Extended Warranty Companies

[samven]

I had a YES warranty through Yamaha and thought I would be covered just like the original factory warranty but found out after I bought it that it excludes so many things as wear parts like individual gears in the transmission, virtually every sensor even though it had electronic coverage and all labor if even one uncovered part was found defective. It also had a little clause that specified that the part had to FAIL, if it had just worn out of spec it was not covered even though it may cause the engine or transmission to not run properly if they could show that there were any signs something was not right and you did not have it fixed on your dime before a failure nothing was covered. After that fiasco I swore off all after market warranties. They know after so many denials people give up and the few that dont get their policy refunded and cancelled.
Oh and like so many other warranty issues much depends on your mechanic and exactly how he phrases the failure. A good mechanic can get a lot of things covered if he wants to.

 

[DB_Cooper]

Service contract companies (extended warranty) are a bucket of snakes..indeed.

Technically there in no company that can "extend the warranty" as the warranty is part of the original purchase price/contract when the car is sold. It is hard to extend legally.

So instead the term is "service contract companies" as the thing you are buying is a contract to service/repair the car, under some precise conditions. It is not a warranty.

There are a couple of clues to help make a wise decision.

Use a service contract company (SCC) that is also an insurance company entity. Most SCCs are what is called a "risk retention group" and mostly financially unregulated. An insurance company that writes the SCC business will have regulatory oversight and will be required to have capital reserves for anticipated claims. If the company fails/goes broke the State where the company is domiciled will manage the claims from a reserve that all the insurance companies domiciled in that State pay in to. You will get your car repaired.

Most factory (like Ford's) SCCs are in fact underwritten policies from an insurance company. They charge more in premiums and the claims are efficiently and fairly adjudicated.

When buying,ask if the SCC company is an insurance policy or underwritten. If so, by whom?

The cost and benefits of SCCs are a personal choice. I had several new Alfa Romeos years ago. I bought service contracts from Alfa Romeo as they were branded as Alfa Romeo and underwritten by Hanover, AIRC. A couple of those contacts paid for themselves easily. The contacts were transferable too. That increased the resale price and buyers when I sold the cars.

 

[chemman]

I have had both the manufacturer's extended warranty and one from AAA (though not at the same time), and both covered what they promised to and did not cause any heartburn to either me or the repair facility. Next new vehicle I purchase will be covered by either a manufacturer's extended warranty or a AAA extended warranty (whichever on is least expensive) as well. I have either come out even or ahead with respect to the cost of the extended warranty.

 

[Dinoburner]

20 years ago tried out a used GMC Blazer, noticed noise in the transfer case in 4wd. The dealer said we know about it and will include an extended an extended wty with the sale. Just bring it back in a couple weeks and we will take care of it. Declined the deal.

 

[user52165]

The Devil is in the details. It's the "ifs, ands, and buts" that get you. The exclusions like audio, video, navigation, sensors, sunroofs, water leaks, etc are hidden in the fine print. What do they mean by "normal wear and tear"?

Buy a good car - the OP already has - and take care of it.

The normal probability is on your side.

 

[clinebarger]

As a mechanic.....I've seen tons of stuff denied by extended warranty outfits. I wouldn't waste the money.

 

[GZRider]

The only service contracts worth having is one underwritten and administered by the manufacturer. The third party ones are scams, nothing more. In the car industry they are called "gimmes" as in the customer is just giving you money. BMW extended service contacts, Infiniti Elite Protection Plans, Volvo VIP whatever Mercedes and Acura call there plans these days aren't scams per say they are gonna pay for the OEM parts and dealer labor to fix the vehicle correctly (minus $50-200 deductible and potentially some fluids and wear parts) or will give you the book value on the vehicle should the cost of repairs exceed it and you still get the car. However they cost $2500-4000+, and if you choose a non stupid one of their vehicles you can probably get away cheaper then that for 5 years of repairs.

 

[bachman]

I say go with your own piece of mind but agree you should consider the source so you are not left out in the cold if they go belly up.
Most dealers or financing back a plan of that sort so if you show encouragement at considering and then back off due to feeling giddy about it, they'll likely find a solid backer for you.
I sometimes use the warranty I know they try like heck to sell as means of negotiating. Often times, the $1500 to $3000 that can be leveraged on car deals can easily fit in a good warranty added in and still give you room to cut costs.

I've successfully used my 'extra warranty' on an 08 Mazda that had some issues and was either part of a known problem with those $8000 motors or was assumed to be. I was within the mileage limitation by 1,500 or so at 118,000 miles and they did over $2200 of work without blinking Part of that was $180 item not covered but they were nice about it and did it anyways. That part was a hydraulic fluid filled motor mount.

My VW was purchased at the time the 17's were going for $5000 off MSRP but the 2018 warranty's were better. I worked in a better than 2018 warranty by letting them work on me a few times getting the cost down a few tiers and providing 10 year / 100 k miles coverage.

* Just tell them;
"I don't keep a car for more than 2 to 3 years (even though you do or might keep it 6, 8 or 15 years) so there is no reason to get the warranty extended unless it's a stupid good deal. " That's when they know you might consider it and start talking about price and terms.

 

[Nick1994]

Well, I decided to go for it, but I went all out.

Got the max 75k mile Platinum warranty through the dealer last Saturday. I kinda screwed myself by just barely going past 60k miles as it raised the price. But overall, it's worth it for the piece of mind. $0 deductible too, so I'm covered until 135k miles.

I've got some work for them to do, I'm thinking it'll be paying for itself...

I'll stay updated with the problems I have over the life of the car.

 

[JTK]

Nick, did you happen to talk with some shops you'd like to use for service to see if they've dealt with this particular company before?

To me, that's more important than coverage or price.

That is a good price for the vehicle you have IMO. You could probably cash that warranty back in for a prorated rate if you don't use it?

The aftermarket package the Nissan dealer was trying to sell me with our used 2019 Pathfinder with ~24K miles on it was closer to $3K for 5yrs/100K total on the ODO. I couldn't get them much lower so I skipped it. The aftermarket company this big dealer chain uses is very good in terms of covering things, but you pay the price initially and potentially waste your cash.

 

[Andrew1972]

The biggest issues are:
• going out business
• company denying coverage due to lack of documentation of service on time or whatever reason they come up
• challenging to collect on
• repairs don't even approach $2000. Likely case. If your repairs are $2100 paid out you only were ahead $100 and risked $2000 . Not much of return for risk
• fine print of "bumper to bumper"

 

[Nick1994]

Originally Posted by JTK
Nick, did you happen to talk with some shops you'd like to use for service to see if they've dealt with this particular company before?

To me, that's more important than coverage or price.

That is a good price for the vehicle you have IMO. You could probably cash that warranty back in for a prorated rate if you don't use it?

The aftermarket package the Nissan dealer was trying to sell me with our used 2019 Pathfinder with ~24K miles on it was closer to $3K for 5yrs/100K total on the ODO. I couldn't get them much lower so I skipped it. The aftermarket company this big dealer chain uses is very good in terms of covering things, but you pay the price initially and potentially waste your cash.

It's an actual Hyundai warranty. But I can use it anywhere.

 

[JTK]

If Hyundai stores sell it, they tend to like working with it then.

Other than that, just because you can use it anywhere doesn't mean it works well.

 

[ABN_CBT_ENGR]

Originally Posted by DB_Cooper
Service contract companies (extended warranty) are a bucket of snakes..indeed.

Technically there in no company that can "extend the warranty" as the warranty is part of the original purchase price/contract when the car is sold. It is hard to extend legally.

So instead the term is "service contract companies" as the thing you are buying is a contract to service/repair the car, under some precise conditions. It is not a warranty.

There are a couple of clues to help make a wise decision.

Use a service contract company (SCC) that is also an insurance company entity. Most SCCs are what is called a "risk retention group" and mostly financially unregulated. An insurance company that writes the SCC business will have regulatory oversight and will be required to have capital reserves for anticipated claims. If the company fails/goes broke the State where the company is domiciled will manage the claims from a reserve that all the insurance companies domiciled in that State pay in to. You will get your car repaired.

Most factory (like Ford's) SCCs are in fact underwritten policies from an insurance company. They charge more in premiums and the claims are efficiently and fairly adjudicated.

When buying,ask if the SCC company is an insurance policy or underwritten. If so, by whom?

The cost and benefits of SCCs are a personal choice. I had several new Alfa Romeos years ago. I bought service contracts from Alfa Romeo as they were branded as Alfa Romeo and underwritten by Hanover, AIRC. A couple of those contacts paid for themselves easily. The contacts were transferable too. That increased the resale price and buyers when I sold the cars.


Ya'll pay close attention to every word written above and I'm going to add a little based on my experience litigating issues on industrial equipment ( same concept as a car but with a higher price tag)

Review the language because words like "full" have legal meanings (and can vary state to state)

Then look at the T&C very carefully for ( and ask and demand a DOCUMENTED answer and that the answerer is authorized as a representative capable of binding the offering company)

What is the proration criteria of components?

Are they a continuance or carry new warranty?

What is the dispute resolution process when a warranty is voided ( and who pays)

What are conditions of warranty maintenance ( many are illegal in most states where you are required to use a certain part or a particular provider but in some cases its legal is its more of a "service level agreement" weasel worded as a warranty or hidden in a clause within a warranty)

Theres a lot more but be careful because most "warranties" (even OEM ones) are not very valuable in most cases and they are ALL designed to protect the OEM, not the consumer.