Why I bought the extended warranty

[zc06_kisstherain]

OP is WINNER!

glad warranty covers it. i would've bought extended warranty if i take my car to dealership for services + staying STOCK.

[extrashaky]

Originally Posted by Dadhawk

Extended warranties are basically an over/under bet, and the house almost always wins. @extrashaky, I'm glad the gamble worked "to your benefit" this time.

Insurance is not gambling. It's risk mitigation. You exchange a risk of unknown impact and replace it with a known cost that you can account for.

Gambling is actually the opposite. Gambling involves taking on an unnecessary risk of loss in the hope of a larger return. I didn't take on any risk when I purchased the warranty. I paid Subaru to accept that risk on my behalf. I don't actually gain anything if it pays out. I didn't just "win" $5000. The warranty erased the negative effect of a $5000 loss.

Seems to me the real gamblers are those of you who are risking that the car won't break down and have no idea what this car is ultimately going to cost you to keep it on the road.

Full disclosure: I'm a CPA with a degree in finance and a background in risk mitigation, now working in the insurance industry. And because I have a pretty good idea how risk works, I don't gamble. I don't even buy lottery tickets.

[perryair]

for the subset of car owners that intend on owning instead of leasing, driving the car a 'standard' or higher mileage for the foreseeable future, keeping the car past the 60k standard powertrain, are able and patient enough with their local subie dealership to do the work there and don't plan on modifying the car in any appreciable way then there is definitely a value proposition to purchasing the insurance.

but if you are unsure or unable to keep those elements to your ownership profile then ymmv. im glad the op has that warranty work now paid for. i do know that there's lots of folks such as myself with ownership expectations and experiences where it would be less of a potential 'win'.

[~el~jefe~]

most extended warranties are through the dealer, and the dealer will just say, "Nah!"

hence why most are not worth it at all. If the warranty allows a person to go to any mechanic, that is more of a solid purchase.... which normally does not ever exist.

Wear and tear is not covered, abuses of driving it hard are not covered. So what on earth IS covered at say 80k miles? what breaks due to manufacturer's defect at 80k miles that could not be at all construed to be Wear and Tear? Very few things. It is a complete gamble to buy a warranty. I think you should consider buying a lotto ticket. At least youll have fun and decide if and when you want to get reamed up the sphincter.

http://autoexpert.com.au/buying-a-ca...ended-warranty

this guy knows a lot about car buying and all sorts of things and is quite humorous as well. I trust his advice and I do not trust a car salesman. Strange concept, I know.

[extrashaky]

Originally Posted by perryair

but if you are unsure or unable to keep those elements to your ownership profile then ymmv.

If you plan to sell it before the base warranty is up, then of course it makes no sense. If you plan to mod the car, then of course it makes no sense.

But if you just aren't sure, it still makes sense, because you can sell the extended warranty back if you get rid of the car early. Even if you use part of it, you can sell the prorated portion back.

Originally Posted by ~el~jefe~

http://autoexpert.com.au/buying-a-ca...ended-warranty

this guy knows a lot about car buying and all sorts of things and is quite humorous as well. I trust his advice and I do not trust a car salesman. Strange concept, I know.

Interesting that you claim to trust his judgment while arguing against buying the Subaru factory extended warranty, because in that article he said this:

The only extended warranty to consider is the factory extended warranty – when Holden (or whomever) is offering five years instead of the standard three for a change. That’s usually a good deal.

So I'm not really sure what point you were trying to make, when the guy you're holding up as an expert says the warranty I bought is a good deal. Thanks for the support, I guess.

[RiskyTrousers]

Originally Posted by extrashaky

If you plan to sell it before the base warranty is up, then of course it makes no sense. If you plan to mod the car, then of course it makes no sense.

But if you just aren't sure, it still makes sense, because you can sell the extended warranty back if you get rid of the car early. Even if you use part of it, you can sell the prorated portion back.





Interesting that you claim to trust his judgment while arguing against buying the Subaru factory extended warranty, because in that article he said this:

The only extended warranty to consider is the factory extended warranty – when Holden (or whomever) is offering five years instead of the standard three for a change. That’s usually a good deal.

So I'm not really sure what point you were trying to make, when the guy you're holding up as an expert says the warranty I bought is a good deal. Thanks for the support, I guess.

I think what he's saying is factory extended warranties are good since they are through the manufacturer and can be honored at any dealer. Dealer extended warranties are bad since they are typically through some sort of third party and are usually filled with lots of "gotchas" so as to deny a claim much more easily, on top of only being honored by one, or a few, dealers.

[~el~jefe~]

Originally Posted by RiskyTrousers

I think what he's saying is factory extended warranties are good since they are through the manufacturer and can be honored at any dealer. Dealer extended warranties are bad since they are typically through some sort of third party and are usually filled with lots of "gotchas" so as to deny a claim much more easily, on top of only being honored by one, or a few, dealers.

absolutely. A person could easily be lied to and sold a dealer warranty with all the claims of the subaru warranty. On long island, all places I went to refused to even talk about the website subaru warranty and wanted it sold from their finance department.

The price is completely variable however, it is whatever the dealer wants to make it.

If I bought one, I would triple check it to make sure it can be used at any dealer in the USA.

[finch1750]

Originally Posted by ~el~jefe~

absolutely. A person could easily be lied to and sold a dealer warranty with all the claims of the subaru warranty. On long island, all places I went to refused to even talk about the website subaru warranty and wanted it sold from their finance department.

The price is completely variable however, it is whatever the dealer wants to make it.

If I bought one, I would triple check it to make sure it can be used at any dealer in the USA.

I dont know of anyone on this forum who has reported that. Doesnt meanit has happened but kind of a wierd conclusion to jump to.

I got my extended warranty through the dealer finance department but they offered me one directly through Toyota which was exactly the same as the standard warranty just longer. I only used it once to cover a $400 part but oh well I guess. I probably wont do it again but I bought the car at release and was driving 35k miles a year at the time and was in a position where the extra $10 a month or whatever was easier then being stuck replacing an engine so I wanted the 100k miles or worry free driving. Now that I could better afford the hit Id rather set that money aside myself and prepare to cover a cost of parts considering I could do most labor myself anyway

[ToySub1946]

extrashaky: "Apparently the oil pump shattered"

Boy it would be fun to know what Subaru thinks about this one. Appears two dissimilar metals within that pump. Vibration may have caused the one to shatter. Possibly steel was not properly hardened to suit the task ? They'll know, but will we ever hear what they find and decide to do to prevent similar incidences.

[Dadhawk]

Originally Posted by extrashaky

Insurance is not gambling. It's risk mitigation. You exchange a risk of unknown impact and replace it with a known cost that you can account for....

Primarily what it boils down to here is semantics.

I have no argument with folks that want to mitigate risk by purchasing insurance, heck I have my fair share. But at the end of the day, insurance and gambling are similar products.

I know you know all this but....

In insurance the company sets rates based on actuarial tables (figures out the odds) and then charges for the product based on the likelihood of the event they are insuring against occurring within the policy. On top of that they then add the cost of administering the policy (administrative fees, commissions, profits, etc). The consumer purchases the product because they believe they will need the product within the timeframe the insurance company has determined that statistically they will not need it.

In simple terms, the insurance company is betting you won't have a claim, and you are betting your are.

So, as I illustrated in my case above, I choose to "self insure" by assuming the same risk as the insurance company (and I do set aside the money to cover the risk). Others aren't comfortable doing that, and that's OK.

This is another one of this "religious" arguments that most people have to agree to disagree on. The issue is that its a one-sided proof argument. It's easy to find folks that have had the warranty "pay off" but not so easy to find (the majority of) folks going around saying "yep, paid for the warranty, but never used it".

[carbonBLUE]

I'm over 100k miles and I drive her hard every day, so yeah it is a gamble on the extended warranty. Best option is to buy at a dealer that gives 100k warranty for free and buy extended on top of that. I've been out of my warranty since 36k miles

[Dadhawk]

Originally Posted by carbonBLUE

I'm over 100k miles and I drive her hard every day, so yeah it is a gamble on the extended warranty. Best option is to buy at a dealer that gives 100k warranty for free and buy extended on top of that. I've been out of my warranty since 36k miles

Well, you were out of your bumper-to-bumper to 36K. The drivetrain went to 60K (unless you ran out of time first which seems highly doubtful given you are over 100K).

You may have known this but there seems to be a lot of folks think the warranty ran out at 36K altogether.

[Yardjass]

Originally Posted by Dadhawk

Primarily what it boils down to here is semantics.

I have no argument with folks that want to mitigate risk by purchasing insurance, heck I have my fair share. But at the end of the day, insurance and gambling are similar products.

I know you know all this but....

In insurance the company sets rates based on actuarial tables (figures out the odds) and then charges for the product based on the likelihood of the event they are insuring against occurring within the policy. On top of that they then add the cost of administering the policy (administrative fees, commissions, profits, etc). The consumer purchases the product because they believe they will need the product within the timeframe the insurance company has determined that statistically they will not need it.

In simple terms, the insurance company is betting you won't have a claim, and you are betting your are.

So, as I illustrated in my case above, I choose to "self insure" by assuming the same risk as the insurance company (and I do set aside the money to cover the risk). Others aren't comfortable doing that, and that's OK.

This is another one of this "religious" arguments that most people have to agree to disagree on. The issue is that its a one-sided proof argument. It's easy to find folks that have had the warranty "pay off" but not so easy to find (the majority of) folks going around saying "yep, paid for the warranty, but never used it".

Yep, I do that too. When you're both the house and the "customer", eventually you're going to lose but as you stated before, in the long run the odds are overwhelming in your favor that you're going to save money. Those insurance companies stay in business because of this very fact so why not take the profit out of their hands and keep it in yours? Obviously the OP was well served with a warranty but until such time as I can see the future to know exactly when I should or should not purchase a warranty, I will continue to save my money and pay up on the rare occasion that something bad happens. Even then, I may be too busy getting rich on sports bets with my Biff almanac to even be bothered with setting up an auto warranty.

[Tcoat]

Originally Posted by Yardjass

Yep, I do that too. When you're both the house and the "customer", eventually you're going to lose but as you stated before, in the long run the odds are overwhelming in your favor that you're going to save money. Those insurance companies stay in business because of this very fact so why not take the profit out of their hands and keep it in yours? Obviously the OP was well served with a warranty but until such time as I can see the future to know exactly when I should or should not purchase a warranty, I will continue to save my money and pay up on the rare occasion that something bad happens. Even then, I may be too busy getting rich on sports bets with my Biff almanac to even be bothered with setting up an auto warranty.

Between my wife and I we have put a grand total of over a million miles on our last 7 cars (4 mine and 3 hers) and have spent the horribly excessive amount of $180 in repair work that would have been covered by an extended warranty. That was to repair a headlight mount that broke when 1000K out of the regular warranty. These were all Mitsubishis and one DSM! The only expensive repair was to my Talon when it threw the timing belt and that wouldn't have been covered anyway since it happened at 180K and should have been changed at 100K.


Now I did consider the extended for the FRS since it was a new and unknown car but I would have chewed up even the extended by now and have not had to have a single thing fixed.


Damnit you changed the future on us! We were supposed to have all sorts of cool shit by now.