Extended warranty - Whats the deal?

[topazsparrow]

Can someone who's really researched this offer some advice.

Dealers are always really pushy about the extended warranty and they stand to make a lot of money... So naturally I don't trust a thing they say.

What's the deal? Is it worth it? At one point it must be. What circumstances would make an extended warranty a good idea on this car?

[asmallchild]

It's not worth it.

Dealers are pushy because these warranties represent pure profit for the dealership. The finance manager spent more time trying to sell me the extended warranty than the salesman spent trying to sell me the car.

I'm sure there are scenarios where one may make sense, not for me though (and I suspect for most car buyers)

[FirestormFRS]

I purchased one. The reasons being it's a brand new platform including engine and I am fortunate to get extended warranties at a huge discount due to my employment.

I'd advise only to buy manufacturers extended warranty and not third party warranties though.

[Speedy000]

meh i bought the extended warranty of my tc biggest waste ever. then agian that was a brand new car. when we got a used mazda3 i got the warranty and it paid for its self when shit kept breaking.

[TRD-X]

Well if your not going to keep the car more than 5 years it's a waste of money to buy a extended warranty.

Let google and your local BBB be your friend and research the company offering you the coverage before buying a extended warranty from them.


[ame="https://www.youtube.com/watch?v=hSSIpcmTKRE"]Extended Warranty For Your Car?: Car Expert by Lauren Fix - YouTube[/ame]

[jlu]

If you're a time traveler from the future, it's worth it.

[jacobzking]

Also, I believe you can extend the factory warranty if you take the car in before 24k or 24months (whichever comes first). But the factory warranty is pretty good, and if you consider the cost of the warranty vs the cost of likely repairs, its probably not worth it for a new car.

[finch1750]

For most it may not be worth it. I bought it for a two main reasons:

1) It is a brand new model, and mine was part of the first shipment at that so it didn't have any chance to get anything corrected from the factory

2) I drive almost 30k miles a year, so my warranty would be up well within 2 years. My 100k will last me about 4.

Combine #2 with #1 and it was worth it for my piece of mind. Plus you can get them relatively cheap considering its all profit, so you can really talk them down on it. Also you can always get a prorated credit if you want to end the extended warranty early as well.

[thill]

I have only bought an extended warranty one time (it was on a $40K vehicle that had tons of features/options/ electronics and we got the warranty for $680 that extended bumper to bumper from 3 years 36K miles to 6 years, 70k miles). This was the only time I have bought one and have purchased about a dozen cars brand new and it never bit me.

I did not get one for my BRZ. Finance manager pissed me off. He basically told me I was crazy not to get it and made it sound like the car was going to fall apart after the warranty expired.. I countered him by saying "so you are saying Subaru does not make reliable vehicles? Funny, your sales manager kept telling me how reliable Subaru vehicles are..."

He shut up and did not push another thing...

Folks the dealer probably makes more money on warranties, paint protection, fabric guard, etc than they do on the vehicle sale.

[whaap]

I call it snake oil. If a product or a part of a product survives infancy there's a very good chance it is not a faulty part nor has it been installed improperly. Consider that the standard factory warranty of three years far exceeds any period of time that might be considered infancy. If you treat your equipment right and maintain it properly I would say the odds are greatly in your favor. However, if you're from the school that likes to "drive 'em like you stole 'em" then you might find it worth your money.

[FRiSson]

It operates the way that insurance operates. Essentially they make a statistical and probability analysis. If it shows that the initial price for the warranty is very likely to be far more than the total payout than they offer to insure you. Now, if you are the 1 in 4 or 1 in 10 people that actually needs more warranty work than the policy costs then you are lucky. However, statistically, you are much more likely to be a loser on the deal - just like at the slot machines. However, and here is the caveat, since it is a new vehicle, the reliability of the car is less predictable. It could be that the FR-Z is quite problematic later in its life. In that case, everyone who bought the warranty will be winners. But that is pretty unlikely. Both Toyota and Subaru have a better-than-average track record with new cars.

Another thing to think about is that they will pay out money for repairs over the life of the warranty - while you have to put up the money up front. Therefore you have to calculate the lost value of that money over the x years of the warranty. While they may only have to pay out on the last few years. In that way, they make money (by investing it) and you lose money (lost interest and opportunity for the use of that money) during the period of the warranty. So your real cost is higher than a dollars-to-dollars comparison.

[Mikem53]

Dealer profit.. That's why they push them so hard.
First they Tell you to buy the car because it's so reliable and dependable. Then when you do sign the papers to buy the car the first thing they tell you is how things can go wrong and how expensive it will be to fix and how you need the warranty.. It's all crap.
If something goes wrong.. It will most likely be cheaper to fix than the premium costs for the warranty.. And if the underwriter for the warranty is still in business when you need it.. You then get to fight about using remanufacturered parts or it not being covered.
Best bet is to take the money that you would use to buy the warranty and either invest in the stock market or put it in the savings account and use it if you have to or save it for your next new car

[whaap]

Think of it like Las Vegas. A bunch of us are meeting there in two weeks. Among our crowd, when playing the tables, there might be a few winners. By far there will be more loosers.

[whtchocla7e]

Based on the early problems with this car, which affected me as well, I'd rather the extended warranty.
My confidence in the platform has decreased from 100% to 30% over the last year.