Which is why I don't buy one. It's a big money maker or else they wouldn't offer it. These are very reliable vehicles. As mentioned earlier, you should put your money to better use.It has to be pretty rare that they pay out more than people paid for the warranty. If it wasn't the warranty companies would be out of business very quickly.
Consumer reports states that, on average, 12% of what you pay is paid out to cover breakdowns - not that they're not paying you, just that due to breakdowns, they only end up paying out about 12% the cost of the warranty. The other 82 % is marketing, overhead, and profit. Of that 82%, probably 25% of that is paid in commissionWhat I would love to see is the real data of what people paid for an extended warranty and how much they were able to get more covered. It has to be pretty rare that they pay out more than people paid for the warranty. If it wasn't the warranty companies would be out of business very quickly.
Ouch.Consumer reports states that, on average, 12% of what you pay is paid out to cover breakdowns
Ouch.
So you can buy a $1000 extended warranty and watch it turn into $120 (on average).
Or you can put that money in a CD or MM account, and watch those funds grow.
Based on those Consumer Reports statistics, I'm not sure how much "peace of mind" it would bring, given the expensive extended warranty provides a return of pennies on the dollar (on average).You can also buy the extended warranty and enjoy the peace of mind it might bring. Something for everyone.
Based on those Consumer Reports statistics, I'm not sure how much "peace of mind" it would bring, given the expensive extended warranty provides a return of pennies on the dollar (on average).
Having $1500+ in the bank when the powertrain warranty runs out in 5 years should provide the greatest peace of mind.
Or over $2K if invested with 8% return.Based on those Consumer Reports statistics, I'm not sure how much "peace of mind" it would bring, given the expensive extended warranty provides a return of pennies on the dollar (on average).
Having $1500+ in the bank when the powertrain warranty runs out in 5 years should provide the greatest peace of mind.
This isn't true.People don't always think in terms of dollars saved. Some are comfortable paying a fee up front so that they don't have to worry about researching the issue, finding a competent shop to do the work, shopping around for best prices on parts, etc. That's the peace of mind I'm referring to.
This isn't true.
You don't have to do any of those things when handling repairs yourself.
You can do exactly what people with warranties do...bring it to the dealer and have them fix it.
An extended warranty is actually more restrictive, with less peace of mind, due to all of the loopholes/issues...
being forced to use the dealership, needing approval, maintaining proper proof/documentation of all prior service, hoping they don't deny your claim, fighting with them if they do deny, ect.
You said warranty buyers "don't have to worry about researching the issue, finding a competent shop to do the work, shopping around for best prices on parts."You and I both know that the kind of person who objects to an extended warranty, would also object to bringing it to a dealer to diagnose and fix. As a result, you'd use an independent shop and source parts yourself to save money.
It is absolutely true that extended warranties are more restrictive than simply paying for the repairs yourself.This isn't true.
It's dependent on the warranty you buy and who you get it from. Some warranties are literally extensions of the manufacturer's warranty with all the same requirements. Also, a lot of what you just said is just a business doing it's due diligence. Anyone considering an extended warranty should be taking the time to review the terms to determine whether they are agreeable, same as any other contract or agreement.
No, and this is why warranties are more restrictive, with less piece of mindDo you really think an auto manufacturer would survive if they automatically approved repairs to improperly maintained vehicles with no credible service history?
You said warranty buyers "don't have to worry about researching the issue, finding a competent shop to do the work, shopping around for best prices on parts."
But non-buyers don't have to worry about any of this either, if they choose not to.
They have a big pile of $$ in the bank (from not buying the warranty), which gives them great flexibility...take it to the dealer, independent shop, fix themselves...whatever float their boat.
It is absolutely true that extended warranties are more restrictive than simply paying for the repairs yourself.
Every warranty dictates whether something is covered, whether it will pay for the fix, how it gets fixed, what parts are used, who does the work, ect.
You have none of these restrictions when paying for a repair yourself.
No, and this is why warranties are more restrictive, with less piece of mind
. You are at the mercy of the warranty company to determine if you jumped through all of their hoops necessary to have a repair covered.
- Lost an oil change receipt...denied.
- Don't have documentation that some obscure inspection was done...denied.
- The covered part failed due to supposed issues with a non-covered part...denied.