Two year extended warranty worth it?

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2019 Mazda CX-5 Signature Machine Grey
I negotiated a 7 year 100k warranty from over $2000 down to a little under $1400. My multi brand dealer uses Zurich. They offer different levels, mine is the comprehensive plan. No deductible at selling dealer, $100 elsewhere. And yes all electronics, power fold mirrors, adaptive led headlamp assembly’s are covered...Everything but normal wear items.
 
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2019 CX-5 GT
What 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.
 

bronzeglide

2021 CX-5 Signature
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.
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.
 
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Phoenix
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2020 CX5 signature
What 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.
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 commission
 
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.
 

sm1ke

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'18 CX-9 Signature
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.

You can also buy the extended warranty and enjoy the peace of mind it might bring. Something for everyone.
 
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.
 

sm1ke

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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.

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.
 

bronzeglide

2021 CX-5 Signature
I think people just buy things on credit instead of saving money or saving up for something they want.
 
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2018 AWD GT Premium Red/Black
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.

Maybe I'm the only one that would have more stress worrying about trying to squeeze blood from the warranty turnip than peace of mind from having the "coverage".

Their goal is to find ways to not spend any money on claims, including the pre-conditions and hoops to jump through.
 
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.
 

sm1ke

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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.

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. Dealer shop rates are much higher than those of independent shops, and part/service prices are likely higher too. As a result, you'd use an independent shop and source parts yourself to save money. Same reason you'd skip out on the extended warranty, to save money.


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.

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.

Do you really think an auto manufacturer would survive if they automatically approved repairs to improperly maintained vehicles with no credible service history?
 
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.
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.

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.
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.

Do you really think an auto manufacturer would survive if they automatically approved repairs to improperly maintained vehicles with no credible service history?
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.
 

sm1ke

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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.

The "big pile of money" is the price of the warranty offered, plus interest leading up to whenever you have to spend that money (or whenever the extended warranty would have expired).

Using the warranty example from the OP, that's $600 plus interest. If OP chose not to purchase the warranty, and in year 4, a power folding mirror needed to be replaced, they might consider taking it to the dealership. Thanks to other owners here, we know that the dealer cost for power folding mirror replacement is something like $600-750 per mirror. Someone who wants to save that initial $600 on the warranty price will also want to save as much money as possible trying to get the mirror fixed. 99% of the time this means not taking it to the dealer because of the shop rate and the markups. Makes perfect sense to me.


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.

Sorry, I misunderstood. You're correct about that.


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.

Again, it's up to the buyer to read and understand the terms of any contract they enter into. You can't sign up for a warranty and then complain about being denied coverage because you forgot to adhere to the terms. As I said before, auto manufacturers wouldn't survive if they automatically approved repairs to improperly maintained vehicles with no credible service history. If you follow the terms of the specific warranty you buy (again, they are not all the same), then you have peace (not piece) of mind in knowing that your issue will be covered.



At the end of the day, we are free to express and defend our opinions, but it seems that the topic has been exhausted. If anyone has anything new to add, please feel free - otherwise, this thread has run it's course and can be closed.
 
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