Automobile extended warranties/service agreements

[Aaron Rosenthal]

I got the call today that the Ford Maverick pickup I ordered last October will be ready for pickup tomorrow.
Finance is arranged, my copies of the documentation confirming the price etc. are printed and in hand - not that any car dealer would be dishonest .........
I was asked about if I wanted an extended warranty and service agreement. I normally never take extended agreements for electronics, but I'm wondering about whether there's any consensus regarding cars.
To be clear, I bought my vehicle from a dealer about 50Km away, so I don't know if a service agreement would work unless a local dealer could take it over, but extended warranties might be worth it. I don't know.

[Stan Calow]

My SOP has been no to extended warranties as I believe anything seriously wrong will show up before the factory warranty expires. Especially no if they are "dealer" or third-party warranties. My wife purchased one and the third-party company just went out of business with no recourse.

Except for tire warranties. We've had a lot of flats and other damage occur while the tires were still new.

[Bill George]

My SOP has been no to extended warranties as I believe anything seriously wrong will show up before the factory warranty expires. Especially no if they are "dealer" or third-party warranties. My wife purchased one and the third-party company just went out of business with no recourse.

Except for tire warranties. We've had a lot of flats and other damage occur while the tires were still new.

Things have changed. Now if if you have a electronics issue it could cost $1000s to repair. Far more than a straight forward engine repair. Transmissions can cost $4000 plus to replace. You can purchase $100 or so deductible instead of a zero deductible cheaper, but do ask questions of your dealer. We tend to keep our cars for a long time and buy some sort of warranty. Don’t buy third party ones!

[Jack Frederick]

Tire warranty may be worthwhile. A friend who is third gen independent tires shop says the electrics are all hi-torque cars and all are having premature tire wear. My daughters Audi E-Tron needed four new tires at 8000 mi. She drives on a lot of dirt roads in the real estate business. The tires were shedding chunks of rubber. Audi said, “Well, these tires aren’t for dirt/gravel roads” and denied coverage on her tire warranty. This was of course not specified at the time of sale. Audi also said, change to a different tire and you void your warranty. The dealer came through for her. She loves the car and it is running cheaply, but these things don’t carry inexpensive rubber, and every 8000 mi?

[Alan Rutherford]

I collected twice on vehicle extended warranties. My wife, before we were married, bought one with her '90-something Blazer and it saved us $1000+ on a transmission repair. I was able to transfer the warranty on a Caravan van I bought used about 25 years ago and it paid for motor mounts. But I wouldn't buy one myself. I'd say don't do it unless knowing you've limited your risk is worth paying for something you probably won't use. If those things weren't money-makers for the people selling them, they woudn't.

[Bill Howatt]

... I'd say don't do it unless knowing you've limited your risk is worth paying for something you probably won't use. If those things weren't money-makers for the people selling them, they woudn't.

Pretty well sums up my thought on the subject, especially the last line. I think you have to consider why you are thinking of buying one, to save money on repairs or to bail you out if a large expense would overwhelm you. In my case, at my advanced age, I'll gamble on the "save money or repairs" and don't have to worry about a few $K expense putting me out in the street even if it is unpleasant.
However, as the ad used to say, "this is not your grandfather's car". The electronics can be a big expense. Friend had to replace the radio in his RAM and it cost $1K+. He could have gone without a radio but it was the electronic brain behind the backup camera and some other stuff apparently.

[Jim Becker]

Due to the tech...I'm a yes, but ONLY for a manufacturer backed extended service contract. (what folks, including many sellers, call "extended warranties") Just say no to third party contracts! And don't take the first price you are given. Negotiate the price. Now things might be different in Canada, but I always tell US buyers to shop multiple dealers for the contract to get the best price. There are some that will sell for just over cost and others that will inflate the cost beyond the "MSRP". (Florida residents, unfortunately, must pay MSRP because of state insurance laws)

[Mike Mason]

Tire warranty may be worthwhile. A friend who is third gen independent tires shop says the electrics are all hi-torque cars and all are having premature tire wear. My daughters Audi E-Tron needed four new tires at 8000 mi. She drives on a lot of dirt roads in the real estate business. The tires were shedding chunks of rubber. Audi said, “Well, these tires aren’t for dirt/gravel roads” and denied coverage on her tire warranty. This was of course not specified at the time of sale. Audi also said, change to a different tire and you void your warranty. The dealer came through for her. She loves the car and it is running cheaply, but these things don’t carry inexpensive rubber, and every 8000 mi?

Do these extended warranties also cover the replacement batteries it will someday need?

I've never had any extended warranty; the person selling it obviously does so to make more money in premiums than they pay out. I guess it's a matter of how willing and able you are to cover a major expense if it occurs, but over the course of their lifetime, the average person would have been better off financially without them.

Having said that, something really catastrophic, such as a serious medical issue, house fire, car accident (think liability) all need to be covered by insurance. However, if I have to pay out a few thousand dollars, it's not going to bankrupt me, so it's better on average to avoid such warranties. That's what most consumer magazines will also tell you.

[George Yetka]

I do them on GM products because I had a run of them failing at 100,001 miles. Also they backed down to 60k

[Bill George]

As far as “someone is making money off extended warranty's” can’t you say that about all Insurance.? As Jim said buy the factory warranty not the Dealer or the ones you get in the Mail.
I buy because we keep our cars and trucks for a long time.

[Roger Feeley]

We’ve never lost money on an extended car warranty. We’ve had them on our last three cars. We buy at CarMax and get the longest lasting lowest deductible warranty we can. That ran out on our current car during the pandemic. Normally we would have gotten a new (to us) car but it wasn’t a good time to buy a car. So I consulted with our mechanic and got another 5 years from a company they liked. When that runs out, we will probably change cars.

we have extended warranties on our appliances too and made money.

[Bill Howatt]

As far as “someone is making money off extended warranty's” can’t you say that about all Insurance.? ...

Yes, that's the way it works but it also shows that the odds are on their side or else they wouldn't do it like the insurance companies getting out of the natural disaster areas.

[Jim Becker]

Do these extended warranties also cover the replacement batteries it will someday need?

One would have to read the actual text of the extended service contract for an EV, but EVs generally have some form of manufacturer time based warranty on the initial batteries to cover defect induced failures just like ICE vehicles have powertrain warranties over and above the OEM "bumper to bumper" warranty.

[Brian Tymchak]

As others have mentioned, with all the electronics on board these days, repairs costs have grown over the years relatively way more expensive than what just inflation can have account for. Also, I discovered a few years ago while truck shopping that Ford is having more reliability issues in the last many years than most other car companies. The CEO has acknowledged the problem. I would definitely purchase the manufacturers extended warranty.

[dennis thompson]

We bought a new Subaru Ascent a few months ago. The car is loaded with electronics, so I bought five-year extended warranty for the car to give me a total bumper to bumper warranty of eight years in total.
It cost $1650 (with a senior citizen discount) and I hope i never use it, after I bought it the finance person told me the average repair on the car was. $2,000