopper
I agree with him and I’m sure when he hears about this he’ll be elated.
I don’t buy extended service contracts and over the course of the years the money I’ve saved by not buying them would more that pay for several engine/transmission repairs not to mention replacing a refrigerator compressor if that was necessary but fortunately it wasn't.
Just to prove a point about this, when we bought our first house, since it was new, we needed all of the appliances and I mean ALL of them but I decided not to buy the extended contracts which was against what Mrs. jmonroe would have done. When we left the appliance store I asked her if we could really afford them now that we were new home owners. She said, “sure and I hope you’re right about this because you heard what the salesman said it would cost to repair those appliances once they’re out of warranty”. I then said open a savings account and put the money we would have spent on those contracts into that account. Every time since then we have been doing the same thing with every purchase that offered extended service contracts and as the account grew we bought the equivalent of CD’s (they didn’t call them CD’s in 1969) that provided much better than standard passbook interest.
There is a tidy some in that account now and I proved my point long ago. A while back when an extended contract for a telephone costs $6.92 she refused to go to the bank to make that deposit (yes, I have lost control) saying, “OK, that’s enough already, the woman at the bank knows me by now and when she sees me making a deposit into that account she says “bought another appliance, huh ?”
I have to admit to cheating a little bit since when the washing machine needed a gasket and the dryer needed a new belt etc. (and I did the work), I didn’t withdraw money from the account to pay for those parts. In a way I can justify this since almost all repairs were beyond the extended warranty period.
Being in the same company as Warren Buffet ain’t too shabby.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Another problem with warranties is the stupid mark up that dealers are trying to get for them. For example: I was helping a friend to purchase a base Sienna. The F&I person was trying to squeeze $1500 for a 5 year/60K contract. That is stupid. Now if she asked something like $600 for it, than there would have been something to talk about.
And as a finale to this topic - so the extended warranty supporters will have no leg to stand on - please post how much money is in the account :shades: :shades:
...
"What used to be common courtesy doesn't wear well with a "Me, Me, Me" personality."
= = =
Sadly, I think you are correct.
In My Humble Opinion, one of the primary [ really, really bad ] things we parents have allowed is for a generation to come of age with this attitude.
To elaborate just a bit ( and I do think this is relevant here, as it colors all sorts of negotiations and expectation in car buying, as well as so many other situations ) – in one sentence:
If there is not an immediate & obvious benefit TO ME, I can’t be bothered.
One example I see every day in my commute home.
( If there is actual, conscious thought involved. )
“If I think it will help me merge ( butt ) into a long & continuous stream of traffic, I will use my turn signal. Otherwise, where it might only benefit someone else trying to judge when to turn or merge ( for example ) – not interested. And: Wouldn’t even occur to me.”
Sad.
- Ray
Child of the ( very late ) 1940s – as well as the 50s & 60s
Dealer: Largest Corvette dealer in the SouthEast – near Atlanta & 35 – 40 minutes from my house.
Initial contact was via email, to a specific salesperson that used to be active on a large Corvette Internet Forum – included questions about test driving & any \ all dealership “fees”. I explained that I would be buying. Question was when & where. ( I knew what discounts Kerbeck & Boardwalk & Les Stanford were offering – and I kept up with their current offers weekly, throughout the process. )
Second contact – to set a date & time for test drives – via email.
Arrived at dealer & test drove 2 – each a 2006 Coupe, with the different suspension options I was deciding between = Base & Z51.
Discounted price = too high at that time.
Me: “Thanks – keep me posted via email, and I will be in touch when you can discount a 2007 by substantially more & you meet the price I’ll pay.”
Salesperson: “OK.”
Very cordial & efficient. The test drives were accomplished early on a Saturday morning, before any other potential buyers arrived at the dealership.
This was in July 2006, before the first 2007s had arrived at dealers. . .
Various intervening email updates on availability and evolving discounts.
Email in late September had the discount I had targeted. For an “in-stock” unit.
I responded via email asking what the discount would be on an ordered 2007 at this time, as none in stock or inbound met my specifications.
Although initially, the answer was $500 less discount – when I was non-committal, the “ordered car” discount was made the same as the “in stock” offer.
I drove to the dealership and placed the order, leaving a deposit.
It was built & delivered in less than 6 weeks.
Since I needed to test drive the cars ( I had never driven a current model Corvette, and needed to test the new 6 speed automatic’s paddle shift as well as various individual aspects of how I fit in a much lower car than the last several sedans I’ve driven, etc. – as well as compare the suspensions ) I needed to visit the dealer for that stage.
Since I wanted a highly specific set of options – and specifically did not want the Z51 performance suspension that they order on 95+% of their units for stock – and I wanted a color combination they’d never ordered, I needed to order one, and leave a deposit. ( The dealership never did cash the deposit check. ) They would not want one equipped like mine for their inventory.
- Ray
When I am looking, I am looking & when I am buying . . .
Car: Corvette C6 A6 2007
Dealer: Largest Corvette dealer in the SouthEast – near Atlanta & 35 – 40 minutes from my house.
Initial contact was via email, to a specific salesperson that used to be active on a large Corvette Internet Forum – included questions about test driving & any \ all dealership “fees”. I explained that I would be buying. Question was when & where. ( I knew what discounts Kerbeck & Boardwalk & Les Stanford were offering – and I kept up with their current offers weekly, throughout the process. )
Second contact – to set a date & time for test drives – via email.
Arrived at dealer & test drove 2 – each a 2006 Coupe, with the different suspension options I was deciding between = Base & Z51.
Discounted price = too high at that time.
Me: “Thanks – keep me posted via email, and I will be in touch when you can discount a 2007 by substantially more & you meet the price I’ll pay.”
Salesperson: “OK.”
Very cordial & efficient. The test drives were accomplished early on a Saturday morning, before any other potential buyers arrived at the dealership.
This was in July 2006, before the first 2007s had arrived at dealers. . .
Various intervening email updates on availability and evolving discounts.
Email in late September had the discount I had targeted. For an “in-stock” unit.
I responded via email asking what the discount would be on an ordered 2007 at this time, as none in stock or inbound met my specifications.
Although initially, the answer was $500 less discount – when I was non-committal, the “ordered car” discount was made the same as the “in stock” offer.
I drove to the dealership and placed the order, leaving a deposit.
It was built & delivered in less than 6 weeks.
Since I needed to test drive the cars ( I had never driven a current model Corvette, and needed to test the new 6 speed automatic’s paddle shift as well as various individual aspects of how I fit in a much lower car than the last several sedans I’ve driven, etc. – as well as compare the suspensions ) I needed to visit the dealer for that stage.
Since I wanted a highly specific set of options – and specifically did not want the Z51 performance suspension that they order on 95+% of their units for stock – and I wanted a color combination they’d never ordered, I needed to order one, and leave a deposit. ( The dealership never did cash the deposit check. ) They would not want one equipped like mine for their inventory.
- Ray
When I am looking, I am looking & when I am buying .
What does C6 A6 mean?
Actually, you are right, if you are trying to get good value and bang for your buck, you SHOULD drop your health insurance and any other insurances for that matter.
Insurance companies and workers rank one or two notches below drug dealers on the totem pole for honesty, integrity, and fair value. :mad:
funniest part is a salesperson said it too!
good sense of humor green
Now that would be rubbing it in. Let’s just say that there is enough there to buy a very nice used car maybe even an inexpensive new car. When I think about this I come to the conclusion that we buy way too much stuff.
What really worried me a while back was when Mrs. jmonroe said, “do you know what I could do with this money at the mall?” :sick: I told her that I could buy some very nice tools to make home repairs with that money but I haven’t.
Some day we’ll have to come to a meeting of the minds as to how to spend it.
That time value thing about money does work.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Except that most of those consumer products don't cost anywhere near what the typical car costs. 25% of a $1,000 computer is a lot less than 5% of a $25,000 car ($250 vs $1,250). Not to mention that many of those warranties offer things that a cars extended warranty doesn't offer such as cleaning and adjustments.
I think that auto warranties are typically a very good deal in light of what you are receiving. Some people just prefer to come out of pocket for them.
To be honest in all the cars that I have owned I have never had something go wrong that an extended warranty would have taken care of. Personally unless you are buying a trouble prone car extended warranties are a waste of good hard earned money.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
What does C6 A6 mean?"
C6 = 6th generation Corvette.
2007 = third year of production.
A6 = six speed automatic trans. = designated 6L80.
- Ray
Very Happy Corvette Driver......
Seriously - do you have an issue with the strategy \ process?
I was ( eventually ) happy with the discounted price.
The salesperson ( who sells hundreds of Corvettes every year ) was clearly also satisfied - or would not have made the deal.
Both sides OK with the deal.
Minimum of time invested on both sides.
- Ray
Seriously confused.....
I think he thought you made this a long, drawn out ardous process.
It didn't sound like a "minimum of time invested" to me either.
But, then I know I couldn't sell Corvettes. I don't have the patience.
Nope it wouldn't. people will still have to do something with their money, spend it or save/invest it but they still need to do something with it. The economy would be somewhat different but it wouldn't go into the crapper. If anything there might even be a slight improvement if the debt load lightens a bit.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Sorry snake. You are way off on this.
If Americans smartened up and wiped out their personal debt, America can only support about 60% of the jobs it currently supports.
Gluttonous consumption beyond our means (like we do now) - leads to more production - which leads to more jobs which we currently enjoy.
Is all of that accurate? I have no idea... It is only to point out that most economists think that increasing savings and decreasing consumption would be better for the economy.
Which is in direct contradiction to the "more consumption, more jobs" theory.
regards,
kyfdx
not the host here
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Sorry but I am not. If we wiped out our personal debt we would have the same amount of money to spend or invest. The only difference is that we would be spending or investing more and spending less in interest payments.
Gluttonous consumption beyond our means (like we do now) - leads to more production - which leads to more jobs which we currently enjoy.
Yet in creates more debt and reduces the amount of money available to spend on other goods or to invest in economic growth. You see its a two way street getting rid of debt means no more interest payments which frees up more funds to buy more stuff which leads to more jobs.
My point is that unless people take their money out into their back yards and burn it the economy will not suffer. It will of course change but it will not suffer. The money will be spent/invested one way or the other.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
They question is do you really create more consumption in the long run? Sure I can buy that $2,000 big screen TV now on credit. But that means I will be spending and additional $500+ over the next several years in interest. Thats $500+ I will not be spending someplace else, not to mention the $2K I spent on the TV.
In other words I can spend $2,000 now on credit or spend $2,500-2,600 over the next 3 years. So for $2,000 more in consumption now we sacrifice $850 in consumption a year over the next three years.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Wow, when I bought my Fusion, if they had offered me that deal for $1100, I would have jumped on it. They offered me just the extended warranty to 75000 miles, for $1000. Did you get a discount? Maybe that's why it was worth it for you.
did you at least give them the top score available on the corporate survey???
now i'm not in any way shape or form an economics expert (far from it) but if we took the money we all owed in personal "debt", i don't think we'd have the same amount of money to spend or invest. the reason why we were in debt in the first place is because we didn't HAVE that money...
i could be way off...but that statement just didn't quite make sense to me...
anywho...
-thene
While I've flirted with buying one in the past, I've never pulled the trigger on one.
From what I can gather, the 'vette buyer isn't looking at anything else but a 'vette. So, you've got a captive audience. They are usually afficianados of the model/brand. And, they usually are ecstatic with their purchase. There are sales people that have made an entire career out of selling nothing but 'vettes. That means they can and do make a good living by doing so.
What's not to like?
I don't know but I think he might of paided $1100 for just a 5yr 60K maintanence contract, since he stated " the maintanence plan covers all..." not sure how that differs from the "Premium Care Contract" he talks about (maybe that is the extended warranty?) or the Service Contract he also talks about, maybe they are all the same thing
Now let's say you decided to spend only $25000 and invest the remaining money. Right off the bat 5 people lose their jobs.
Now where is the money invested? Economic growth? How can economy grow unless someone else is willing to purchase the $25000 worth of merchandise you aren't buying any more?
Now extend this example to include the entire population.
If the entire population decided to cut back consumption by even 10% and invest the saved money, very soon there will be no place to invest and we'll be in depression.
Remember - this is exactly what happened after 9-11. People were afraid of the future and decided not to spend money. Pres.Bush's message during that time?
Go out and spend money shopping.
The ones that are really serious will want to test drive multiple cars. These test drives can be scary when they want to test them to their limits.
For every serious buyer you will have a bunch that are not.
I just don't have the time and patience for this.
Where do you think he invests that money? Even if these are paintings, it would still give jobs (to the merchants and painters of course).
It's true that going extreme, like say Ebenezer Scrooge may hurt economy, but a right balance between savings, investments and consumption benefits everybody - American economy lost that balance long time ago. It will come back and haunt us back - perhaps not tomorrow yet, but it will.
2018 430i Gran Coupe
If a few people are fiscally irresponsible, its not such a big deal, but when the whole economy is a house of cards, thats more of an issue.
It didn't sound like a "minimum of time invested" to me either.”
isellhondas –
The process was certainly spread out over several calendar months.
The actual wall clock time ‘invested’ by the salesperson ( and by me ) was quite minimal, in my view:
I certainly spent a lot of time on research.
The only portion of that research that involved the salesperson was the test drives.
The email interactions were actually brief. Q&As, initially.
The salesperson spent about 1 hour with me during “test drive morning”.
The salesperson already sends out emails once a week, or so, typically detailing their current Corvette discounts for Coupes & Convertible and the 3 primary option package \ equipment levels. ( See Kerbeck’s on-line ads, for example – very similar in scope & content. )
No significant additional time required to add me to that mailing list, early on.
The order paperwork took about 45 minutes.
Actual delivery was probably another 30 – 45 minutes.
So – initial contact to delivery was approx. 5 months.
But I’d estimate the salesperson’s time involved at maybe 3 hours, total.
No more.
And there was no protracted negotiation ( grinding? ) involved.
I never stated ‘my price’.
And the salesperson never asked.
The salesperson’s discount, offered via email, in September met my number.
Again, I signed the order the next day.
I spent a bit more wall clock time than the salesperson, as each visit ( 3 ) to the dealership ‘cost’ me an hour and a half or so in travel time.
I spent the amount of time I felt necessary to be comfortable buying a car for a ( discounted ) price of over $10,000 more than I have previously paid.
And again, the color combination & options that I wanted & did not want ( for close to $50K OTD, I will have exactly what I want, not ‘nearly’ ) combination dictated that I order rather than immediately selecting a unit in stock. This extended the calendar time by just over 5 weeks – and added another hour or so to the salesperson’s time expended.
I did not find the process arduous, nor did I detect any feedback from the salesperson to that effect.
- Ray
Looking now, on behalf of my Daughter – but NOT at Corvettes. . .
unfortunately, this is true. if everyone had to stop and think for a moment just how much the interest payments would add to the price of the car they were dealing on, MAYBE some would put on the brakes and take notice.
but perhaps, maybe not.
if you're a payment shopper, you're likely to stay a payment shopper. you're not thinking... "this hunk of metal is ultimately costing me X dollars - whew that is an expensive car, maybe i shouldn't be making payments on that".
you're living month to month and on the edge of disaster.
people fall into a trap of debt and likely, they stay there. i think the CC companys like to facilitate getting people there and like keeping them there.
when they are there, they are more likely to fall prey to deal trickery (ok, lack of transparency) and paying way way way too much for a depreciating asset than they should because they don't understand, or otherwise able to extricate themselves from their condition.
how many salespeople and dealers point out that financing beyond 3yrs is a good sign, the car isn't appropriate for their fiscal condition?
oh right, not your responsibility. so - your enabling fiscal irresponsibility. i think opportunistically with these long term loans, but that's just my opinion. :shades:
oh right, not your responsibility. so - your enabling fiscal irresponsibility. i think opportunistically with these long term loans, but that's just my opinion.
i think this has been discussed before - its unfair to think that a salesperson should be responsible in telling a consumer what is or is not a fiscally sound decision with regards to purchasing a vehicle. its none of their business. the person making the purchase should know whats best for them. people always want to blame someone else, and never want to take responsibility for their own actions...
-thene :confuse:
but come in with a focus on bottom line pricing for drive off including all fees, and now, is the salesperson doing any work for the customer, or is he/she just a go-between with the sales manager?
i sincerely ask.
my opinion / perspective is the salesman are rewarded for getting people in cars that are not right for them. it IS their business. i suggest they even know when they have someone in the position to manipulate the deal to their best advantage.
if you have the $$$ to buy the car, then i feel they are otherwise trying to bump the car for someone that isn't in that unfortunate position to make up for what they loose in all that interest the purchaser won't be signing up for.
there's probably even a term for a situation where they get someone on financing, and options / bumping, and extended warranty. i presume it's something like triple play or "grand slam" or something. ultimately it's better money in their pocket, right? :shades:
i don't want to rehash a conversation that was had on this same subject just a few short weeks ago, because it just opens a huge can of worms (it did last time too!)
bottom line is this. a consumer should know what they can afford. the salesperson shouldn't have to figure that out for them. if they come in looking for a $25000 XYZmobile, then that is what the salesperson shows them. if buying this car isn't fiscally responsible for the consumer, it is not up to the salesperson to say "hey, it looks like you are pushing your debt to income ratio, and that maybe you would be better off buying that crapmobile over there and saving the additional $20k in the bank towards retirement, or paying off additional debt".
that is what financial advisors are for.
like i've said before - people don't want to take responsibility for their actions. they want to buy, buy, buy, then blame the salesperson for selling them the car that they said they wanted to buy. "its the salesperson/dealer's fault that i couldn't afford this car, defaulted on my loan, had it repo'ed, and now have terrible credit!!!"
who signed the contract?
anyways...thats the last i'll say on this, only cuz its been discussed already, and i don't want to open another can of worms...
you can believe what you like user777 - that's the great thing about this country!
-thene
I agree with Thene.
When I go to buy a car, the salesman may see that I am pusing my debt to income ratio a little too far. However, he does not see how much I have tucked away in savings, 401K, trust fund, etc... which may paint a totally different picture than what he is able to gather from the tiny bit of information I put on my credit application.
For a sales person to be "held accountable" for the car they sale to a given customer would not be feasable. In order for this to happen, a customer would have to disclose all of their financials to the salesman, and the salesman would have to have the education of a financial advisor to truly be able to "advise" the customer on which vehicle would work best for them.
In the end, an adult should be responible for any car they buy. The dealer should have no remorse as long as they don't do anything illegal in order to get a customer into a car they can't afford, and as long they don't take advantage of a customer that has some kind of obvious sickness or mental issue.