Third party extended warranties tend to have a worse reputation of weaseling out of paying, or company going out of business. Unlike the vehicle manufacturer, third party warranty companies have less of a name and reputation to have to protect.
I would definitely want the msnugfacturer’s warranty because o wouldn’t want hassles of the dealer trying to weasel our of paying.
I was able the make the dealer give me an extended warranty with the 1st car I ever bought. It had the windshield wiper motor due during 1st heavy rainstorm and then transmission went bad during initial warranty. Transmission went bad again just before warranty expired.
I bought an extended warranty with my next 2 cars. They would never negotiate on the price of the warranty for me. The 2nd car also needed transmission replacement. So far the 3rd car has not needed anything but normal servicing, but it’s only 2.5 years old.
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Just bought a new car with complex electronics and decided to decline the brand’s extended warranty. They kick in after the manufacturer’s original warranty expires and reading about how about 55% of people never use the extended coverage discouraged us; we are prepared to pay as we go (or ditch a lemon if we are unlucky), rather than pre-pay at least 4 years ahead on potential repairs. It appears there may be better deals available elsewhere if you decide you want an extended warranty. In some cases, the initial price quote may leave room for negotiating. I have not had dealers attempt to deny a warranty covered repair during the relevant time frame; perhaps we have been fortunate across the 4 brands of cars we have owned.
It was helpful to have researched in advance about the brand’s specific plans and the financial variables to consider. I hope someone who works in the industry will weigh in. Once DH was brought into a conference room at a dealership and saw sales associates names with a list of how many “extras” they had been able to tack on to their car sales, in descending order. Lots of pressure there.
YMMV; only one decision tree here and it is too soon to know how the numbers actually do play out.
If you have access to the Boston Globe online (so many free articles per month, I think), their consumer writer Sean Murphy examines Car Shield, which is blanketing the airwaves here in NE recently. Interesting take on the pros and cons.
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Repeating what I mentioned earlier- check with your auto insurance to see if they sell the auto brand’s extended warranty. Ours (USAA) did and the dealership matched their price, which was about half their initial quote.
We have never bought extended warranties, preferring the pay-as-you-go (or may it is pray as you go?) method. My husband did buy some prepaid service on his Audi. Perhaps in retirement we should consider it, to minimize unexpected expense spikes.
I would be willing to pay to STOP all the calls (on landland and cellphone) trying to sell us extended warranty. We drive older cars … 2013 and 2006, not sure what silly call lists we are on. (If we ever do buy extended warranty, it certainly will not be by cold-call telemarketers.)
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I will do that. Although I’ve already gotten what I think is a good price. Thank you!
I bought a BMW 335 GT in 2014 and I think paid extra to have the warranty go for 6 years. I absolutely love the car – including, I think, a sports package which meant in addition to tighter suspension some extremely comfortable seats). We just drove from Boston to Florida and back and it was more comfortable than flying (albeit quite a bit longer, since ShawWife and I like each other, it was just another way to spend a weekend together.).
When the car was almost 6 years old, it started smelling like fuel inside. There was an expensive problem with the fuel pump. Completely covered by the warranty.
I purchased an extended warranty from the dealer (Platinum level rather than bronze or gold) for 3 years/36K miles because I figured any BMW repair is likely to be expensive. There was a sale for $2441. Next time I will shop – didn’t really think about that as an option. On trip to Florida, I noticed that the heater was not really working well. Did great if defrosting but couldn’t push out volume if on a regular setting. Similarly, Max AC was fine but regular AC didn’t cool the car much. Brought it in. Problem with heater core, … . Anyway the repair would have been $3400 (can’t remember the numbers). I have a $200 deductible. BUT … the labor rate that the insurance company deems a reasonable rate is about 60% of what the BMW dealer charges. Hence my bill would end up being around $1400. While not entirely deceptive, I would have thought the warranty a dealer sold me would cover the labor costs at that dealer. This was never disclosed.
Over time, I will find an independent dealer who will work at the lower labor costs paid by the insurer.
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Thanks for this info. I will definitely read the fine print to make sure labor is covered at the dealer rate. Probably wouldn’t have thought to look for that. Wow. If I have even one $1500 repair in the 7 years in the extended warranty period then it will have been worth the $1800 to me honestly. That’s the cost with no deductible. I think with the $100 deductible it’s around $1600. But I figured I’d likely have at least two repairs in all that time.
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@MIP750, the contract itself doesn’t specify the labor rate. It just says it will pay reasonable amounts. So, I think you would have to ask both the warranty supplier and the dealer to compare reasonable with actual.
That said, I agree with you. The warranty probably still makes sense. The warranty covered roughly $1800 in this repair. I paid $2441 for the contract. So, as long as next repair is $841 or more (including the deductible), I have broken even. Highly likely. But, in the next pass, I will do the repair at a place with “reasonable” labor rates. I emailed the general manager of the dealer to ask a) why they would sell a warranty that doesn’t cover their labor rates and b) if they chose to, why they didn’t think it mandatory to disclose that. Let’s see if he answers.
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We bought the car - no extended warranty needed…a (low miles) 2019 Honda Fit, certified pre-owned, so there’s one bumper-to-bumper warranty year left plus the one additional provided by the “certification” (and the 7 year/100k powertrain warranty) - they put 4 new tires on it, and most of all, for a first car, it’s good for my (adult) Ds needs…
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I love certified used cars! You are still getting the extended warranty as part of the certification. And that long term peace of mind is what I’m after. 
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I wouldn’t want to own a BMW out of warranty. I had a 2004 BMW 3-series and bought the extended warranty before the original factory warranty expired. You can buy them from any dealer. It was, if I recall correctly, a warranty from BMW rather than a 3rd party insurer. During the regular warranty a few things needed repair that would have been expensive if not covered by warranty, so I figured the trend was likely to continue after the original warranty expired 
I was right, there were 2 repairs, so I ended up a ahead.
@shawbridge I purchased an extended warranty from the dealer (Platinum level rather than bronze or gold) for 3 years/36K miles I have a $200 deductible. BUT … the labor rate that the insurance company deems a reasonable rate is about 60% of what the BMW dealer charges.
This is a bit surprising. My warranty from BMW Financial Services covered service at the dealer, and even today the BMW website says “Covered repairs performed at an authorized BMW facility by trained BMW technicians” in https://www.bmwusa.com/content/dam/bmwusa/financial-services/protection-products/BMW_Extended_Service_Contract_Brochure.pdf I wonder if your dealer may have sold you a 3rd party warranty instead of the one from BMW?
Anyway, for a long time I’ve been leasing instead of buying. Even after owning a car like a BMW for 6-7 years its still worth a fair amount which makes it hard to sell to a private party (not everyone has $20K laying around), and the trade-in value is several thousand below private party value. I think of leasing as a pre-negotiated sale. The residual value of the car is based on a table instead of what the car salesman can convince you to accept. I’ve decided that buying makes the most sense for a car that I intend to hold pretty much forever.
@mikemac, interesting. The dealership called me to clarify. They had explained the issue differently to me. The flaw of the policy isn’t nearly so much the hourly wage. The differences may be $168 per hour versus $180 per hour or something like it. The differences are were more how many hours were allocated to replace the missing part and especially what tasks are needed. For example, they needed to flush the coolant because metal flakes from the heater were in the coolant. We wouldn’t have needed to flush the coolant for another 25K miles. But the policy declares that flushing coolant is maintenance and not covered by the policy.
The dealer has offered to do my next three oil changes for free. Oh, and to your point, this was a third party contract.
My plan is to hold through the end of the next warranty. I have low mileage. Maybe I should have leased but I vaguely recall that the interest rates were that favorable when I was buying.