Extended Warranty on Car

Updated on June 03, 2013
E.T. asks from Albuquerque, NM
13 answers

Hi all -

I just purchased a new car and am wondering what you all think about extended warranties. I've never been a fan, but the dealer gave me a great sales pitch and it's got me thinking. Maybe there's value to it that everyone else knows and I just haven't figured out. So... do you purchase the extended warranty? What about gap protection?

In my particular situation, the gap coverage would be $900. It covers the "gap" between the value of the vehicle and the loan amount if there's an accident and it's totaled. This one seems like a rip off to me. Anyone disagree?

The extended warranty would be $1300. It would extend the warranty on pretty much everything (not the seat belts, brakes, hoses, tubes, rust, etc.). The manufacturer's warranty is 3 years/36,000 miles. This would take it up to 7 years/70,000 miles. I don't drive an enormous amount, so it might really last 7 years, but probably more like 5 or 6. But is it worth it?

I should have mentioned this... it's a Toyota, so a very reliable car. And yes, brand brand new. 65 miles when I drove it off the lot.

What can I do next?

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B..

answers from Dallas on

It's really according to the reliability of the car. In my case I bought a Dodge van and they come with many bells and whistles, which means there are a lot of moving parts. Plus there are many electrical parts these days. They all can break.

I went with the extended warranty and have been glad I did many times. I've had it 4 yrs and I intend to have it 4 more. (one more kid through college moving) its paid for itself and with 3 more yrs of it I ought to make money.

It is important to note that they do negotiate the price of the warranties.
We got a lower price on a longer package and didn't pay taxes on it.
Try to be realistic on how long you plan to keep the car and the estimated mileage over that period of time. We drive about 12,000 miles a yr.

I've never heard of gap protection but I think it's a rip off.

You can also negotiate the upholstery treatments and scratch and dent protection. If you are the kind that won't take it in for these things, don't pay top dollar. We negotiated down to half those costs from $300 to 150. I drive them crazy bringing it in for every little thing but I have a clean van and have gotten my money's worth!

Good luck!

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B.D.

answers from Pittsburgh on

Cars and me do not get along. I am also very particular so if it didn't come with that squeak, noise, _________(insert random problem) I don't want it now.

I started buying extended warranties on all of my vehicles and the warranty companies have paid out more than I paid for the warranty. Today's cars are all computerized so most things need to go back to the dealer to be repaired. With that being said, I would buy a warranty with no deductible. (Nothing adds insult to injury than having to pay a deductible everytime you take it in for service.)

With the last car we purchased I learned that the warranty prices are negotiable. The price they quoted me was more than I felt it should be because I had purchased a different vehicle 4 months earlier. When I balked they tried to tell me it would cost more after tonight... when I still balked they dropped the price another $900!!

So to answer your question...definitely worth it!!

ETA: Honestly I am beginning to wonder what I am doing wrong that everyone else feels they are a rip-off. Well I know from past experience 'buying domestic" was mistake #1. On my old Pontiac van they replaced the head gasket under warranty and I dumped it when the head gasket went a second time (worse than the first time) and it was out of the extended warranty period. But I had multiple claims under that warranty that far exceeded the cost of that warranty.

I also will assume that there are good warranty companies and bad. If the dealership is reputable I would think they would only try to sell you the warranty from a reputable company. Wear and tear items are not included but under a bumper to bumper warranty almost everything else should be.

3 moms found this helpful

J.E.

answers from Minneapolis on

If you're seriously considering GAP and warranty, talk to your regular financial institution and find out how much they charge for these. Dealers mark them up more than financial institutions for the same thing.

1 mom found this helpful

M.A.

answers from Detroit on

It really depends on the make and model of the car, and what the warranty covers. Read over the fine print. I know that the KIA does not honor their 100,000 mile warranty. My coworker had nothing but problems with her KIA and the dealership repairing things not covered under the bumpy to bumpy warranty. She ended up junking a two year old car.

I purchased an extended warranty twice from Ford. THANK GOODNESS I DID!!! Nothing major (knock on wood) but I have had electrical problems, numerous suspension (thanks to MI roads), hoses, pumps, belts, alternator, etc. The warranty paid for itself. I do have an $100 deductible, but it is worth it for over $1,000 in parts and labor.

1 mom found this helpful
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J.F.

answers from Las Vegas on

E.,

Read all the fine print. On the surface, the salespeople make these extended warranties sound great. Often, there are exclusionary clauses that most people don't bother to check. Then, when you go to use the warranty, you're quickly informed that this or that is not covered.

Must you go to the dealer for all tune-ups and maintenance for the warranty to remain valid? What if you're a little late or miss one of your scheduled tune-ups? Does that invalidate the warranty? Does the warranty cover parts and labor?

Read every part; ask questions, and take into consideration your driving habits and past experiences with your vehicles.

For the record, we usually skip extended warranties.

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C.T.

answers from Phoenix on

Depends! Go with your gut as well! We got the extended warranty for our Mazda 5 and have used it 4 times within 20,000 miles of the car, the manufacturers warranty was still valid BUT it was for things the manufacturers warranty didn't cover - tires and rims (mazda 5 has thin sport tires that rims easily get dented).
Find out what else it covers above the manufacturers warranty!
If I got a full size minivan with automatic sliding doors and trunk I would definitely get the extended warranty - that's electrical that I've seen break often!

C.V.

answers from Columbia on

Don't bother.

I sold cars for a few years and quickly learned that those warranties are a total ripoff. And your car insurance should cover the gap....read the fine print on your policy.

If you really want to extend your warranty, I guarantee that you'll get some stuff from the manufacturer in the mail just before your normal warranty is to expire. You'll get another chance.

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M.P.

answers from Portland on

My car is nearly 10 years old and I'm still driving it. It has low mileage and is running really well. I've not had a need for repairs. That's one take on it.

I've had an extended warranty on another car and was glad for it. So has my daughter. I have learned that it's really important to read all of the warranty and know what you're getting. But I wouldn't be able to do that. I have a brother who has been an auto parts manager and knows about such stuff and a cousin who is smart on contracts. I'd have them read it and my cousin would tell me to shop around and compare plans.

Without "experts" in the family I would consider going to a garage. Not the one with whom you're talking about the warranty or one that sells warranties. And ask their opinion on extended warranties.

About the gap coverage. Isn't that covered by your car insurance? I've never heard of a separate policy for that.

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X.X.

answers from Denver on

Generally extended warranties are a lose-lose situation for the buyer. I once worked on an insolvency case for an extended warranty company and got quite a rude awakening about what a scam the coverage can be.

I personally would not buy a warranty that took me up to 70k miles. Why? A) if there is something intrinsically wrong with the car, it's going to pop up well before the original warranty is up. B) With the improved quality of most vehicles today, you are rarely going to have stuff start breaking before 70k miles. And if you did, you'd have to have an awful lot break to cover the cost of $1300 (plus deductibles) compared to banking that money in a savings account or using it to pay off debt and saving a high interest rate from being incurred.

We have 3 vehicles - a '04 Toyota with 130k miles, a '07 Toyota with 200k miles, and a '06 Ford Van with 102K miles on it. Knock on wood, but we've never had a repair issue with any of them. New tire, brakes, oil changes, and windshield wipers, that's it.

C.O.

answers from Washington DC on

E.:

If your seat belts break? Doesn't matter if it's out of warranty or not. Manufacturers must fix.

Normal wear and tear - brakes, tires, etc.

What the deductible?
Do you have EVERYTHING it covers in detail - like AC, heating, etc. I would go over the coverage with a fine tooth comb. Find out WHEN the contract applies to my car....mileage - let's say you buy it today and put 70K on your car in 3 years...your manufacturer warranty will be done...

I've had the extended warranty....my view is jaded. You need to make the call on how you drive and take care of cars. If you pound 'em into the ground - you might consider it.

Good luck!

L.C.

answers from Washington DC on

We have a 1990 Toyota Camry that still runs like the day it was purchased. No extended warranty.
We have an 01 Honda Civic that runs like the day we bought it. We've done some things to it, but never the engine. It has 230k miles on it. No extended warranty.
We have an 02 Honda CRV that is having catalytic converter issues, but it also has 200k+ miles on it. Again, no extended warranty. Our dealer gives us coupons for major repair work as well as oil changes. We are very careful about making sure that the cars get their scheduled maintenance on schedule.
Since you have a Toyota, I'd not get the warranty. But that's just me.
Toyota is very reliable and I figure you'll get many miles and years out of your car without the extra expense of the extended warranty.
YMMV
LBC

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C.C.

answers from Flagstaff on

We've done both ways (with and without the extended warranty), but the extended warranty never covers what really breaks. With our last purchase, we bought the extended warranty and drove the car for a month before deciding we did not want the extended warranty. Most policies have a clause where you can change your mind within so many days and get a full refund. Ours did. You can also opt out within a year or two and still get a partial refund (prorated). So even if you get talked into the extended warranty now, you can change your mind later.

The gap insurance should only be necessary if you take out the full price plus the extended warranty over a long term. Otherwise, Toyotas hold their value well so being upside down on the loan should not be a problem.

Enjoy your new car!

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G.B.

answers from Oklahoma City on

I'd go ahead since it's a new car. Just for the fun of knowing there is so much covered. One or two trips and you've reached your mileage too.

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