Extended Warranty - Worth it?

C

Celestine

Member
:
Mazda
Hi,

I bought a 2015 CX-5 and the extended warranty. Just wondering what are your opinions regarding this? How many of you have bought the extended warranty, too?

I'm thinking of canceling it but not really sure if it's wise to do so.
Any input would be greatly appreciated.

Thanks!
 
Depending on what kind of extended warranty you've got. If it's not from manufacture, it's not worth it. CX-5 has good quality and reliability, and new car powertrain warranty is long. I believe "self-insure" may be the best way to go.
 
I think so. Things like transmissions, A/C's, differentials, wheel-bearings (some), and the like can be very $$ at inopportune times. When you buy a vehicle and finance the warranty in, it's something like $20 or so per month, and gives you peace of mine for half a decade at that price. Nothing like wondering "Is that noise the A/C compression going out?" in the dead of summer at 80K miles and then thinking..."So what if it is?"
 
yrwei52 said:
Depending on what kind of extended warranty you've got. If it's not from manufacture, it's not worth it. CX-5 has good quality and reliability, and new car powertrain warranty is long. I believe "self-insure" may be the best way to go.
Click to expand...

They are all the same, if they are reputable. Manufacturer's don't sell warranties. Dealerships sell 3rd party warranties.
 
I liked the extended service contract. I doubt it is any real savings, but it was convenient not having to worry about anything for the first 3 years

With that, I elected NOT to get it this time around since I am living in Germany and just getting them to honor the Mazda USA factory warranty is challenging enough.
 
NO. I have never bought one so that is about $1,500X 7=$10,500. Used money, bought APPL stock which grew to ~ ?$30,000. Ed
 
Celestine said:
How many of you have bought the extended warranty, too?
Click to expand...

My limited experience. The question came up in 1999 when we bought our Volvo S70 (kept for 13.5 years). At the time, the extended warranty gave additional coverage for 7 years (actually 4 years given that the car carried factory coverage for the first three). We opted to skip the coverage and monitor expenditure instead. Our result was that exclusive of any income you could have made by investing the money, we had 300$ left over after paying the costs of repair items which would have been covered by the warranty had we bought it.

If you can afford it, more insurance is increased piece of mind. If you can't or won't, then research and buy a car likely to prove reliable to reduce the probability that and extended warranty would yield a benefit. I have found that Mazda makes such cars based on my history with the company. I currently drive my third (2010 Miata) and fourth (2013 CX-5). Got my first in 1990.

Brian
 
It's like health insurance. You could save thousands per year on it, but if you NEED it...it's nice to have it. Especially as expensive as things are. For example, there is a thread on this board right now, some guy thinks he has engine trouble and is stressing from being out of warranty. An AC compressor going out will be worth the warranty. Transmission. Etc. I'm firmly in the camp of getting it. It costs about $10 more a month than GAP.
 
The extended warranties my dealership were in excess of $100 additional per month...no way in hell I was going to pay that. I'm all for GAP coverage, but the manufacturer warranty is good enough for me.
 
GP 2004 said:
Which extended warranty are you getting?
Click to expand...

I bought one through my credit union. It added about $20/mo to my note, and it covers 100% of the vehicle for 72mo/100K miles, with a $100 deductible. Which means my transmission can take a dump at 98K miles, in 4.9 years, and I'm out $100. Or my AC system. Or the motor. Or the HPFP. Or an injector. Or any number of stoopid expensive items. If I sell the vehicle before then, I get it back, pro-rated, of course.

$100/mo on a 60mo note is like $10K. What on EARTH kind of warranty is that!?
 
Unobtanium said:
They are all the same, if they are reputable. Manufacturer's don't sell warranties. Dealerships sell 3rd party warranties.
Click to expand...
Many automakers, including Mazda, sell extended warranty. Mazda Extended Confidence has variety of plans which suit your needs. Strange thing is most Mazda dealers are not interested of selling it instead they're trying to sell the third party warranty. Mazda Extended Confidence may be managed by a third party, but it's definitely backed by Mazda and all repairs will be done by Mazda dealers. Few years ago a major third party extended warranty company went out of business and left those car owners for nothing. The other thing is many third party warranty companies only allow you to fix car problems at specified garages, or you have to wait an adjuster coming in to inspect and approve the repairs. This is the fine print I read from a third party extended warranty offered by our Mazda dealer when we're purchasing our CX-5. Of course we declined.
 
erhayes said:
NO. I have never bought one so that is about $1,500X 7=$10,500. Used money, bought APPL stock which grew to ~ ?$30,000. Ed
Click to expand...
+1 - I'm with you er...... For the past thirty plus years, I've been buying (new) and replacing two household vehicles and never once had an outrageous repair bill that would have been covered by an extended warranty. Even if I had been talked into one of these warranties, I never would have had a claim in all that time. Look at all the money saved (and thus invested) that otherwise would have been extra dealer markup or profit to a third party.

See what Consumer Reports says about extended warranties -

http://www.consumerreports.org/cro/...ties-for-cars-are-an-expensive-game/index.htm

And what our local GA consumer advocate has to say about them -

http://www.clarkhoward.com/beware-buying-auto-repair-service-plans-older-vehi
 
erhayes said:
NO. I have never bought one so that is about $1,500X 7=$10,500. Used money, bought APPL stock which grew to ~ ?$30,000. Ed
Click to expand...

+1 (thumb)

CX-5 is about as bullet proof as they come. Most owners can expect to have no major repairs which is why the extended warranty's are profitable for whoever issues them and why an extended warranty for a CX-5 costs less than one for a Jaguar. It matters little who the issuer is, they all want to make a profit and that profit comes from the difference between premiums paid and claims paid (after subtracting program overhead, taxes and salaries). I

If you have enough $avings to cover an unexpected repair (and opt out of extra warranty) then your profit by doing so is (on average) equal to the profit the warranty company would have expected to make off you, as well as your share of the companies overhead and taxes. However, it is comforting to know that Mazda offers extended warranty's at lower cost than third party companies because Mazda knows their product better than anyone so the relatively low premiums speak volumes about how they expect any given model to require repairs. If you do not have enough savings to cover an unexpected repair then maybe a less expensive car is the wisest move. Extended warranty's are not the road to financial independence that so many make them out to be. A savings account is a good thing.
 
With extended warranties, you're paying someone to take the risk of a costly repair for you. You pay for that "insurance service".

Should you do it? If the insurance cost is low enough, yes.

Example: I have an Electrolux induction cooktop. Just out of warranty, and now only 1 burner of 4 will work at the same time. A net search shows it's common - induction modules that fail due to cheap electronics. The repair cost is ~ $1,100. A new one costs perhaps $1,400. I'd get a new one rather than repair it.

When I replace it, I'll buy a Kenmore (manufactured by Electrolux for Sears) AND the extended warranty Sears offers for $240. We know that 5 of these Electrolux units failed in our 24 unit condo within the first 4 years - a 21% failure rate. This gives me all the info I need to estimate whether the extended warranty is a good deal.

Essentially, buying an extended warranty means ducking an expected $1,400 replacement bill with a 21% probability of failure. The "expected saving" is 21% of $1400, which comes to $291.00. The cost is only $240. Therefore, it's a good deal. It is one of the few extended warranties I've ever bought, and I'm probably tens of thousands of dollars "ahead" because I've paid for my own unexpected failures, but saved much, much more by not buying these warranties.

Remember - extended warranty companies aim to MAKE A PROFIT. They can only do this if their warranty price is substantially higher than their warranty payouts. Most of us buy enough "stuff" that we can afford to be "self-insuring" - that is, pay our own out-of-warranty repairs rather than paying someone else to take the risk for us.
 
dergibog said:
I'm not a gambler, so no, not worth it to me.
Click to expand...


But you are a gambler, like all of us. You're betting you won't experience a horrendously expensive out-of-warranty expense. I'm betting the same thing because I won't buy an extended warranty for my CX-5 either. Somebody who does buy the extended warranty is betting he will experience out of warranty repair costs that exceed what he's paid for the warranty. That's usually a bad bet.
 
Rarebit said:
But you are a gambler, like all of us. You're betting you won't experience a horrendously expensive out-of-warranty expense. I'm betting the same thing because I won't buy an extended warranty for my CX-5 either. Somebody who does buy the extended warranty is betting he will experience out of warranty repair costs that exceed what he's paid for the warranty. That's usually a bad bet.
Click to expand...

This is a good point - It's a gamble either way but, one choice (buying the warranty), the odds are against you and the other choice (passing on the warranty) the odds are in your favor. Most people who take a lot of bets with unfavorable odds do not end up financially independent but always struggling to stay afloat.
 
MikeM. said:
This is a good point - It's a gamble either way but, one choice (buying the warranty), the odds are against you and the other choice (passing on the warranty) the odds are in your favor. Most people who take a lot of bets with unfavorable odds do not end up financially independent but always struggling to stay afloat.
Click to expand...

http://www.mazdas247.com/forum/showthread.php?123850355-Tapping-Noise-in-engine-bay

Sometimes ya win, sometimes ya don't. The thing about the warranty is that you know the cost, and it is planned for. You have no IDEA what (if anything) is going to take a dump in the next 100K miles.
 
Not worth it. I purchased extended warranty when I bought my 2010 Mazda3 S and I ended up never using it. The powertrain warranty for brand new Mazdas usually go up to 5 years or 60,000 miles. The North American CX-5 should be fairly reliable, based on the True Delta reports that I have seen. That said, it will only be reliable if you keep up with maintenance. If you're the type of owner who doesn't keep up with maintenance, then the extended warranty might be of use to you down the road.

I believe the better thing to do is to set aside money every month into a "car fund". Say, you can save $50 a month till you reach $5000 on your car fund. If there is ever any costly repair not covered by the powertrain warranty, you should at least have some amount of money to pay for the repairs. If you end up never having to pay for costly repairs, then you already have a good amount for a down payment for your next car purchase.
 
Please log in or register to reply here.

Similar threads

C
    • Wow
Dealer extended warranty. Worth it?
2
Replies
30
Views
1K
Tchman2016
T
Z
Another CX-5 warranty thread!
Replies
5
Views
2K
HyFlyer
HyFlyer
Z
Another (but different!) extended warranty question
2 3
Replies
41
Views
8K
chickdr
C

Latest posts

Back