Automotive Warranties - any good?
 

Hi everyone,

I'm constantly seeing all these ads on TV for automotive warranties - "I saved $8700 on repairs!!" ... always *sounds* good, but has anyone had any true experience with them? Good? Bad? Scam?

Thanks!

Biggest scam in the automobile business, but people keep buying them.

Our company has 17 dealerships and we have our own warranty company (almost all dealers do). It's the highest profit item we sell. We probably make 75%+ profit, maybe more. It's essentially, over-priced insurance.

Some of the manufacturers (particularly of high line cars) have a "certified used cars" which come with an extended warranty and they're a little bit better deal, with an expensive vehicle.

In general, there are a 1000 reasons they're not a good investment and the only positive, is if you happen to be the 1 person out of a 100, who gets to benefit from one.

SCAM !!!!

RUN :wave::wave:

Remember too....they don’t use manufacturer parts either. Mostly after market, inferior stuff. The marketing is towards the fairly older, higher mileage vehicles. Then you have to make sure your mechanic is even in the program. As @BrianL99 stated, owners with new dealer purchases....already have a built in warranty. So extended ones are the focus there. If you can part with a minimum of $100 a month (that’s the lowest coverage), read the fine print on what is actually covered and what isn’t. The commercials you are referring to use paid ‘actors’....unless you really believe Ice T is so destitute (net worth 65M) that he needs this type of ‘coverage’!

I'm not in the operational side any more and it may have changed, but when all the auto dealers originally got into the "extended warranty" business, we had to ship the money to "off shore banks" and keep it there. That should give you a clue.

.....and they wonder where the ‘pols’ get their ideas from! (or vice versa)

That's funny. They never sound good to me. They sound like a scam. I would never pay money for any warranty.

If you buy a quality car why would you need it?

A ripp off !!

My car came with a manufacturer 5 year bumper to bumper warranty. I was surprised when they replaced my battery at about 4 and a half years, they also replaced a headlight all at no cost. I expect I will need a battery every 5 years maybe a few lamps, but if I keep up with maintenance I should be good without any extra warranty.

don't waste your $$. i actually purchased one of these things years ago, & wouldn't you know they didn't cover a heck of a lot. repairs were still out of pocket, even the major ones they claim to cover. when my intake manifold cracked, it was crickets for miles around! something about the year & make of the car, is the nonsense i was told, as to why it wasn't covered. SCAM

Money maker for the dealer.

When you buy a car and you negotiate a price when you get to the price you are satisfied with tell them to throw in the extended warranty and you got a deal. It works every time, I have never had to use the extended warranties but I got them free.

I always buy the bumper-to-bumper 100k miles 7-years extended waranty when I buy a used car from a dealer.
If you buy it from a dealer any dealer of that make will honor it. Bought an Outback 2009 with 9k miles on it in 2011, in 2017 automatic transmission went and it felt good walking into the service center saying "it's under warranty."
Like all insurance you'll probably never need it, but I sleep better at night. They have gotten more expensive recently.

About same level as dental insurance. Which. IMO nearly worthless.

thx for your insight, i'll remember that one :pray:

Warranties are certainly a good deal for whoever sells them.

Insure lives and homes and car insurance in case of an accident. In other words insure what can give you a horrendous loss.

When I am asked if I want insurance on an item I just bought for $ 15 we know the idea of insurance has run amuck

It is becoming a little different with modern autos with are basically computers on wheels. Many of the electronic components are expensive to replace. Depending on price, an extended warranty directly from the manufacturer may have value. Warranties from dealers and other 3rd parties are worthless.

That is simply untrue. If it's a manufacturers warranty, probably. Most 100,000 mile warranties are not manufacturers warrantees. Dealers make way more money selling their own warrantees and they have significantly more stringent requirements as to who does the work.

So, what is the truth? I have never been offered an extended warranty from an auto manufacturer. Do they actually sell warranties directly to the retail customer without involvement by the dealer? How do you buy a warranty directly from the manufacturer, and how do you know that the warranty is from the manufacturer and not from a third party?

When I bought my Hyundai Genesis, back in 2011, I bought the 100,000 bumper to bumper extended warranty ($1,250). The car came with a 100,000 mile power train warranty, but only the typical 30,000/3 year warranty on the rest.

At about 50K miles, the Navigation system took a dump and they replaced it for $50. Without the warranty, it was a $3750 repair. There were a few other smaller things that they covered along the way so I felt it was well worth the price (about $5K worth of work in total)...

But "Darlings" how can you go wrong!!!!!!! Hahahaha

When I bought my new Dodge Challenger I got a lifetime bumper to bumper warranty through Chrysler. From a forum a dealership in Hickory NC was selling them at the time for way less than any the dealership I bought my car at. At the time I was planning on keeping the car until I could no longer drive. I figured everyone says Dodge cars have issues and as long as I was planning on keeping it it would be a good move. In 11 years I have not had to use it oddly enough.

We also bought a used 2016 Civic at a Honda dealership. Since this car had so much electronics I opted for the Allstate 5 year warranty. Good thing we did. The AC died 3 times and the steering went wacky. If we would not have bought that warranty it would have cost us $7,000.

I AM very leary of the TV ads for extended warranties yes. I never bought a warranty before these two cars. However, with all of the new technology in todays cars I wonder if it is time to get a warranty. Those radio/backup camera screen things are $4,000 plus. If it goes you have to replace it as it controls so many things. The one in our Civic goes bonkers once in a while now. All of this new camera stuff in the front and side mirrors are going to be very expensive to replace.

Run!!!! Rip-off!

Specific to the OP question....the TV ads associated with that segment of auto warranties, are the issue. As previously stated by many of us. Many are confusing dealer products as the same as whats been proposed...they are not. One 'covers' site unseen, higher mileage, older model vehicles vs in house new/certified preowned stock that has a totally different business model. Why anyone would attempt to buy this type of 'coverage' for a clunker when that same money couldve been used for a better, more reliable purchase, is beyond me

These "Car Shield" TV commercials often feature a celebrity, with a net worth of more than $10 million, claiming that they have Car Shield. An extended auto warranty only kicks in after the manufacturer warranty expires. Do you really think that these wealthy celebrities would even keep a car that long?

Hmmm....seems awfully similar to post #4

Car Warranty
 

In 2020 I bought a 2012 BMW x3 35i 32,000 miles, $20,000. CarMax offered a 5 yr warranty or 75,000 miles $2300. Covers everything except brakes, tires, oil changes. $100 deductible. They cruise control wasn’t working, replaced free within 30 days-Car Max. Within 1-2 years, seals were replaced due to some oil leaks. Just that alone, more than paid me back. I have 1 year left, and only at 55,000 miles. For a higher end car, I feel it was worth the money.Will be self insuring when this warranty runs out.

My son bought one thru the dealership when he bought a used car. Transmission went out after 1 month, he was told they would not cover it because it was so soon after he bought it. They said they would cover 50% just to be nice. I told him to threaten to sue fpr misrepresentation on the used car, I'm sure they knew it had transmission problems, and they sold him the warranty, knowing they would not honor it. At that, they fixed the transmission for free and refunded him the money he paid for the extended warranty. It's a scam.
Car is fine now 1 year later.

Wow what a bunch of crooks

There's an old saying ....."A fool and his money are soon parted".

What a scam. All the clowns in the ads don’t tell you the true cost of the repair. Sure the repair might be $5000 after paying for 3 years, but since you might be paying $200 a month for this bogus extended warranty, you are paying $2400 each year and after 3 years you would have paid $7200 for the insurance, so that $5000 repair after 3 years really cost you $7200.
The repairs they cover do not allow you to take it to any mechanic you choose and they will replace parts with remanufactured parts.

I have purchased 2 new cars almost every 2 or 3 years and only once did I buy an extended warranty because of 2 things:
I thought I would keep this car longer; and the dealer stated that if I sold the car or never use the extended warranty, they will refund the full cost of the extended warranty. I kept the car for 1 year after the original warranty ended, and never used the extended dealers warranty, so they gave me my money back

You should share the dealerships info

With that kind of sales model...he’s probably living in a travel trailer behind the dealership!

Those warranties, again, not the TV ones ....are where most dealerships make their most profits. So your story, if true, is clearly an anomaly

They’re expensive, & these warranty’s usually get to you when car is almost new. If they want warranty a car they should offer them about the time you start having issues, not when they’re barely out of factory warranty. If you’re a single women maybe but as a annual warranty I think they’re expensive!

Boy you are right about that. I bought a vehicle in 2017 which I still have. Because of all the electronics on it I figured it might be a good idea to get an extended warranty that will cover ALL those electronics. The dealer wanted $2400 for the 10-year Platinum plan (I Keep vehicles a long time). In my experience I would never buy anything but the Manufactures plan. I shopped elsewhere and found a small dealer up in Michigan selling the exact same plan for $1000. I called the manufacturer to confirm I would be covered if I bought it from this dealer and they said yes, they said dealers can make their own pricing. My advice is if you want an extended warranty, buy only the manufactures plan and SHOP AROUND!!

Seven or so years later have you had problems with the electronics? Bought my camry 3 years ago and dealer tried to sell me warranty on the electronics. I declined. No problems but wonder as the car gets older what might happen.

So if I’m reading your post correctly, the dealer is trying to sell you an electronics specific warranty product?
Not too much collusion there, huh!

Some of the cars listed by other posters, BMW, Subaru and Dodge, yes get a warranty, LOL. Somebody posted about a 2017 Ford Escape the other day the AC crapped out, add that one to your extended warranty list.

The finance guy once I disappointed him about not financing the car, tried to sell me about 7 different warranties.

After about 5 turndowns, he tried some hard selling which got him nowhere. Asked him perhaps I should not buy the car if the quality is so bad the buyer would need all of these warranties.

He stopped after that.

That story is either leaving out some salient facts, or the Dealer was running a scam with his 3rd Party Warranty Co. Probably not actually putting the warranties on a car and keeping all the cash. If a claim comes in (which is seldom in the 1st year or so), he was then back-dating paperwork and then sending in the premium.

No one sells Insurance and then gives the money back, if you don't get sick or die. Not a sustainable business model.