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Extended warranties on cars and trucks
There is really only one reason the auto makers, appliance makers, tool makers, etc. push this product to the point that I will walk out if they don't shut up about it, and that is that it is highly profiable to them or they would'nt badger you about it to the point of making me walk out. My normal response to their blabber about how I cannot live without this protection is, "I came here to buy a car/refrigerator/table saw/whatever, if your product is so poor that it won't last beyond the normal warranty then I don't want it in the first place." I mentioned in a prior post on this thread about once buying a warranty on a Sears water softener tha paid off big for us, that is the only product warranty I've ever bought. Probably fifteen years or so ago I read somewhere that Sears's biggest income producer was intrest on their credit cards, second was product warrantys, third was reatil sales. Frank.
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Extended warranties on cars and trucks
May not be true but my understanding is car dealers make as much or more on the financing and warranty as they do the auto.
Hardwood, I agree with you on the quality of the product. kt
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Extended warranties on cars and trucks
It's NOT a fair coin-toss. It's NOT a group deciding to all contribute to protect anyone who loses everything from a lightning strike.
It's a scientifically calculated profit-maker. The insurers are the experts in what is likely to fail when; their lawyers are the experts in protecting their clients, not their clients' customers. And they are the experts in marketing this coverage, which is designed to protect what doesn't need protection and vice versa. (Never covers "normal wear" or "misuse" or "failures related to maintenance for which there is no proof of having been performed at an authorized dealer" or whatever.)
Not buying this insurance is not going without protection. Say it gives coverage for five years. Without it, you have factory coverage for, say, three years. Suppose it costs $1000. By the time the coverage period is well in effect, that might be worth $1500 (depending on whether you'd have to borrow it, or if not, on your investment skills or luck). Thus, you have around $1500 of self-insurance, which if you don't use, you simply keep. No claim forms, no arguments, no exclusions. Isn't that the best kind?
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Extended warranties on cars and trucks
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It's NOT a fair coin-toss. It's NOT a group deciding to all contribute to protect anyone who loses everything from a lightning strike.It's a scientifically calculated profit-maker. The insurers are the experts in what is likely to fail when; their lawyers are the experts in protecting their clients, not their clients' customers. And they are the experts in marketing this coverage, which is designed to protect what doesn't need protection and vice versa. (Never covers "normal wear" or "misuse" or "failures related to maintenance for which there is no proof of having been performed at an authorized dealer" or whatever.) Not buying this insurance is not going without protection. Say it gives coverage for five years. Without it, you have factory coverage for, say, three years. Suppose it costs $1000. By the time the coverage period is well in effect, that might be worth $1500 (depending on whether you'd have to borrow it, or if not, on your investment skills or luck). Thus, you have around $1500 of self-insurance, which if you don't use, you simply keep. No claim forms, no arguments, no exclusions. Isn't that the best kind?
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Like I said, the logic that extended warranties are generally bad for the consumer is sound. Yet we usually buy them on vehicles and they have always paid for themselves for us.
BTW, it's not always true that extended warranties don't cover "wear and tear" items. I was looking at Subaru's factory extended warranty and it does cover wear items like clutches and brake pads.
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