Originally Posted by WhyMe
when i was shopping for a vehicle i bumped into a few of the dealers giving lifetime warranty with new vehicles. not just one, but quite a few speaking to them its an aftermarket warranty of course. So i am curious what the catch is. how can they give a lifetime warranty on a vehicle and make money.
There really is no "catch". But rather simple mathematics coupled with the law of averages. That's the way insurance works in regard to cost. An unlimited lifetime warranty will last until the cost of the said repair exceeds the Blue Book value of the vehicle. At that point they will cut you a check for that amount, and you're on your own.
At least that's the way Chrysler Max Care works. It's not much different than a health care plan, only for your car. There is a deductible. (I forget, but I think with Max Care it's $100.00 for each repair). Like I said, it's nothing more than health insurance for your car. Like personal health care, the insurance company knows the odds and the costs for everything. If the numbers are manageable enough, they'll write a lifetime time and mileage warranty. If not, they won't.
For example, on my 2015 Jeep Grand Cherokee, a Chrysler Max Care unlimited time and mileage warranty cost me $2,100.00 and change when I bought the car new. It would have been more later. My engine is the 5.7 HEMI V-8, which has been around a while, and has a relatively good track record repair wise. If I had purchased the Eco Diesel, (Which I would have liked to), they would not offer that warranty at any price. The odds would not have been in their favor. Diesels cost a fortune when they go down beyond the manufacturers warranty.
Back to health care. If you smoke and skydive, you'll pay more because your a bigger risk. It's what sent me packing from both BMW and Mercedes. No unlimited warranty is offered from anyone on either of those vehicles, regardless of model or engine combination. Same reason. Too high and frequent repair cost. 7 years was the max. (At least it was back in 2015 when I was shopping). For me that is nowhere near long enough.
I intend to keep my Jeep for a very long time. And I don't rack up a lot of miles. So unlimited time was very important to me. Jeep, coupled with Chrysler Max Care was the only one that offered lifetime time and mileage on a SUV that was in the ballpark of what I wanted.
Now there is "Car Shield". I don't know how long it lasts, or what it costs. But they are advertising it more than, "Flex Seal". As cars become more expensive and complicated, and people pay more for them and keep them longer, these type of long term warranties are only going to become more popular. Again, much like health care, it becomes too expensive of a risk for most people to go without it.