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Extended warranties on cars and trucks
The conventional wisdom on automotive extended warranties is that they usually aren't worth the cost. And although I totally agree with that logic we always buy an extended warranty anyway and have never lost money on one. We buy them sort of as an insurance policy - pay the known cost up front rather than face uncertainty and possible large expenses later.
Ford Taurus SHO - repeated electrical problems with windows and mirrors, A/C problems, broken trunk latch (required rewelding of latch and paint), rear brakes a constant problem, thousands of dollars in repairs after the factory warranty expired.
Ford Ranger - with a few hundred miles left on the extended warranty both heads had to be replaced on the engine. The repair bill would have been around $500 more than the cost of the warranty.
Toyota Highlander - One month after the factory warranty expired the HVAC control panel had to be replaced - $800 for the part plus labor. We paid that $800 for the warranty so it's a wash at worst.
I'm curious how many of you have purchased the extended warranty and not needed it vs. needing it and not having it.
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Extended warranties on cars and trucks
Kw; Sounds like you did a good job of research before you bought the extended warranty policy. One of our kids had a rather bad experience with one a few years ago. The fault lay on both ends, the daughter failed to do her research before buying, and the insurance company was operating real close to the line far as state insurance regulations were concerned. I've never had one on a car or pickup, but one time did buy one on a Sears water softener, it paid off big time on that piece of junk. Frank.
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Extended warranties on cars and trucks
I never have purchased the extended warranties. On my automobiles, a few things have gone wrong but never enough cost to justify the up-front output, plus the problems have always been very minor. My vehicles are always been Ford, GM and Chrysler. Chrysler has an unlimited drive train warranty on their new vehicles for the original purchaser.
With regard to extended warranties on electronics and appliances, it is never worth it.
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Extended warranties on cars and trucks
Yooper that warranty doesn't cover diesel trucks.
I have an '03 Ram quad cab, 4x4, automatic, H.O. diesel that I bought the extended warranty on for about $1200 plus interest. It covers car rental too while repairs are being done. I'd say I have gotten about $10,000 or more in repairs done including a new trans last month. Murphy's Law says that just when you don't have insurnace---youi need it.
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Extended warranties on cars and trucks
Frank, we must have had the same Sears water heater 
We don't buy extended warranties on electronics or small appliances. We did buy one on our WaterFurnace heatpump. That's a total piece of junk and the warranty has paid off four fold (new ground loop pumps, thermal expansion valve, burned up control relays, zone control panel, and a ground loop leak).
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Extended warranties on cars and trucks
Insurance is a money-maker for the seller (which explains the push), not leaving much left over to pay claims, so you might want to ask:
Will the insurer be there when you have a claim? If so, will the items claimed be covered? If not, will you have to accept the insurer's decision or will there be an appeals process? Will there be a deductable or a ceiling on claims? If you get, say, a new engine just before expiry, and it fails, what would be the coverage if any?
If you invested the cost of the coverage, what would it be worth by the end of the period?
In short, get a copy of the actual policy and study it before deciding.
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Extended warranties on cars and trucks
Auerbach, I buy my extended warranties for my trucks through the dealer selling manufacturer-sponsored palns. That way I can bitc..errrr...complain right up the chain of command if there is a problem, and I don't have to worry about them skipping town as easy as a fly-by-nite company. As far as the cost versus what you get from what's left after the dealer takes his cut, that shouldn't be a concern. Like any insurance policy there is no realist connection between what you pay and your claim cost. The premiums we pay go into a big kitty from which the insurance companies invest those preminum dollars to make mor money and cover claims. And the deductible goes toward associated fees and costs. Similar industries are medical insurance and home owners insurance. A dealer freind of mine sold me my policy for their cost--he showed me the mark-up sheet---they mark it up 100%---so there is a lot of "fat" in the price when it comes to negotiating the final cost. And even if the dealer makes nothing on the paln itself he stands to gain on warranty service claims.
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Extended warranties on cars and trucks
Like EW, I only buy extended warranties that have the manufacturers name on the (Ford ESP, Toyota ESP, etc.). They will negotiate like crazy on those plans too - on my last Toyota they were asking like $1500 for it and I ended up buying the extended warranty from a different dealer for half that.
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Extended warranties on cars and trucks
Having been in the car business for a time, I would say your best bet is to buy the warranty and to negotiate the cost. Huge markup in MOST of them. Subaru seems to be lower in cost and refunds the price it you don't use it.
Realistically, it is a coin toss as to whether or not you will need the thing but as already stated, it is like insurance.
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Extended warranties on cars and trucks
As far as the price goes, there is a direct correlation between the price and how confident the manufacturer is with the product---the higher the price and the less the coverage is a good (err...bad?) indicator that they really don't have confidence in the product which could be based on initial design parameters (like purposely not heat-treating tie rod ends---"sorry not covered" , actual field testing, actual testing data, and more importantly real-world test data-- otherwise known as "you the customer who complains about a failure". I know from a 10-year stint as an automotive service engineer/technical writer/illustrator that Engineering inherently blames Manufacturing who then blames Warranty. All have deadlines and budgets to meet. When that doesn't happen, all hell breaks loose and somebody has to take the blame. By then Management has changed, and engineers have moved on to another project, Manfacturing is building something new. Warranty gets left holding the bag.
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