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Auto extended warranty/repair insurance. Your thoughts please.

edited April 2012 in Off-Topic
Morn'in Coffee,

Okay, this is indeed an investment decision, too. I have performed numerous auto repairs since I was 14 years old, including building engines from the bare block; but many auto repairs I am no longer able to perform, because of: imbedded technology, better use of my time for higher monetary rewards from investing and the kicker for all of us eventually.........age. Also, I am much less willing to perform any "knuckle buster" repairs.
Our house does not flip vehicles very often. The last two vehicles recycled at this house approached 200k miles before replacement. This is the major consideration for extending warranty repair periods from the nominal 36 month periods still in place from most manufacturers.
There are numerous extended warranty/repair insurance programs available for vehicles. For those who have used these repair insurance programs; do you have any comments to the positive or negative about a particular vendor.
NOTE: this is not regarding the extended warranty repair insurance policies offered by retail auto dealers, but the policies offered by the other after-market place vendors.

Thank you for your time and efforts,



  • Sell some of your 'Fund Boat' collection, the top investment portfolio anywhere on the web, and buy a new car. Any idot knows that extended warranty is a rip-off
  • Totally agree. Also buy cars with emphasis on reliability and cost effective in repair. We still drive an 19 years old Honda Civic with 200K miles. Last year we bought a new Odyssey and intend to keep it for at least 10+ years.
  • We just purchased a 2007 Ford Ranger with 42,000 miles for me to drive back and forth to work. I paid 2000 under low book for this truck - it was a really good deal at our local Toyota dealer. When it came time for the final paperwork they discussed the extended warranty - wow! The cost would have took away all my price negotiation for just 36,000 miles of coverage.

    I've added the extended warranty with every 'family car' that we've purchased except the last one. My wife just doesn't keep them long enough to justify the cost. If she would keep her prized Toyota camrys longer than 50,000 I'd buy another extended warranty no problem. Almost any fix on these newer cars ( seat belt motor, tire air whatever its called, heated seats ) cost far more than the warranty. Luckily my little work truck doesn't have none of these fancy gadgets
  • Hi perpetual_Bull,

    Thank you for your input. I should have prefaced, "not the extended warranty policy" offered by auto dealers"; but the other market place insurance vendors.
    As you noted too, at $75/hour at local repair centers plus the expense of parts; it does not take much to find an expensive repair bill.

    Take care,
  • edited April 2012
    Howdy Ted,
    No, no new cars. Looking at 2 year old models, many of which, in our area have about 30-35k miles of use. This is the relation to an extended repair insurance program; most of which will cover many major repairs up to the 150k mile range.

    I don't know that the extended warranty is a rip-off; that is why I posed the question; to determine other's experiences.

    You also noted: "Sell some of your 'Fund Boat' collection, the top investment portfolio anywhere on the web..."

    I don't recall any bragging about our portfolio or the returns. I do hope that some folks get some value from the information. I suppose any member here could start a petition and get me "voted off the island".

    We weren't born with any silver spoons in mouths at this house and have no rich relations leaving us a pile of money. We've clawed and scratched to save and invest our money; and we also want to obtain a decent return and maintain capital going forward. Just a most plain and simple plan.

    Where's the hostility coming from against me? Did I write something towards you that you misunderstood? You have me scratching my head as to the "why".

    Thank you for your other input.
  • edited April 2012
    Hi Catch- Consumer Reports has consistently advised against these types of warranties.

    Late add: This would be the "extended warranty" offered by dealers on a new car, not the aftermarket type. Have no idea on that situation. Where on earth do you find a good mechanic at $75 per hour? Surely not here in SF... more like $150/hr here!
  • Hi Sven,

    Thank you for your thoughts. I should have prefaced, "not the extended warranty policy" offered by auto dealers"; but the other after-market place insurance vendors.
    One car, a 2000 Buick LeSabre has been a great vehicle and this car will stay with us longer with only 127k miles in 12 years. Not a design award winner by any means, but a comfortable ride, full size, low cost insurance (no one wants to steal this car), only normal wear items have had to be replaced, solid construction and best of all is that stop/go driving is consistant for 12 years at 24.5mpg and interstate driving between 60-75mph will return 30-35mpg. The other vehicle, my 2001 mini van has172k miles and is mechanically okay; but as is the problem in MI with attempting to keep an auto for many years is the damage done from the salts applied to the roads during the winter months. One can only do so much to prevent the damage, especially to the underbody, from the salts.
    A newer vehicle is likely in my future before the fall season.

    Take care,

  • edited April 2012
    Well, I am that idiot that actually bought extended warranty on new vehicles. If you intend to keep a vehicle a few years and replace with a new model, such warranty is probably not needed or wasted. I keep my vehicles for 10+ years so there is higher likelihood that I will use such extended warranty.

    I owned a Ford Minivan and bought an AutoNation extended warranty (it was an AutoNation affiliate dealership). The van broke down while visiting from Texas to Orlando. We were driving from Hotel to Disney World. Transmission locked up and vehicle stalled. Transmission job paid the cost of extended warranty itself. We used the extended warranty a few more times after than until we sold the vehicle at age 11.

    BTW, I never buy extended warranty for electronics or appliances.
  • good morning catch

    sorry to 'bud'in.
    I think warrantee is a waste of money.
    You can also go to to research about new car and see previous comments about how much the new car was being paid for. we've got a brand new honda accord 2011-v6 without Nav, last yr right after the earth quakes in Japan, we litterally paid ~21 % less than the mrsp price because Honda was trying to get rid of cars. I think the same could be truth of now. it was a better price than getting a brand new car. you can get a price bidding w/ your local dealers before stepping into the dealers. Also most new cars dealers are offering 0.9% refinancing so it's a win'win situations for you. Most new cars have warrantees up to 3-5 yrs. but I think most old cars warrantees could be a waste of time. You may need to get to know a real good reasonable mechanic.

    good luck.
  • Got you both beat on years, if not on miles: 87 Olds, 70,042miles. Been a great car, maintenance and repairs quite good. Last of the GM mid-sized rear-wheel drives.
  • Hi johnN,
    Thank you. And I am fully aware of pricing for new and/or used vehicles in our area and also any financing costs, either new or used. Although we would likely pay a full cash amount and be done with that part.
    The dealerships in our area are very competitive with with all large dealerships located near the larger population areas. Dealers do want to have inventory turnover. If you know someone is the dealership business; ask how much money it costs to maintain a large inventory of new and used vehicles. There is a lot of money parked in those rows of vehicles.
    Within a 20 mile radius of our home will find about 12 large dealerships who also offer their shorter term form of a warranty against a used vehicle. Yes, this is part of their pricing, too.
    Heck, even my 2001 mini van is worth more than it normally would be during "normal" economic times. There are too many folks who can not afford a newer used car or a new car; and continue to buy into the used car market; which continues to keep upward pressure on used car prices. The known result of this is reflected in stocks of companies such as, Auto, parts, parts.
    We also known some very good local mechanics (businesses); but the hourly flat rate remains at $65/hour and pricing for parts doesn't vary much regardless of the repair facility.
    And be assured that we do research online and by word of mouth what a vehicle we may have interest in, has for a history of satisfaction.
    The rare case arrives being able to buy from the public and get a very good price and vehicle. Such a case exists for me; as I planted a sell seed with a neighbor about selling their used vehicle to me. I know it has been taken care of, for my benefit and they would also receive a fair price; versus a "trade-in" price for another new vehicle.
    Thank you for your thoughts,
  • I get things in the mail all the time to buy warranty insurance. My 2cents is all insurance is weighted against the buyer. If it wasn't, the insurance companies would go broke. Obviously you need insurance in some areas if the outcome could be catastrophic, like health care, home insurance, life insurance. But I don't think car repair insurance or policies like insurance on appliances or the like is a must have. Heck, put the premiums you would be paying into a special car-fix savings account and use the money when needed.
  • Hi Mike- Got my vote on that one!
  • Hi Old_Joe,
    All large dealerships in our area are $75/hour; up from $65/hour from two years ago. This pricing is usually reflected with the local repair garages, too.
    Take care,
  • edited April 2012
    Reply to @catch22:
    Hi Catch since you live in MI and many GM facilities/Ford plants by, maybe it's best to drive to these facilities and pick up a brand new truck off the plant @ a fixed price, so you'll stop wasting money toward the middleman at dealerships... Probably would call 'factory drive off pricing' ... LOL
  • which insurance do you folks find best out there? we have AAA for quite sometimes now and we find them very expensive but cannot find cheaper insurance.
  • Hi johnN,
    In the way-back days early days of manufacturing, that was a method. Even the transport price (now an average cost) that is part of every new vehicle cost used to be by distance. My cost years ago on a new car was $13, as I lived in the area of the build. I actually knew some folks of my age who worked for GM and built part of the car.
    In 1980, brokers existed in the Detroit metro area. We didn't and don't live in this area; but the brokers at the time had a license to place a buy order without having to be a dealership. One checked off the options and such, not unlike ordering from a dealership, the order was placed and several weeks later the vehicle arrived at the broker with only a factory pricing markup (no dealership markup). Keep in mind that the factory has its markup to stay in profit, a dealership pays this price, plus a markup on the base vehicle cost plus another markup price on every option package. So, our cost on two such vehicles only involved the pricing markup from the dealer markups on pricing for the base vehicle or any of the options packages.
    We paid 20% less for the vehicles versus the cost through a local dealership order. We did attempt to bargain the best pricing with our local dealerships. We did have to drive two times to meet with the broker to order and then pick up the vehicle; which involved a few hundred miles of driving.
    Time and miles well paid for though.
    Lastly, although I don't know how important this may be in some places today; dealership size, turnover volume, population base and the number of competitors did have implications as to how much one had to spend for a new or used vehicle. In the 1980's one could find new pricing to vary at 20% between the Detroit area versus a rural area dealership 150 miles away. We have made such a drive several times for the savings.
    Today, I find most of the large dealerships to be more in line with pricing to the large metro Detroit area. Me thinks the dealerships discovered what was taking place.
    Today, I find pricing for a (example) 2010 Chrysler Town and Country to not vary much in pricing between metro Detroit and rural dealerships.
  • edited April 2012
    Hi Catch. Never bought the extended. Sure appreciate what comes with a new car - but these things are a different animal. Tend to agree with the consensus here that it's probably a no-win. But have spoken to some who think such warranties the best thing since sliced bread based on their experiences. I've heard some are better than others (I know - duh) and in many cases the insurer has limits for certain repairs set well below what a dealer will perform the work for - so you end up paying the difference. If considering a particular insurer, do yourself a favor and ask the service manager where you're likely to have work done about his-her experiences with this company.
  • This uncertainty is part of the reason I greatly prefer a new car. I would rather have a new Chevy Cruze than a used luxury car. Especially with the low interest rates on new cars these days.

    There are some good deals on pickup trucks. I saw a new Chevy Silverado advertised for under 18k yesterday with locking differential and power windows and mirrors.

    Regarding road salt, I routinely take my vehicles to self serve bays in the winter just to rinse off the underside.

    As for the extended warranty, it is in fact an expensive insurance policy.
  • I see a lot of people have recommended buying a new car regularly. A couple points.
    1) Consumer Reports routinely recommends against extended warranties.
    2) But a good quality car, and don't buy the warranty
    3) I usually go for 250,000 miles on a car or truck, or about 18 years. The biggest problem is always the rust, so far. (However, I am only on my 3rd car in my life). Currently, our 1995 Toyata Pickup is at 215,000 miles. The rust problem is controlled (we stored in inside during the winter the 1st 5 years, and used an old beater for winter travel).
    4) It seems to me much cheaper to spend 1 to 1.5 thousand a year to maintain the truck than to spend 500 a month for 3-4 years on a new one. $1500 a year for 10 years is only $15,000. Much cheaper than a new vehicle. Every time I look at the cost of a new pickup, I get sticker shock, and decide to keep my current truck longer.
    5) I do buy factory parts when I get repairs. They cost more, but mean I keep a "like-new" vehicle. I have a lifetime warranty on shocks, and on mufflers.
    P.S., my truck has always lived in northern states which have snow.
  • circa33,
    Hello catch22
    Just a note to thank you for your work on the Fund Boat. We have our Roth Ira
    self directed Ira with Fidelity so we appreciate your time spent on the boat. We are selling our 1991 Toyota with 165,000 miles and looking to buy an 2010 or 2011
    camry as our new slightly used car.note we still have the 68 camaro.
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