I’m curious how many of you have purchased a car manufacturer’s extended warranty (for new car). I generally do not purchase those but after having my last two cars for 10 years + I am considering it. Also curious what you’d spend for this. We are looking at a 10 year/100k bumper to bumper no deductible for $1800 on a $40,000 car. We put about 10k/year on our cars. With all the technology on cars today, I can imagine many more things that could break/fail.
Instead if an extended warranty, we bought a prepaid service plan that covers all work done at 10,000 mile intervals. It was the same cost as the extended warranty and we would have been getting service done anyway.
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I never do either, but DH spent the money to extend the warranty this time. It only increased our monthly payment by around $40 and I won’t have to pay for an oil change until 40,000 miles. I usually put less than 10k/year on my cars. This is also the first time I’ve bought an American car, so I’m not sure what to expect for reliability.
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If the car is expected to be that unreliable, why buy that car in the first place?
Car reliability has generally been getting better over time.
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We drive our cars until they die so we always purchase the longest-term/fullest coverage warranty. Currently, we have 2017 Highlander Hybrid with Toyota’s ten year “platinum” (or whatever they call it) warranty. We don’t care what it costs.
We’ve bought an extended warranty a couple of times for Honda minivans. We bought Honda’s best extended warranty with no deductible. We also contacted several dealers and negotiated the price of the warranty, saving hundreds of dollars off the retail price. Both times, these warranties paid for themselves with a couple of relatively minor repairs. With one of them, Honda prorated us the cost of the warranty when the car was totaled in an accident (big surprise to us!) and the other time we transferred the warranty to the new owner when we sold the car. We did not buy it from the same dealer where we purchased the car. You generally do not have to buy the warranty at the same time you buy the car, but you do have a time limit, usually up until the manufacturer warranty runs out.
We checked into getting an extended warranty with our Subaru (most recent new car purchase) but weren’t as successful negotiating price and ended up not buying one.
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We haven’t purchased extended warranties on our new cars, or cell phones, kitchen appliances, or home maintenance. They’re extremely profitable to those who sell them, because they don’t pay off for most consumers who purchase them. Or they cut corners when there is a claim (as I’ve experienced with home warranties, maybe not as much of an issue with auto). I prefer to save the $1800, and all the other insurance premiums I’ve been offered, and fix the items that break or need maintenance. I can’t recall ever needing to do a repair on our vehicles during the first several years, only the regular maintenance items. We drive a Honda minivan and Toyota SUV.
I do however keep good insurance coverage on our vehicles. I almost dropped comprehensive coverage on my son’s 2005 SUV but decided to keep it since he’s a new driver and parks on the driveway. We get a fair number of hail storms around here. 2 weeks ago his catalytic converter was stolen while he was at work and the $3100 repair was covered 100% by insurance. That’s where I’d pay for the extra coverage and peace of mind.
Lots of people are committed to buying American. Also new cars have many electronic features that are expensive to repair.
I also think that the American car manufacturers have come a long way in reliability. My mom has an older Ford and she has had great luck with it.
We bought a Volkswagen Passat. Consumers Reports says that it’s not a very reliable car. We got a 72,000 mile warranty with it. Haven’t had any trouble so far. Took a chance and have been very happy
The Cost of Car Ownership Over Time - Consumer Reports shows some estimates of repair costs over a year for 5 and 10 year old vehicles by brand.
At the 10 year mark, American brands Lincoln, Ford, Chevrolet, GMC, and Buick are clustered at the bottom (lower cost), along with some foreign brands Chrysler, Ram, Toyota, and Mini. Cadillac is the most expensive American brand, but is much less expensive at the 10 year mark than BMW, Porsche, Volvo, Audi, and Mercedes-Benz. (American brand Tesla is not listed.)
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In 1978, I bought my very first brand new car, a Honda Civic. I decided to buy the extended warranty. At the time, new cars only had a very short warranty…maybe a couple of years.
Well…my transmission failed on that car. It was a third party vendor at the time and it was a real headache getting the payments and the work done. But they paid for a rental car for me the whole time (it took over 2 months to get this resolved, and paid for). It was such a screwed up process…but the work did get done. It was so screwed up that the company never billed me for the deductible.
My last couple of cars have had bumper to bumper service warranties until 60,000 miles. Included everything but tires and wiper blades. We bought a prepaid service plan for our newest car (which DH uses) that takes us to 80,000 miles. No service costs at all until then. It cost us about $3000 but we crunched the numbers before we purchased, and it was not any more than paying out of pocket since it also included brakes and other bigger repairs and service.
My car…the dealer had to drop a new engine into it at 62,000 (yep…right after that warranty ran out). But…the engine and anything related to it are warranted fully as long as I own the car!
Cars now have much longer warranties than in 1978 when I bought my last extended warranty.
I guess it depends on the car. We’ve never had to buy an extended warrantee on our cars. But we buy Toyota. If it’s a used car, then YES. You don’t know where that thing has been and Carfax isn’t always accurate. We got burned for that that. Luckily, we were able to break even on a trade-in for a new car.
I’d say, it’s worth spending an extra $1,800. Fancy computer equipment is always the first to fail and it’s always the most expensive to replace.
Thanks everyone for all this input. We have never purchased an extended warranty before, but boy do we like having the peace of mind with a new car warranty (which in our experience have been about 3 years/36k). I felt that the $1800 was probably worth it, imagining that over a 7 year period we’d likely have at least $257 of repairs each year. Our last car was a minivan and so many things started failing around year 7: slider doors, ignition glitches, O2 sensor, etc. very frustrating. Seems like we were always facing $500+ of repairs. I feel like $257/year is sort of like insurance (to respond to suggestion of using insurance). So many things go wrong that just aren’t covered by insurance anyway. @coolguy40 The computer system is definitely one of the things I worry about. FWIW, the car is a Subaru.
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Car computers typically do not fail. But their software can have bugs. Software bugs would only be fixable by reflashing the software, if a newer version of the software with the fix exists (which is not always the case).
Know that the price of the extended warranty is negotiable. We have never bought one until the last car. My husband bought it for his Subaru hybrid Crosstrek. The end price was half what the salesman first presented.
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Yes! I called around and got prices ranging from $1800-2900. Ridiculous.
Only once did we buy an extended warranty, but it was because the car had been a dealer “loaner” or managers car or something (it was the color I wanted so… ok) and it was an American car. We have USAA insurance, and they offered the same coverage that the dealership had (from the car company) but at a much, MUCH lower rate. The dealership quickly matched the USAA price after confirming it was the identical coverage they were selling.
We bought an extended warranty from the dealer on our Toyota Prius prime 2+ years ago. It was for 10 years or 100k miles, whichever comes first. I believe it was about $2k and all the work is done at the dealer and they do paperwork and get reimbursed from the warranty folks.
The car has a lot of electronics and I can see sone of them potentially linking out before 10 years are up. So far it has been trouble free, but there’s another 8 years. We keep cars until they die. H still has a 1998 Volvo!
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We ran into that while shopping around for my new car. We drove out to a place about 45 min from where we live b/c they had an amazing deal on a new car that was advertised as having 4 miles on it. We get there and I right away get a feeling it’s all about to go sideways when we ask to see the car. There was much scurrying around and back and forths… yeah, car wasn’t there. Apparently they have an “agreement” w/ coaches at Carolina. They give them cars for free. This car hadn’t been seen in early January and they had no idea how many miles were on it. We walked RIGHT on out of there and went to a different (competitor) dealership. I’m not at all against buying a loaner car, but it better be advertised as such!
How does one go about negotiating a better price on an extended warranty? My (adult) D is looking to buy her first ever car (she’s always lived where there’s amazing public transportation so never needed or even wanted a car) - she’s looking at 2-4 year old cars (I assume lease returns) and we’ve talked about extended warranties…today she’s (finally!) doing her first test drive, so the field does seem to be narrowing…
It’s easiest to buy an extended warranty when the car is still covered by the manufacturers warranty.
If it were me I would tell the dealer I wanted the extended warranty and negotiate the total out the door price of the car including the warranty. If the car is still covered by the manufacturers warranty I would make sure she is eligible to purchase an extended warranty from the manufacturer and then check online and also contact a bunch of dealers for the best price for the length and coverage she wants.
Some dealers offer third party extended warranties. I’ve never purchased one and don’t know much about them. Maybe someone else can help with that side of things.