bills_fan Posted May 19, 2009 Share Posted May 19, 2009 I drive a 2005 Jeep Wrangler and received a notice about extending the bumper-to-bumper factory warranty. My Wrangler is a low mileage vehicle with about 20k miles. The offer was to extend the factory warranty for an additional 6 years or 60k miles for about $3000. There would be a $100 deductible on the warranty. I do plan to keep my Wrangler for at least that long, if not longer. I have never had any experience with extending the warranty on the car. I was wondering if it was worth it to do this type of warranty or if anyone had experiences they wanted to share. Link to comment Share on other sites More sharing options...
kegtapr Posted May 19, 2009 Share Posted May 19, 2009 I drive a 2005 Jeep Wrangler and received a notice about extending the bumper-to-bumper factory warranty. My Wrangler is a low mileage vehicle with about 20k miles. The offer was to extend the factory warranty for an additional 6 years or 60k miles for about $3000. There would be a $100 deductible on the warranty. I do plan to keep my Wrangler for at least that long, if not longer. I have never had any experience with extending the warranty on the car. I was wondering if it was worth it to do this type of warranty or if anyone had experiences they wanted to share. Do you really think you'll have $3000 in repairs in the next 6 years? Even with a Jeep, I wouldn't bet that amount of money on it. Think about it, even if the tranny fails you still haven't recouped the warrenty cost. Link to comment Share on other sites More sharing options...
bills_fan Posted May 19, 2009 Author Share Posted May 19, 2009 Do you really think you'll have $3000 in repairs in the next 6 years? Even with a Jeep, I wouldn't bet that amount of money on it. Think about it, even if the tranny fails you still haven't recouped the warrenty cost. I confess to ignorance on the subject. I really have no idea what it would cost to fix something like that. Link to comment Share on other sites More sharing options...
kegtapr Posted May 19, 2009 Share Posted May 19, 2009 I confess to ignorance on the subject. I really have no idea what it would cost to fix something like that. Just think about it this way, why would they sell an extended warranty if they didn't make money off of it? They are cash cows. Sure, maybe 5% of people who buy them get a full return but are you willing to invest that much money with those odds? If you are, I'd go to the casino and put it on a hand of blackjack. Plus, you have to look at the exclusions. Most of the normal wear and tear items won't be covered which is the majority of what you would need to replace. It's no where near worth it in my book, but some people like the peace of mind it provides. Link to comment Share on other sites More sharing options...
GG Posted May 19, 2009 Share Posted May 19, 2009 Sounds a bit high. Dealer quote for extended warranty on my '05 Pilot (30K miles) was $1,500, then they dropped it down to $900. Warranty is provided by Zurich Financial. $3K sounds a bit high, but maybe they're pricing in the Chrysler factor. Sounds like the reinsurers may not want to do business with Chrysler Link to comment Share on other sites More sharing options...
BuffaloBill Posted May 19, 2009 Share Posted May 19, 2009 Sounds a bit high. Dealer quote for extended warranty on my '05 Pilot (30K miles) was $1,500, then they dropped it down to $900. Warranty is provided by Zurich Financial. $3K sounds a bit high, but maybe they're pricing in the Chrysler factor. Sounds like the reinsurers may not want to do business with Chrysler I would agree - interesting because I was aksing about an warranty today on the wife's 2005 SLK. I have it in the shop again - fortunately this repair is covered under the warranty the dealer threw in when I bought the car. I asked about extending it and they dropped a grand off the price without me even asking. 4 years of coverage - another 50K in miles for $2,195. Given the crappy repair record with the car so far I am likely to take it. BTW if you have not figured it out - I would not recommend a Mercedes to anyone. It is a fun car to drive but the quality is for crap. If I do buy the warranty the car gets sold about three months before it runs out and I go with an Acura, Infinity or Lexus for her next car. The Japs just build better cars. Link to comment Share on other sites More sharing options...
bills_fan Posted May 19, 2009 Author Share Posted May 19, 2009 Sounds a bit high. Dealer quote for extended warranty on my '05 Pilot (30K miles) was $1,500, then they dropped it down to $900. Warranty is provided by Zurich Financial. $3K sounds a bit high, but maybe they're pricing in the Chrysler factor. Sounds like the reinsurers may not want to do business with Chrysler Thanks. I will look into something by Zurich. It did seem like a lot of money for a warranty. Link to comment Share on other sites More sharing options...
ExiledInIllinois Posted May 20, 2009 Share Posted May 20, 2009 Do you really think you'll have $3000 in repairs in the next 6 years? Even with a Jeep, I wouldn't bet that amount of money on it. Think about it, even if the tranny fails you still haven't recouped the warrenty cost. Bingo! That is a ton of money! I drive a 2006. bills_fan: just bank that 3k... You can almost get a one whole new axle assembly and an engine for that much! Link to comment Share on other sites More sharing options...
ExiledInIllinois Posted May 20, 2009 Share Posted May 20, 2009 Sounds a bit high. Dealer quote for extended warranty on my '05 Pilot (30K miles) was $1,500, then they dropped it down to $900. Warranty is provided by Zurich Financial. $3K sounds a bit high, but maybe they're pricing in the Chrysler factor. Sounds like the reinsurers may not want to do business with Chrysler I drive a 2006 Jeep TJ and when I bought it, I only spent under a grand on the extended warranty (factory) to take it to 75K. I may have lost money... But it wasn't a whole ton to take it from 36k to 75k... I am at almost 36k now and not a lick of a problem. With the Jeep, most things I can do myself or can get parts real cheap (they made so many through the years and stayed relatively consistent with design for almost 60 years till the 2007 model year). I mean, you can basically build any model year straight up dating back to the late 1940's... Really, if I want to build a 1970's CJ, ALL the parts are there readily available... From frame to tub to engine to owner's manual! All that may have changed in 2007 with the new JK... But, I suspect not because that Jeep culture is hard to get rid of and the AFTERMARKET products are such a big industry. Let me know if you ever see a classic Jeep type vehicle in a junk yard... I bet it gets snapped up fast. Believe it or not they don't depreciate like other vehicles. Something can really be said about standardization and Jeep really hit the nail on the head the last 60+ years... To bad people are their own worst enemies! They always want something different too! Link to comment Share on other sites More sharing options...
ExiledInIllinois Posted May 20, 2009 Share Posted May 20, 2009 ......There is an epidemic of extended automotive warranty scams out there right now.A number of them are based in the St. Louis area. You may want to Google the subject. Buyer beware! http://today.msnbc.msn.com/id/23147777/ That is what I suspected. 3K And if people accept that, math being taught in this country is beyond repair. Bank the 3k (+deductible) and wait for the breakdown (if even such a major one comes!). Link to comment Share on other sites More sharing options...
Gordio Posted May 20, 2009 Share Posted May 20, 2009 I drive a 2005 Jeep Wrangler and received a notice about extending the bumper-to-bumper factory warranty. My Wrangler is a low mileage vehicle with about 20k miles. The offer was to extend the factory warranty for an additional 6 years or 60k miles for about $3000. There would be a $100 deductible on the warranty. I do plan to keep my Wrangler for at least that long, if not longer. I have never had any experience with extending the warranty on the car. I was wondering if it was worth it to do this type of warranty or if anyone had experiences they wanted to share. When I first started at the bank 11 years ago I used to do alot of work with car dealer floor plans & I could tell you this, there number 1 cash cow at a dealership is the extended warranties. They are usually set @ a 200% mark up & they make a ton of profit off of them. In other word, in probably 95% of the cases they are not worth it. Link to comment Share on other sites More sharing options...
Fezmid Posted May 20, 2009 Share Posted May 20, 2009 When I bought my '99 Camry, I wasn't planning on getting the extended warranty. After saying no a ton of times, and the dealer constantly lowering the price, he eventually went down to $500 with no deductable to up the warranty to 100,000 miles. I thought it was a good deal... Turns out it was a waste of money, as my car never had a problem. But $3000 sounds extremely high. Link to comment Share on other sites More sharing options...
erynthered Posted May 20, 2009 Share Posted May 20, 2009 When I first started at the bank 11 years ago I used to do alot of work with car dealer floor plans & I could tell you this, there number 1 cash cow at a dealership is the extended warranties. They are usually set @ a 200% mark up & they make a ton of profit off of them. In other word, in probably 95% of the cases they are not worth it. I dont think so. Link to comment Share on other sites More sharing options...
Steely Dan Posted May 20, 2009 Share Posted May 20, 2009 I drive a 2005 Jeep Wrangler and received a notice about extending the bumper-to-bumper factory warranty. My Wrangler is a low mileage vehicle with about 20k miles. The offer was to extend the factory warranty for an additional 6 years or 60k miles for about $3000. There would be a $100 deductible on the warranty. I do plan to keep my Wrangler for at least that long, if not longer. I have never had any experience with extending the warranty on the car. I was wondering if it was worth it to do this type of warranty or if anyone had experiences they wanted to share. Not in a billion years even if they offered to cover it to 100,000 miles. The repairs that will be covered probably won't even scratch the surface of the $3,000 dollars. JMO Just think about it this way, why would they sell an extended warranty if they didn't make money off of it? They are cash cows. Sure, maybe 5% of people who buy them get a full return but are you willing to invest that much money with those odds? If you are, I'd go to the casino and put it on a hand of blackjack. Plus, you have to look at the exclusions. Most of the normal wear and tear items won't be covered which is the majority of what you would need to replace. It's no where near worth it in my book, but some people like the peace of mind it provides. They can also weasel out of repairs for many reasons. That is what I suspected. 3K And if people accept that, math being taught in this country is beyond repair. Bank the 3k (+deductible) and wait for the breakdown (if even such a major one comes!). Take the 3k and divide it into $1,000 dollar pieces. Open three CD accounts and stagger them as 3 month, 6 month and 1 year. Keep rolling them over so that you are only three months away, at worst, to pay for repairs. When you get rid of the car you'll have a decent down payment. JMO Link to comment Share on other sites More sharing options...
Fezmid Posted May 20, 2009 Share Posted May 20, 2009 I dont think so. I do. Extended warranties are a cash cow for all companies - why do you think they get pushed so hard? Almost 100% pure profit. They're obviously not cost effective for the customer, otherwise companies would stop offering them! They're in business to make money, and if they aren't making money, then they won't offer the service. Link to comment Share on other sites More sharing options...
erynthered Posted May 20, 2009 Share Posted May 20, 2009 I do. Extended warranties are a cash cow for all companies - why do you think they get pushed so hard? Almost 100% pure profit. They're obviously not cost effective for the customer, otherwise companies would stop offering them! They're in business to make money, and if they aren't making money, then they won't offer the service. There are 5 profit centers in a car dealership, extended warranty's fall into the F&I profit center. Extended warranty penetration is somewhere around 25 to 35% I believe. So sorry, not the biggest cash cow at dealerships. Now, factory warranty claims? Thats huge for service departments. Link to comment Share on other sites More sharing options...
erynthered Posted May 20, 2009 Share Posted May 20, 2009 http://www.dealermark.com/index.php?Itemid...t&task=view Old article, but pretty good none the less. Link to comment Share on other sites More sharing options...
Arkady Renko Posted May 20, 2009 Share Posted May 20, 2009 I do. Extended warranties are a cash cow for all companies - why do you think they get pushed so hard? Almost 100% pure profit. They're obviously not cost effective for the customer, otherwise companies would stop offering them! They're in business to make money, and if they aren't making money, then they won't offer the service. While I agree that extended warranties usually are not worth it, I think your logic is wrong. Just because they make money for the companies does not mean that they are a bad deal. Insurance of various types make money for insurance companies, but insurance often makes sense not only because the law often requires such insurance but also because people are risk adverse while the insurance companies can be risk neutral. Link to comment Share on other sites More sharing options...
Steely Dan Posted May 20, 2009 Share Posted May 20, 2009 While I agree that extended warranties usually are not worth it, I think your logic is wrong. Just because they make money for the companies does not mean that they are a bad deal. Insurance of various types make money for insurance companies, but insurance often makes sense not only because the law often requires such insurance but also because people are risk adverse while the insurance companies can be risk neutral. I'd have the cat PUNCH! you if any of that made any real sense. Link to comment Share on other sites More sharing options...
bills_fan Posted May 20, 2009 Author Share Posted May 20, 2009 Thanks for the feedback guys. Not having experience in this area, its nice to hear different views. Link to comment Share on other sites More sharing options...
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